ACCOUNTS - Final Accounts preparation

Operating profit

The operating profit is stated after charging:

Registered number: 01380206

PENNY ENGINEERING LIMITED

ANNUAL REPORT AND FINANCIAL STATEMENTS

FOR THE YEAR ENDED 30 JUNE 2026

PENNY ENGINEERING LIMITED

COMPANY INFORMATION

Directors	R G Penny
	T J Penny
	A J Holmes
	D J Ball


Company secretary	A J Holmes


Registered number	01380206


Registered office	Station Road Industrial Estate
	Station Road
	Clowne
	Derbyshire
	S43 4AB


Independent auditors	Shorts
	Chartered Accountants & Statutory Auditor
	2 Ashgate Road
	Chesterfield
	Derbyshire
	S40 4AA


Bankers	Barclays Bank plc

PENNY ENGINEERING LIMITED

CONTENTS

	Page
Strategic Report	1 - 2
Directors' Report	3 - 4
Independent Auditors' Report	5 - 8
Statement of Comprehensive Income	9
Balance Sheet	10 - 11
Statement of Changes in Equity	12
Notes to the Financial Statements	13 - 27

PENNY ENGINEERING LIMITED

STRATEGIC REPORT

FOR THE YEAR ENDED 30 JUNE 2026

Introduction

The Directors present their report and financial statements for the year ended 30th June 2026.

Business review

During 2025 The Company Owners made the decision to transfer 100% of the company share ownership from a family-owned business into an Employee-Owned Trust (EOT). The transaction was completed in November 2025. This pivotal decision was made in order to secure the future of the business and protect it from the potential influences of external shareholders and safeguard the interests of the company’s employees, customers, and suppliers. The sale was made at a significant discount against the company value reflecting The Owner-Directors’ desire to allow the company to retain its financial stability and its ability to continue to invest in its UK manufacturing operation.

The business performed broadly as expected during the year returning a modest profit which was in line with expectations. The UK markets in which the company operates have all been under pressure and have remained flat during the year. We do not expect this to change significantly for 2026-2027. The company is therefore investing in its overseas markets as a result as the UK market alone will not meet the company’s ambitions.

Alongside investment in overseas markets, the company will also launch 3 important new products to the UK market in 2027. These will span the goods-lift, vehicle crane, and forklift truck markets.

Going Concern

Turnover during the past financial year was at an excellent level considering the economic uncertainty. Total sales for the year amounted to £11,107,437 (LY £10,069,188) with export sales at significant levels. Building new links with overseas customers and strengthening old links is a key priority along with the promotion of non-core ranges.

Financial key performance indicators

The Board’s cautious approach and high levels of re-investment in the past have kept the company at the forefront of technology with respected products, efficient systems, and low overheads. The Company has no borrowing requirement. Most components are UK or EU sourced with little reliance on the Far East. The diverse customer base allows marketing resource to be redirected should any one sector suffer a down-turn.

Results

The profit for the Year after taxation amounted to 2026: £397,165 (2025: £492,044)

Page 1

PENNY ENGINEERING LIMITED

STRATEGIC REPORT (CONTINUED)

FOR THE YEAR ENDED 30 JUNE 2026

Other Key Performance Indicators

The Company is committed to conducting its business in an ethically responsible manner and this commitment has been recognised in that the operating and management systems have been certified as meeting the standards required by ISO 45001 (Occupational Health and Safety Management), ISO 14001 (Environmental Management), EN 1090 (Factory Production Control), ISO 9001 (Quality Management) as well as Cyber Essentials and Fit 4 Nuclear. The topic of corporate, social, and environmental governance continues to be greatly important to the business and during the last financial year the board and senior leadership team’s focus is to ensure sustainability, support for our local community and protection of the environment.

Financial Risk Management Objectives

The company's operations expose it to a variety of financial risks that include the effects of credit risk and exchange rate risk. The company monitors and acts in each of these areas as follows:

Credit Risk

The company has implemented policies that require appropriate credit checks on potential customers before sales are made, in addition, credit checks are made on those customers who are deemed to be a significant credit risk to the company. The company also monitors all court judgements made against its customers and makes appropriate adjustments in the light of this information.

Exchange Rate Risk

The company monitors its exposures in the foreign currencies in which it regularly transacts in order to protect against excessive fluctuations.

Key performance Indicators

The directors use a number KPls in measuring the performance of the business, as follows:

• Trends in Turnover year on year
• Profit before tax as a percentage of turnover.
• Return on capital employed.
• Trends in cashflow
• Debtor Days and Creditor Days
• Trends in output by product.
• Health and safety statistics.
• Net promoter score and Trust pilot reviews.
• Monitoring of energy consumption.

This report was approved by the board on 3 November 2026 and signed on its behalf.

T J Penny

Director

Page 2

PENNY ENGINEERING LIMITED

DIRECTORS' REPORT

FOR THE YEAR ENDED 30 JUNE 2026

The directors present their report and the financial statements for the year ended 30 June 2026.

Directors' responsibilities statement

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

Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice), including Financial Reporting Standard 102 ‘The Financial Reporting Standard applicable in the UK and Republic of Ireland'. Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the Company and of the profit or loss of the Company for that period.

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

∙select suitable accounting policies for the Company's financial statements and then apply them consistently;

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

∙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 to 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.

Results and dividends

The profit for the year, after taxation, amounted to £397,165 (2025 - £492,044).

Directors

The directors who served during the year were:

R G Penny

T J Penny

A J Holmes

D J Ball

Qualifying third-party indemnity provisions

The directors have been granted a qualifying third party indemnity provision under Section 234 of the Companies Act 2006. This indemnity does not provide cover in the event of a director acting fraudulently or dishonestly.

Page 3

PENNY ENGINEERING LIMITED

DIRECTORS' REPORT (CONTINUED)

FOR THE YEAR ENDED 30 JUNE 2026

Disclosure of information to auditors

Each of the persons who are directors at the time when this Directors' Report is approved has confirmed that:

∙so far as the director is aware, there is no relevant audit information of which the Company's auditors are unaware, and

∙the director has taken all the steps that ought to have been taken as a director in order to be aware of any relevant audit information and to establish that the Company's auditors are aware of that information.

Auditors

The auditors, Shorts, will be proposed for reappointment in accordance with section 485 of the Companies Act 2006.

This report was approved by the board on 3 November 2026 and signed on its behalf.

T J Penny

Director

Page 4

PENNY ENGINEERING LIMITED

INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF PENNY ENGINEERING LIMITED

Opinion

We have audited the financial statements of Penny Engineering Limited (the 'Company') for the year ended 30 June 2026, which comprise the Statement of Comprehensive Income, the Balance Sheet, the Statement of Changes in Equity and the related notes, including a summary of significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 ‘The Financial Reporting Standard applicable in the UK and Republic of Ireland' (United Kingdom Generally Accepted Accounting Practice).

In our opinion the financial statements:

∙give a true and fair view of the state of the Company's affairs as at 30 June 2026 and of its profit for the year then ended;

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

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

Basis for opinion

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

Conclusions relating to going concern

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

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

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

Page 5

PENNY ENGINEERING LIMITED

INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF PENNY ENGINEERING LIMITED (CONTINUED)

Other information

The other information comprises the information included in the Annual Report other than the financial statements and our Auditors' 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.

Opinion on other matters prescribed by the Companies Act 2006

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

∙the information given in the Strategic Report and the 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.

Matters on which we are required to report by exception

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

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

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

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

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

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

Responsibilities of directors

As explained more fully in the Directors' Responsibilities Statement set out on page 3, 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.

Page 6

PENNY ENGINEERING LIMITED

INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF PENNY ENGINEERING LIMITED (CONTINUED)

Auditors' responsibilities for the audit of the financial statements

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an Auditors' 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.

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:

∙the engagement team collectively had the appropriate competence, capabilities and skills to identify or

∙recognise non-compliance with applicable laws and regulations;

∙through discussions with the directors and other management and from our commercial knowledge and experience of the clients business, we identified the laws and regulations applicable to the Company; and

∙focusing on the specific laws and regulations which we considered may have a direct material effect on the financial statements or the operations of the Company, we assessed the extent of compliance with those laws and regulations identified above through making enquiries of management and inspecting relevant correspondence.

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; and

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

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

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

∙reviewed journal entries to identify unusual transactions;

∙assessed whether judgements and assumptions made in determining the accounting estimates were indicative of potential bias; and

∙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;

∙reading the minutes of meetings of those charged with governance;

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

∙reviewing and correspondence with HMRC, relevant regulators and the Company’s legal advisors.

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

Page 7

PENNY ENGINEERING LIMITED

INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF PENNY ENGINEERING LIMITED (CONTINUED)

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.

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

Howard Freeman (Senior Statutory Auditor)

for and on behalf of

Shorts

Chartered Accountants

Statutory Auditor

2 Ashgate Road

Chesterfield

Derbyshire

S40 4AA

3 November 2026

Page 8

PENNY ENGINEERING LIMITED

STATEMENT OF COMPREHENSIVE INCOME

FOR THE YEAR ENDED 30 JUNE 2026

	2026	2025
Note	£	£


Turnover	4	11,107,437	10,069,188
Cost of sales		(5,917,809)	(5,275,602)
Gross profit		5,189,628	4,793,586
Administrative expenses		(4,930,461)	(4,319,602)
Other operating income	5	222,307	131,497
Operating profit	6	481,474	605,481
Interest receivable and similar income		57,243	76,545
Interest payable and similar expenses		(619)	-
Profit before tax		538,098	682,026
Tax on profit	10	(140,933)	(189,982)
Profit for the financial year		397,165	492,044

The notes on pages 13 to 27 form part of these financial statements.

Page 9

PENNY ENGINEERING LIMITED

REGISTERED NUMBER: 01380206

BALANCE SHEET

AS AT 30 JUNE 2026

		2026		2025
Note		£		£

Fixed assets
Tangible assets	11		3,449,583		3,522,586
Investments	12		108		108
			3,449,691		3,522,694
Current assets
Stocks	13	2,107,735		2,188,780
Debtors: amounts falling due within one year	14	1,478,116		1,418,878
Cash at bank and in hand		2,747,059		2,803,415
		6,332,910		6,411,073
Creditors: amounts falling due within one year	15	(2,248,785)		(2,191,217)
Net current assets			4,084,125		4,219,856
Total assets less current liabilities			7,533,816		7,742,550
Creditors: amounts falling due after more than one year	16		(33,984)		-
Provisions for liabilities
Deferred tax	17	(323,187)		(257,070)
			(323,187)		(257,070)
Net assets			7,176,645		7,485,480

Capital and reserves
Called up share capital	18	1,494	1,494
Share premium account	19	9,994	9,994
Capital redemption reserve	19	512	512
Profit and loss account	19	7,164,645	7,473,480
		7,176,645	7,485,480

The financial statements were approved and authorised for issue by the board and were signed on its behalf on 3 November 2026.

T J Penny	A J Holmes
Director	Director

The notes on pages 13 to 27 form part of these financial statements.

Page 10

PENNY ENGINEERING LIMITED

REGISTERED NUMBER: 01380206

BALANCE SHEET (CONTINUED)

AS AT 30 JUNE 2026

Page 11

PENNY ENGINEERING LIMITED

STATEMENT OF CHANGES IN EQUITY

FOR THE YEAR ENDED 30 JUNE 2026

	Called up share capital	Share premium account	Capital redemption reserve	Profit and loss account	Total equity
	£	£	£	£	£
At 1 July 2024	1,494	9,994	512	7,355,696	7,367,696
Comprehensive income for the year
Profit for the year	-	-	-	492,044	492,044
Total comprehensive income for the year	-	-	-	492,044	492,044
Contributions by and distributions to owners
Dividends: Equity capital	-	-	-	(374,260)	(374,260)
Total transactions with owners	-	-	-	(374,260)	(374,260)

At 1 July 2025	1,494	9,994	512	7,473,480	7,485,480
Comprehensive income for the year
Profit for the year	-	-	-	397,165	397,165
Total comprehensive income for the year	-	-	-	397,165	397,165
Contributions by and distributions to owners
Contribution to EOT	-	-	-	(706,000)	(706,000)
Total transactions with owners	-	-	-	(706,000)	(706,000)
At 30 June 2026	1,494	9,994	512	7,164,645	7,176,645

The notes on pages 13 to 27 form part of these financial statements.

Page 12

PENNY ENGINEERING LIMITED

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 30 JUNE 2026

1.	General information

Penny Engineering Limited is a private company limited by shares, incorporated in England and Wales (registered number: 01380206). Its registered office is Station Road, Clowne, Chesterfield, Derbyshire, S43 4AB. The principal activity of the Company continued to be that of design, manufacture, installation and service of bespoke lifting equipment. Products include vehicle mounted cranes, goods lifts, winch systems for chandeliers, multi-directional fork-lift trucks and equipment for the nuclear decommissioning industry.

2.Accounting policies

2.1

Basis of preparation of financial statements

The financial statements have been prepared under the historical cost convention unless otherwise specified within these accounting policies and in accordance with Financial Reporting Standard 102, the Financial Reporting Standard applicable in the UK and the Republic of Ireland and the Companies Act 2006.

The preparation of financial statements in compliance with FRS 102 requires the use of certain critical accounting estimates. It also requires management to exercise judgement in applying the Company's accounting policies (see note 3).

The following principal accounting policies have been applied:

2.2

Foreign currency translation

Functional and presentation currency

The Company's functional and presentational currency is GBP.

Transactions and balances

Foreign currency transactions are translated into the functional currency using the spot exchange rates at the dates of the transactions.

At each period end foreign currency monetary items are translated using the closing rate. Non-monetary items measured at historical cost are translated using the exchange rate at the date of the transaction and non-monetary items measured at fair value are measured using the exchange rate when fair value was determined.

Page 13

PENNY ENGINEERING LIMITED

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 30 JUNE 2026

2.Accounting policies (continued)

2.3

Revenue

Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Company and the revenue can be reliably measured. Revenue is measured as the fair value of the consideration received or receivable, excluding discounts, rebates, value added tax and other sales taxes. The following criteria must also be met before revenue is recognised:

Sale of goods

Revenue from the sale of goods is recognised when all of the following conditions are satisfied:

∙the Company has transferred the significant risks and rewards of ownership to the buyer;

∙the Company retains neither continuing managerial involvement to the degree usually associated with ownership nor effective control over the goods sold;

∙the amount of revenue can be measured reliably;

∙it is probable that the Company will receive the consideration due under the transaction; and

∙the costs incurred or to be incurred in respect of the transaction can be measured reliably.

2.4

Operating leases: the Company as lessee

Rentals paid under operating leases are charged to profit or loss on a straight-line basis over the lease term.

2.5

Grant income

Grants are accounted for under the performance model as permitted by FRS 102. Grants that do not impose specified future performance related conditions on the recipient are recognised in income when the grant proceeds are received. Grants that impose specified future performance related conditions on the recipient are recognised in income only when the performance related conditions are met.

2.6

Pensions

Defined contribution pension plan

The Company operates a defined contribution plan for its employees. A defined contribution plan is a pension plan under which the Company pays fixed contributions into a separate entity. Once the contributions have been paid the Company has no further payment obligations.

The contributions are recognised as an expense in profit or loss when they fall due. Amounts not paid are shown in accruals as a liability in the Balance Sheet. The assets of the plan are held separately from the Company in independently administered funds.

Page 14

PENNY ENGINEERING LIMITED

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 30 JUNE 2026

2.Accounting policies (continued)

2.7

Current and deferred taxation

The tax expense for the year comprises current and deferred tax. Tax is recognised in profit or loss except that a charge attributable to an item of income and expense recognised as other comprehensive income or to an item recognised directly in equity is also recognised in other comprehensive income or directly in equity respectively.

The current income tax charge is calculated on the basis of tax rates and laws that have been enacted or substantively enacted by the balance sheet date in the countries where the Company operates and generates income.

Deferred tax balances are recognised in respect of all timing differences that have originated but not reversed by the balance sheet date, except that:

∙The recognition of deferred tax assets is limited to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits; and

∙Any deferred tax balances are reversed if and when all conditions for retaining associated tax allowances have been met.

Deferred tax balances are not recognised in respect of permanent differences except in respect of business combinations, when deferred tax is recognised on the differences between the fair values of assets acquired and the future tax deductions available for them and the differences between the fair values of liabilities acquired and the amount that will be assessed for tax. Deferred tax is determined using tax rates and laws that have been enacted or substantively enacted by the balance sheet date.

2.8

Tangible fixed assets

Tangible fixed assets under the cost model are stated at historical cost less accumulated depreciation and any accumulated impairment losses. Historical cost includes expenditure that is directly attributable to bringing the asset to the location and condition necessary for it to be capable of operating in the manner intended by management.

Depreciation is charged so as to allocate the cost of assets less their residual value over their estimated useful lives, as follows:

The depreciation rates used are

Freehold property	-	4%	straight line
Plant and machinery	-	15%	straight line
Motor vehicles	-	25%	straight line
Office equipment	-	25%	straight line
Computer equipment	-	25%	straight line

The assets' residual values, useful lives and depreciation methods are reviewed, and adjusted prospectively if appropriate, or if there is an indication of a significant change since the last reporting date.

Gains and losses on disposals are determined by comparing the proceeds with the carrying amount and are recognised in profit or loss.

Page 15

PENNY ENGINEERING LIMITED

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 30 JUNE 2026

2.Accounting policies (continued)

2.9

Valuation of investments

Investments in subsidiaries are measured at cost less accumulated impairment.

2.10

Stocks

Stocks are stated at the lower of cost and net realisable value, being the estimated selling price less costs to complete and sell. Cost is based on the cost of purchase on a first in, first out basis. Work in progress and finished goods include labour and attributable overheads.

At each balance sheet date, stocks are assessed for impairment. If stock is impaired, the carrying amount is reduced to its selling price less costs to complete and sell. The impairment loss is recognised immediately in profit or loss.

2.11

Financial instruments

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

Debt instruments (other than those wholly repayable or receivable within one year), including loans and other accounts receivable and payable, are initially measured at present value of the future cash flows and subsequently at amortised cost using the effective interest method. Debt instruments that are payable or receivable within one year, typically trade debtors and creditors, are measured, initially and subsequently, at the undiscounted amount of the cash or other consideration expected to be paid or received. However, if the arrangements of a short-term instrument constitute a financing transaction, like the payment of a trade debt deferred beyond normal business terms or in case of an out-right short-term loan that is not at market rate, the financial asset or liability is measured, initially at the present value of future cash flows discounted at a market rate of interest for a similar debt instrument and subsequently at amortised cost, unless it qualifies as a loan from a director in the case of a small company, or a public benefit entity concessionary loan.

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

Page 16

PENNY ENGINEERING LIMITED

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 30 JUNE 2026

3.	Judgements in applying accounting policies and key sources of estimation uncertainty

No significant judgements have had to be made by management in preparing these financial statements.

The company makes estimates and assumptions concerning the future. The resulting accounting estimates will, by definition, seldom equal the related actual results. The estimates and assumptions that have the greatest level of uncertainty are addressed below:

(i) Stock provisioning

When calculating the stock provision, management considers the nature and condition of the inventory, as well as applying assumptions around anticipated saleability of stock. The carrying value of stock after making such a provision was £2,107,735 (2025: £2,188,780).

(ii) Impairment of debtors

The company makes an estimate of the recoverable value of trade and other debtors. When assessing impairment of trade and other debtors, management considers factors including the current credit rating of the debtor, the ageing profile of debtors and historical experience. The amount of trade debtors after making such provision was £1,227,511 (2025: £1,265,798).

(iii) Warranty provision

Based upon previous experience and the particular profile of the sales at the time the company has made an estimate in respect of a warranty provision of £137,420 (2025: £100,867).

Turnover

An analysis of turnover by class of business is as follows:
	2026	2025
	£	£

	Sales	11,107,437	10,069,188

Analysis of turnover by country of destination:

					2026	2025
					£	£

United Kingdom	10,039,187	8,979,803
Rest of Europe	841,855	930,141
Rest of the world	226,395	159,244
	11,107,437	10,069,188

Page 17

PENNY ENGINEERING LIMITED

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 30 JUNE 2026

5.	Other operating income
		2026	2025
		£	£

Other operating income	84,159	32,651
Net rents receivable	56,068	56,441
Amortisation of government grant	55,538	3,000
Research & Development Expenditure Credit	26,542	39,405
	222,307	131,497

Depreciation of tangible fixed assets	390,926	333,058
Pension costs	262,048	247,810
Other operating lease rentals - Other	37,568	37,489
Other operating lease rentals - Land and buildings	115,000	115,000
(Profit) / Loss on disposal of fixed assets	(908)	10,435

Fees payable to the Company's auditors for the audit of the Company's financial statements

20,600

19,650

Page 18

PENNY ENGINEERING LIMITED

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 30 JUNE 2026

Wages and salaries	3,632,815	3,186,385
Social security costs	453,393	333,625
Cost of defined contribution scheme	262,048	247,810
	4,348,256	3,767,820

The average monthly number of employees, including the directors, during the year was as follows:

	2026	2025
	No.	No.

Production	55	57
Management & administration	28	30
Selling & distribution	4	4

	87	91

9.	Directors' remuneration
		2026	2025
		£	£

Directors' emoluments	544,493	234,391
Company contributions to defined contribution pension schemes	56,000	36,849
	600,493	271,240

	During the year retirement benefits were accruing to 1 director (2025 - 1) in respect of defined contribution pension schemes.
	The highest paid director received remuneration of £237,176 (2025 - £82,559).
	The value of the Company's contributions paid to a defined contribution pension scheme in respect of the highest paid director amounted to £NIL (2025 - £36,849).

Page 19

PENNY ENGINEERING LIMITED

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 30 JUNE 2026

Corporation tax
Current tax on profits for the year	156,748	232,435
Adjustments in respect of previous periods	(81,932)	-

Total current tax	74,816	232,435

Deferred tax
Origination and reversal of timing differences	66,117	(42,453)
Total deferred tax	66,117	(42,453)


	Tax on profit	140,933	189,982

Page 20

PENNY ENGINEERING LIMITED

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 30 JUNE 2026

10.Taxation (continued)

Profit on ordinary activities before tax

538,097

682,025

Profit on ordinary activities multiplied by standard rate of corporation tax in the UK of 25% (2025 - 25%)	134,524	170,506
Effects of:
Expenses not deductible for tax purposes, other than goodwill amortisation and impairment	25,504	19,476
Adjustments to tax charge in respect of prior periods	(81,932)	-
Adjustments to tax charge in respect of previous periods - deferred tax	62,837	-
Total tax charge for the year	140,933	189,982

Factors that may affect future tax charges

There were no factors that may affect future tax charges.

Page 21

PENNY ENGINEERING LIMITED

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 30 JUNE 2026

11.	Tangible fixed assets

	Freehold property	Plant and machinery	Motor vehicles	Computer equipment	Total
	£	£	£	£	£
Cost or valuation
At 1 July 2025	3,498,324	853,028	770,177	227,472	5,349,001
Additions	73,910	114,250	43,373	86,390	317,923
Disposals	-	-	(39,328)	(12,380)	(51,708)
At 30 June 2026	3,572,234	967,278	774,222	301,482	5,615,216
Depreciation
At 1 July 2025	594,933	612,448	420,717	198,317	1,826,415
Charge for the year on owned assets	147,194	67,365	158,210	15,325	388,094
Charge for the year on financed assets	-	-	-	2,832	2,832
Disposals	-	-	(39,328)	(12,380)	(51,708)
At 30 June 2026	742,127	679,813	539,599	204,094	2,165,633
Net book value
At 30 June 2026	2,830,107	287,465	234,623	97,388	3,449,583
At 30 June 2025	2,903,391	240,580	349,460	29,155	3,522,586

The net book value of assets held under finance leases or hire purchase contracts, included above, are as follows:
	2026	2025
	£	£


	Computer equipment	42,480	-

Page 22

PENNY ENGINEERING LIMITED

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 30 JUNE 2026

12.	Fixed asset investments

		Investments in subsidiary companies
		£
	Cost or valuation
	At 1 July 2025	2,230,557
	At 30 June 2026	2,230,557
	Impairment
	At 1 July 2025	2,230,449
	At 30 June 2026	2,230,449
	Net book value
	At 30 June 2026	108
	At 30 June 2025	108

Subsidiary undertakings
The following were subsidiary undertakings of the Company:
Name	Class of shares	Holding

R & L Systems Limited	Ordinary	100%
Penny Lifting Limited	Ordinary	100%
Penny Nuclear Limited	Ordinary	100%
Raising & Lowering Systems Limited	Ordinary	100%
Penny Cranes Limited	Ordinary	100%
Penny Lifts Limited	Ordinary	100%
Penny Engineering Group Limited	Ordinary	100%
Penny Hydraulics Limited	Ordinary	100%
Sidetracker Engineering Limited	Ordinary	100%

The registered office for all of the above subsidiary undertakings is Penny Engineering Limited, Station Road Industrial Estate, Station Road, Clowne, S43 4AB.

Page 23

PENNY ENGINEERING LIMITED

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 30 JUNE 2026

Subsidiary undertakings (continued)

The aggregate of the share capital and reserves as at 30 June 2026 and the profit or loss for the year ended on that date for the subsidiary undertakings were as follows:
Name	Aggregate of share capital and reserves	Profit/(Loss)
	£	£

R & L Systems Limited	1	-
Penny Lifting Limited	1	-
Penny Nuclear Limited	100	-
Raising & Lowering Systems Limited	1	-
Penny Cranes Limited	1	-
Penny Lifts Limited	1	-
Penny Engineering Group Limited	1	-
Penny Hydraulics Limited	1	-
Sidetracker Engineering Limited	1	-

13.	Stocks
		2026	2025
		£	£

	Finished goods and goods for resale	2,107,735	2,188,780

14.

Debtors

					2026	2025
					£	£


Trade debtors	1,227,511	1,265,798
Other debtors	250,605	153,080
	1,478,116	1,418,878

Page 24

PENNY ENGINEERING LIMITED

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 30 JUNE 2026

15.	Creditors: Amounts falling due within one year
		2026	2025
		£	£

Trade creditors	860,211	746,112
Corporation tax	130,206	193,030
Other taxation and social security	337,519	356,816
Obligations under finance lease and hire purchase contracts	9,062	-
Other creditors	160,355	122,292
Accruals and deferred income	751,432	772,967
	2,248,785	2,191,217

16.	Creditors: Amounts falling due after more than one year
		2026	2025
		£	£

	Net obligations under finance leases and hire purchase contracts	33,984	-

Obligations under finance lease and hire purchase contracts due within and after more than one year are secured on the underlying assets.

17.	Deferred taxation

		2026
		£

	At beginning of year	257,070
	Charged to profit or loss	66,117
	At end of year	323,187

The provision for deferred taxation is made up as follows:
	2026	2025
	£	£

Accelerated capital allowances	329,986	263,873
Movement in provisions	(6,799)	(6,803)
	323,187	257,070

Page 25

PENNY ENGINEERING LIMITED

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 30 JUNE 2026

18.	Share capital
		2026	2025
		£	£

Allotted, called up and fully paid

1,494 (2025 - 249) Ordinary shares of £1.00 each	1,494	249
0 (2025 - 6) A Ordinary shares of £1.00 each	-	6
0 (2025 - 249) B Ordinary shares of £1.00 each	-	249
0 (2025 - 496) C Ordinary shares of £1.00 each	-	496
0 (2025 - 492) D Ordinary shares of £1.00 each	-	492
0 (2025 - 1) E Ordinary shares of £1.00 each	-	1
0 (2025 - 1) F Ordinary shares of £1.00 each	-	1

	1,494	1,494

19.

Reserves

Share premium account

Share premium reserve represents the amount above the nominal value received for shares sold, less transaction costs.

Capital redemption reserve

The capital redemption reserve represents the amount of money the company must retain within reserves when it buys back company shares and this is a non distributable reserve.

Profit and loss account

Profit and loss account represents all current and prior period retained profits and losses and is all considered to be distributable.

20.	Pension commitments

The company operates a defined contributions pension scheme. The assets of the scheme are held separately from those of the company in an independently administered fund. The pension cost charge represents contributions payable by the company to the fund and amounted to £262,048 (2025: £247,810).

Page 26

PENNY ENGINEERING LIMITED

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 30 JUNE 2026

Not later than 1 year	154,799	158,918
Later than 1 year and not later than 5 years	216,235	355,061
	371,034	513,979

22.

Related party transactions

On 20 November 2025 the entire share capital of the company was acquired by the Penny Engineering Employee Ownership Trust ("the Trust"). The Trust holds shares for the future benefit of Penny Engineering Limited. The shares are held by Penny Engineering EOT Limited in its capacity as corporate trustee of the Trust. The funding tor the transaction (and associated costs) was partially achieved through an initial contribution by the company. The balance of the consideration was funded by the previous owners of the busincss. The loans due to the previous owners of the business are an obligation of the Trust, and so the liability for future payments has not been recognised by the company. During the year company made contributions of £706,000 to the Trust.

The company does not control the Trust and so consolidated accounts have not been prepared,

23.	Controlling party

On 20 November 2025 the Penny Engineering Employee Ownership Trust became the beneficial owner of the issued share capital of the company. The shares are held by Penny Engineering EOT LImited in its capacity as corporate trustee of the Trust.

Page 27