REGISTERED NUMBER: 01814713 (England and Wales)

STRATEGIC REPORT, REPORT OF THE DIRECTORS AND

FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 APRIL 2025

FOR

FIRST NATURAL BRANDS LTD

Page

Strategic Report

1

Report of the Directors

3

Report of the Independent Auditors

4

Statement of Comprehensive Income

6

Balance Sheet

7

Statement of Changes in Equity

8

Notes to the Financial Statements

9

The directors present their strategic report for the year ended 30 April 2025.

REVIEW OF BUSINESS

During the year, net sales have decreased by 17.6% to £6.3 million (2024: £7.6 million) following the material impacts of the cost of living crisis. The company does not expect a return to stability until April 2027 as the global macroeconomic position remains uncertain.

The company's main customers remain high-quality UK retailers including Holland & Barrett, Boots, Waitrose and Amazon. The company sells products under its own Tisserand brand and also undertakes contract manufacturing work for selected retailers.

The company operates in the natural health and wellbeing market and remains one of the leading operators in the essential oil market. The company blends, bottles and undertakes product development work to provide natural wellbeing solutions for everyday problems such as sleep and stress. During the year, the company bottled over 3 million products and retains capacity to bottle over 10 million units.

During the year, the company exited product areas with externally made product in the home care sectors and exited low gross margin volume business in the US and UK. Performance at other customers remained broadly flat despite the material turbulent external events impacting high street stores and consumers moving to lower priced and lower margin private label brands.

The company was materially impacted during the year by one of its customers destocking without any communication leading to significant loss in the period as well as a cash flow squeeze. The Directors counteracted this with significant shareholder support and a cost reduction strategy to reduce overheads by over £1m over the long term as well as exiting over £1million of low margin, high working capital business with this customer.

Distribution and logistics costs were negatively impacted with transport costs increasing materially through the year and a fixed logistics cost which was under-utilised against the demand, as well as material excess storage charges, as commitments were forced onto the company ahead of the demand.

Overhead investment continues as the company operates under multiple globally accredited quality standards including ISO 9001, ISO 22716 and ISO 14001. The company believes achievement of these accreditations will support its position as a key supplier to UK retailers.

EBITDA has reduced to a loss of £0.26 million (2024: loss £0.34 million restated) with EBITDA margins similarly reducing to -4.2% (2024: -4.4% restated).

Key Performance indicators

KPIs

2025

2024

As restated

£

£

Sales

6,269,086

7,607,197

Cost of sales

(3,801,526

)

(5,305,792

)

Gross margin

2,467,560

2,301,405

GP%

39.4%

30.2%

Operating (loss)/profit

(571,206

)

(735,264

)

Add back: Share based payments

-

-

Add back: Depreciation

93,197

103,232

Add back: Amortisation

215,014

296,002

Add back: Exceptional costs

-

-

Less: Exceptional income

-

-

EBITDA

(262,995

)

(336,030

)

EBITDA Margin

(4.2%

)

(4.4%

)

PRINCIPAL RISKS AND UNCERTAINTIES

The company is exposed to the following principal risks and uncertainties:

Market and economic uncertainties

The company's trade can be impacted by periods of economic uncertainty over an extended period of time and their impact may be unknown. Factors beyond the company's control, including geopolitical issues would impact the company and a significant deterioration in the general economic climate may further adversely affect the company's performance. The company manages these risks in numerous ways: review of supply chains; presence in different distribution channels, especially online sales; and highly responsive teams, all contribute to its ability to face economic uncertainties.

Financial instruments

The company has bank loans and invoice discounting facilities which expose it to loss from changes in prevailing interest rates, increasing debt service costs and further straining cash flow.

Credit risk

The company is vulnerable to customer non-payment or late payment on goods sold on trade credit terms, which is exacerbated by concentration risk so that one customer's insolvency or extended payment delay could materially damage cash flow. This is mitigated by factoring receivables, tightening payment terms for weaker accounts, and monitoring customer concentration limits.

FUTURE DEVELOPMENTS

Following the end of the financial year the company has renewed its banking facilities and has extended the maturity of its principal loan to November 2027.

ON BEHALF OF THE BOARD:

R C Russell - Director

4 November 2026

The directors present their report with the financial statements of the company for the year ended 30 April 2025.

DIVIDENDS

No dividends will be distributed for the year ended 30 April 2025.

DIRECTORS

The directors shown below have held office during the whole of the period from 1 May 2024 to the date of this report.

R C Russell

S Shah

QUALIFYING THIRD PARTY INDEMNITY PROVISIONS

The directors benefit from a qualifying indemnity provision in the form permitted by section 234 of the Companies Act 2006 in respect of certain third party actions against the directors. No claim or notice of claim in respect of these indemnities has been received in the year. The qualifying indemnity provision was in force throughout the financial year and up to the date of approval of the Directors' Report.

RESEARCH AND DEVELOPMENT

Expenditure on research activities is recognised as an expense in the period in which it is incurred. In accordance with FRS 102, section 18 'Intangible Assets other than Goodwill', internally generated intangible assets will be capitalised: (i) where an asset has entered the development phase and the expected future expected economic benefits are attributable to the asset; (ii) it is probable that the future economic benefits of the asset will flow to the group; and (iii) the costs of the asset can be measured reliably. internally generated intangible assets are amortised on a straight-line basis over the useful lives of between one and five years in line with the expected product cycle of each product. Where no internally generated intangible assets can be recognised, development expenditure is recognised as an expense in the period in which it incurred. The development expense incurred during the year was £Nill (2024: £Nil).

DIRECTORS' RESPONSIBILITIES STATEMENT

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

Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). 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;

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

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

STATEMENT AS TO DISCLOSURE OF INFORMATION TO AUDITORS

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

ON BEHALF OF THE BOARD:

R C Russell - Director

4 November 2026

Opinion

We have audited the financial statements of First Natural Brands Ltd (the 'company') for the year ended 30 April 2025 which comprise the Statement of Comprehensive Income, Balance Sheet, Statement of Changes in Equity and Notes to the Financial Statements, including a summary of significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland' (United Kingdom Generally Accepted Accounting Practice).

In our opinion the financial statements:

-	give a true and fair view of the state of the company's affairs as at 30 April 2025 and of its loss for the year then ended;

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

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

Basis for opinion

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

Material uncertainty related to going concern

We draw attention to the Going Concern paragraph in Note 2 of the financial statements, which states that the company is reliant on the continued support of its bank and has breached its covenants. The bank has extended the maturity of its principal loan to November 2027, without waiving its covenants. Due to the reliance on bank support a material uncertainty exists that may cast significant doubt on whether the company will continue as a going concern for the foreseeable future. Our opinion is not modified in respect of this matter.

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.

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

Other information

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

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

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

Opinions on other matters prescribed by the Companies Act 2006

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

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

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

Matters on which we are required to report by exception

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

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

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

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

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

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

Responsibilities of directors

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

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

Auditors' responsibilities for the audit of the financial statements

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

Based on our understanding of the company and industry, we considered the risk of non-compliance with laws and regulations, and we considered the extent to which non-compliance might have a material effect on the financial statements. We also considered those laws and regulations that have a direct impact on the financial statements such as the Companies Act 2006. We evaluated management’s incentives and opportunities for fraudulent manipulation of the financial statements (including the risk of override of controls). Audit procedures performed included:

-

Enquiring of management whether there were instances of non-compliance with laws and regulation or fraud;

-

Review of legal expenses for evidence of fees relating to non-compliance;

-

Review of accounting records to identify related party transactions;

-

Review of non-routine journal entries, non-sales bank receipts and non-purchase bank payments for unusual accounting entries; and

-

Substantive revenue testing to confirm occurrence of revenue and ensure that it is recognised in the correct period.

There are inherent limitations in the audit procedures described above. We are less likely to become aware of instances of non-compliance with laws and regulations that are not closely related to events and transactions reflected in the financial statements. Also, the risk of not detecting a material misstatement due to fraud is higher than the risk of not detecting one resulting from error, as fraud may involve deliberate concealment by, for example, forgery or intentional misrepresentations, or through 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 Report of the Auditors.

Use of our report

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

Christian Heeger BSc BFP FCA (Senior Statutory Auditor)

for and on behalf of Galloways Accounting

Statutory Auditor

15 West Street

Brighton

East Sussex

BN1 2RL

4 November 2026

TURNOVER

3

6,269,086

7,607,197

Cost of sales

(3,801,526

)

(5,305,792

)

GROSS PROFIT

2,467,560

2,301,405

Distribution costs

-

(13,724

)

Administrative expenses

(3,038,766

)

(3,022,945

)

OPERATING LOSS

5

(571,206

)

(735,264

)

Interest payable and similar expenses

6

(449,797

)

(434,489

)

LOSS BEFORE TAXATION

(1,021,003

)

(1,169,753

)

Tax on loss

7

(299,663

)

150,000

LOSS FOR THE FINANCIAL YEAR

(1,320,666

)

(1,019,753

)

OTHER COMPREHENSIVE INCOME

-

-

TOTAL COMPREHENSIVE INCOME FOR THE YEAR

(1,320,666

)

(1,019,753

)

Prior year adjustment

8

22,606

TOTAL COMPREHENSIVE INCOME SINCE LAST ANNUAL REPORT

(1,298,060

)

FIXED ASSETS

Intangible assets

9

506,769

564,408

Tangible assets

10

272,083

352,889

778,852

917,297

CURRENT ASSETS

Stocks

11

1,303,756

1,683,489

Debtors

12

1,390,414

2,394,404

Cash at bank and in hand

136,986

177,350

2,831,156

4,255,243

CREDITORS

Amounts falling due within one year

13

5,463,282

5,704,320

NET CURRENT LIABILITIES

(2,632,126

)

(1,449,077

)

TOTAL ASSETS LESS CURRENT LIABILITIES

(1,853,274

)

(531,780

)

CREDITORS

Amounts falling due after more than one year

14

-

828

NET LIABILITIES

(1,853,274

)

(532,608

)

CAPITAL AND RESERVES

Called up share capital

18

100,000

100,000

Other reserves

19

13,398

13,398

Retained earnings

19

(1,966,672

)

(646,006

)

SHAREHOLDERS' FUNDS

(1,853,274

)

(532,608

)

The financial statements were approved by the Board of Directors and authorised for issue on 4 November 2026 and were signed on its behalf by:

R C Russell - Director

Called up

share

Retained

Other

Total

capital

earnings

reserves

equity

£

£

£

£

Balance at 1 May 2023

100,000

373,747

13,398

487,145

Changes in equity

Deficit for the year

-

(1,042,359

)

-

(1,042,359

)

Total comprehensive income

-

(1,042,359

)

-

(1,042,359

)

Balance at 30 April 2024

100,000

(668,612

)

13,398

(555,214

)

Prior year adjustment

-

22,606

-

22,606

As restated

100,000

(646,006

)

13,398

(532,608

)

Changes in equity

Deficit for the year

-

(1,320,666

)

-

(1,320,666

)

Total comprehensive income

-

(1,320,666

)

-

(1,320,666

)

Balance at 30 April 2025

100,000

(1,966,672

)

13,398

(1,853,274

)

1.	STATUTORY INFORMATION

First Natural Brands Ltd is a private company, limited by shares , registered in England and Wales. The company's registered number and registered office address are as below:

Registered number:

01814713

Registered office:

Millennium House

Unit 2, King Business Centre

Reeds Lane, Sayers Common

Hassocks

West Sussex

BN6 9LS

The presentation currency of the financial statements is the Pound Sterling (£).

The principal activity of the company was the bottling, marketing and sales of essential oils and personal care products.

2.	ACCOUNTING POLICIES

Basis of preparing the financial statements

These financial statements have been prepared in accordance with Financial Reporting Standard 102 "The Financial Reporting Standard applicable in the UK and Republic of Ireland" and the Companies Act 2006. The financial statements have been prepared under the historical cost convention.

Going concern

These financial statements are prepared on the going concern basis. The directors have a reasonable expectation that the company will continue in operational existence for the foreseeable future. However, the directors are aware of material uncertainties which may cast significant doubt on the company's ability to continue as a going concern, as set out in the following paragraph.

Presently the company is in breach of its renegotiated loan covenants with regards to amounts owing to its bankers, Santander plc, who have continued to support the company through the extension and renewal of its loan facilities to November 2027, though they have not waived the covenants. The company is dependent upon the continuing support of its bankers.

The directors have reviewed the ongoing cash flows of the business without the benefits of the increased consumer marketing and no new customers or new products and the company continues to operate. The directors have therefore formed a judgement that at the time of the approving these financial statements there is a reasonable expectation that the group has sufficient financial resources to operate for the foreseeable future and for at least 12 months from the date of this report. The company had cash balances of £136,986 and undrawn facilities of £121,245 at year end.

The company made a pre-tax loss in the year of £1.0 million. The directors have initiated a cost reduction plan to reduce overheads by over £1m in the next 12 months.

The directors therefore consider it appropriate to prepare the financial statements on a going concern basis.

Financial Reporting Standard 102 - reduced disclosure exemptions

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

•

the requirements of Section 7 Statement of Cash Flows;

•

the requirement of paragraph 3.17(d);

•

the requirements of paragraphs 11.42, 11.44, 11.45, 11.47, 11.48(a)(iii), 11.48(a)(iv), 11.48(b) and 11.48(c);

•

the requirements of paragraphs 12.26, 12.27, 12.29(a), 12.29(b) and 12.29A;

•

the requirements of paragraphs 26.18(b), 26.19 to 26.21 and 26.23;

•

the requirement of paragraph 33.7.

Related party exemption

The company has taken advantage of exemption, under the terms of Financial Reporting Standard 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland', not to disclose related party transactions with wholly owned subsidiaries within the group.

Turnover

Revenue is measured at the fair value of the consideration received or receivable and represents the amount receivable for goods supplied or services rendered, net of returns, discounts and rebates allowed by the group and value added taxes.

i. Sale of goods - wholesale

The company produces and sells a range of essential oils and personal care products in the wholesale market. Sales of goods are recognised on delivery to the wholesaler, when the wholesaler has full discretion over the channel and price to sell the product and there is no unfulfilled obligation that could affect the wholesaler's acceptance of the product. Delivery occurs when the goods have been shipped to the location specified by the wholesaler, the risks of obsolescence or loss have been transferred to the wholesaler, the wholesaler has accepted the products in accordance with the sales contract, the acceptance provisions have lapsed or the company has objective evidence that all criteria for acceptance have been satisfied.

Goods sold to wholesalers are sometimes sold with volume rebates. Sales are measured net of estimated volume rebates and returns.

ii. Sale of goods - internet based transactions

The company sells goods via its website for delivery to the customer. Revenue is recognised when the risks and rewards of the stock is passed to the customer. For deliveries to the customer this is the point of acceptance of the goods by the customer. Transactions are settled by credit or payment card.

Provision is made for credit notes.

Intangible assets

Intangible assets are stated at cost less accumulated amortisation and accumulated impairment losses.

Amortisation is calculated, using the straight-line method, to allocate the depreciable amount of the assets to their residual values over their estimated useful lives, as follows:

Patents & licences

5 years

Development costs

2 - 5 years

Amortisation is included within the Statement of Comprehensive Income under administrative expenses.

Tangible fixed assets

Tangible assets are stated at cost (or deemed cost) less accumulated depreciation and accumulated impairment losses. Cost includes the original purchase price, costs directly attributable to bringing the asset to its working condition for its intended use, dismantling and restoration costs.

Depreciation on tangible assets is calculated, using the straight-line method, to allocate the depreciable amount to their residual values over their estimated useful lives, as follows:

Leasehold improvements

over the lease term

Plant and equipment

7 - 10 years

Fixtures and fittings

5 - 10 years

Computer equipment

5 - 10 years

Stocks

Stocks are stated at the lower of cost and estimated selling price less costs to complete and sell. Stocks are recognised as an expense in the period in which the related revenue is recognised.

Cost is determined on the first-in, first-out (FIFO) method. Cost includes the purchase price, including taxes and duties and transport and handling directly attributable to bringing the stock to its present location and condition.

At the end of each reporting period stocks are assessed for impairment. If an item of stock is impaired, the identified stock is reduced to its selling price less costs to complete and sell and an impairment charge is recognised in the profit and loss account. Where a reversal of the impairment is recognised the impairment charge is reversed, up to the original impairment loss, and is recognised as a credit in the profit and loss account.

Financial instruments

i. Financial assets

Basic financial assets, including trade and other receivables, cash and bank balances and investments in commercial paper,are initially recognised at transaction price, 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.

Such assets are subsequently carried at amortised cost using the effective interest method.

At the end of each reporting period financial assets measured at amortised cost are assessed for objective evidence of impairment. 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.

ii. Financial liabilities

Basic financial liabilities, including trade and other payables, 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 receipts discounted at a market rate of interest.

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

Fees paid on the establishment of loan facilities are recognised as transaction costs of the loan to the extent that it is probable that some or all of the facility will be drawn down.

Taxation

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

Current or deferred taxation assets and liabilities are not discounted.

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

Deferred tax

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

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

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

Research and development

In the research phase of an internal project, it is not possible to demonstrate that the project will generate future economic benefits and, hence, all expenditure on research is recognised as an expense when it is incurred.

Intangible assets are recognised from the development phase of a project if and only if certain specific criteria are met in order to demonstrate the asset will generate probable future economic benefits, and that its cost can be reliably measured. The capitalised development costs are subsequently amortised on a straight line basis over their useful economic lives.

If it is not possible to distinguish between the research phase and the development phase of an internal project, the expenditure is treated as if it were all incurred in the research phase only.

Foreign currencies

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

Hire purchase and leasing commitments

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

Leases of assets that transfer substantially all the risks and rewards incidental to ownership are classified as finance leases.

Finance leases are capitalised at commencement of the lease as assets at the fair value of the leased asset or, if lower, the present value of the minimum lease payments calculated using the interest rate implicit in the lease. Where the implicit rate cannot be determined, the group’s incremental borrowing rate is used.

Assets are depreciated over the shorter of the lease term and the estimated useful life of the asset. Assets are assessed for impairment at each reporting date.

The capital element of lease obligations is recorded as a liability on inception of the arrangement. Lease payments are apportioned between capital repayment and finance charge, using the effective interest rate method, to produce a constant rate of charge on the balance of the capital repayments outstanding.

Pension costs and other post-retirement benefits

The group operates a defined contribution pension scheme. Contributions payable to the group's pension scheme are charged to profit or loss in the period to which they relate.

Share-based payments

The group provides share-based payment arrangements to certain employees.

Equity-settled arrangements are measured at fair value (excluding the effect of non-market based vesting conditions) at the date of the grant. The fair value is expensed on a straight line basis over the vesting period. The amount recognised as an expense is adjusted to reflect the actual number of shares or options that will vest.

Where equity-settled arrangements are modified, and are of benefit to the employee, the incremental fair value is recognised over the period from the date of modification to date of vesting. Where a modification is not beneficial to the employee there is no change to the charge for share-based payment. Settlements and cancellations are treated as an acceleration of vesting and the unvested amount is recognised immediately in the income statement.

3.

TURNOVER

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

An analysis of turnover by geographical market is given below:

2025

2024

as restated

£

£

United Kingdom

5,424,031

6,710,177

Rest of the World

845,055

897,020

6,269,086

7,607,197

Turnover was from the sales of goods in both years.

4.	EMPLOYEES AND DIRECTORS

2025

2024

as restated

£

£

Wages and salaries

1,710,289

1,859,748

Social security costs

168,026

172,585

Other pension costs

58,619

84,247

1,936,934

2,116,580

The average number of employees during the year was as follows:

2025

2024

as restated

Production

26

44

Administration

29

17

55

61

In addition to the above, £100,465 (2024: £101,320) of wages and salaries have been capitalised and are included in intangible asset additions.

2025

2024

as restated

£

£

Directors' remuneration

203,763

220,217

Directors' pension contributions to money purchase schemes

4,915

5,500

The number of directors to whom retirement benefits were accruing was as follows:

Money purchase schemes

1

1

Information regarding the highest paid director is as follows:

2025

2024

as restated

£

£

Emoluments etc

100,507

119,100

5.	OPERATING LOSS

The operating loss is stated after charging:

2025

2024

as restated

£

£

Hire of plant and machinery

12,264

11,225

Other operating leases

155,274

134,753

Depreciation - owned assets

93,197

103,233

Loss on disposal of fixed assets

9,666

1,979

Patents and licences amortisation

114,322

138,695

Development costs amortisation

100,692

157,307

Auditors' remuneration

24,900

14,359

Foreign exchange differences

3,140

7,155

6.

INTEREST PAYABLE AND SIMILAR EXPENSES

2025

2024

as restated

£

£

Bank interest

394,549

401,594

Loan

44,434

25,875

Interest on late taxes

8,563

4,669

Leasing

2,251

2,351

449,797

434,489

7.

TAXATION

Analysis of the tax charge/(credit)

The tax charge/(credit) on the loss for the year was as follows:

2025

2024

as restated

£

£

Deferred tax

299,663

(150,000

)

Tax on loss

299,663

(150,000

)

UK corporation tax has been charged at 25% (2024 - 25%).

Reconciliation of total tax charge/(credit) included in profit and loss

The tax assessed for the year is higher than the standard rate of corporation tax in the UK. The difference is explained below:

2025

2024

as restated

£

£

Loss before tax

(1,021,003

)

(1,169,753

)

Loss multiplied by the standard rate of corporation tax in the UK of 25% (2024 - 25%)

(255,251

)

(292,438

)

Effects of:

Expenses not deductible for tax purposes

1,491

95,067

Adjustments to deferred tax charge in respect of previous periods

299,663

(150,000

)

Unprovided deferred tax

253,760

197,371

Total tax charge/(credit)

299,663

(150,000

)

The company reversed its deferred tax asset during the year due to the uncertainty over generation of taxable profits in the foreseeable future.

8.	PRIOR YEAR ADJUSTMENT

The financial statements include the following prior year adjustments:

Description

Line item affected

Effect on statement of other comprehensive income

Effect on balance sheet

£

£

Gain/(loss

)

Debit/(credit

)

Costs incurred between October 2021 and October 2023 were incorrectly prepaid

Prepayments

(95,783

)

Retained earnings

138,746

Cost of sales

42,964

Bad debts incurred in the prior year had not been recognised

Administrative expenses

(20,357

)

VAT

4,071

Trade debtors

24,429

Misclassification of loans as due after one year

Bank loans due within one year

(2,021,353

)

Other loans due within one year

(155,682

)

Bank loans due after one year

2,021,353

Other loans due after one year

155,682

Misclassification of intangibles

Patents and licences cost

134,959

Patents and licences depreciation

(18,591

)

Development costs cost

(274,787

)

Development cost depreciation

158,419

Total effect on profit and loss

22,607