Ebac Limited 01089991 false 2021-01-01 2021-12-31 2021-12-31 The principal activity of the company is that of the design and manufacture of dehumidifying equipment, water coolers and domestic washing machines. 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Registration number: 01089991

Ebac Limited

Annual Report and Financial Statements

for the Year Ended 31 December 2021

 

Ebac Limited

Contents

Company Information

1

Strategic Report

2 to 3

Directors' Report

4 to 6

Statement of Directors' Responsibilities

7

Independent Auditor's Report

8 to 10

Income Statement

11

Statement of Financial Position

12

Statement of Changes in Equity

13

Notes to the Financial Statements

14 to 33

 

Ebac Limited

Company Information

Directors

J M Elliott MBE

A Hird

Company secretary

A Hird

Registered office

Ketton Way
Aycliffe Industrial Park
Newton Aycliffe
County Durham
DL5 6SR

Auditor

Azets Audit Services
Chartered Accountants & Statutory Auditor
Bulman House
Regent Centre
Gosforth
Newcastle upon Tyne
NE3 3LS

 

Ebac Limited

Strategic Report for the Year Ended 31 December 2021

The directors present their strategic report for the year ended 31 December 2021.

Principal activity

The principal activity of the company is that of the design and manufacture of dehumidifying equipment, water coolers and domestic washing machines.

Fair review of the business

First, I would like to apologise for the delay in filling our accounts. This delay has been caused by a necessary restructuring of the business to tackle the poor results published in this financial report.

This report demonstrates a significant loss for the business. This was due to the long-term effect of the COVID period and supply chain issues that hit many manufacturers at this time. In practical terms it meant that some of the components for our products were difficult to source in global markets, a good example being motors for our washing machines. The medium term effect of this was to create a stock of machines which were incomplete at a time customers wanted to buy them.

The business also spent funds on the development of new products which are due to come to the market in the coming months. In addition, Ebac manufactures a range of office water coolers, which was hit by the work-from-home trend in workplaces, but is now recovering its momentum.

This combination of unsold machines and extra spending on research and development led to losses and necessary remedial action. The action involved cutting costs, both in people and production, restructuring our operation, and re-financing.

Although 2020, 2021 and the first six months of 2022 have been the worst conditions I have experienced in 50 years, I now believe our future is very good and in fact we have investors wanting to invest in the business.

Our own investment in new products is now paying off, leading to opportunities in new markets. These products are designed to support customers that need to heat homes in an efficient and environmentally friendly way. They include our British designed, and soon to be manufactured, heat pumps and a new home ventilation and dehumidifier system which will be of great interest to landlords with stock requiring a solution to damp and condensation issues.

Our new products will be competitively priced yet deliver excellent margins. They will complement the product range of dehumidifiers and building dryers, for which Ebac has created an effective UK market.

Ebac is now more than 50 years old, it has been flexible, innovative and determined to create products that can be made in North East England, providing employment and economic activity in the important manufacturing sector. I am confident that the difficulties of recent years can now be put behind us as we manufacture and sell some brilliant products that will secure our future in the years to come.

The company's key financial and other performance indicators during the year were as follows:

 

Unit

2021

2020

Increase/(decrease) in sales

%

20

(6)

Gross profit margin

%

24

24

EBITDA

£

(1,815,686)

(1,136,749)

 

Ebac Limited

Strategic Report for the Year Ended 31 December 2021 (continued)

Principal risks and uncertainties

Ebac operates in established markets that are unlikely to change significantly.

To maintain the turnover within these markets, regular review of product ranges against the competition will be essential to maintain market share.

Some growth can be achieved in the core markets, but for significant growth the company seeks to move into new geographical markets with its existing ranges and continue to develop new markets with its new products, namely heat pumps and ventilation.

Approved and authorised for issue by the Board on 12 October 2023 and signed on its behalf by:
 

.........................................
J M Elliott MBE
Director

 

Ebac Limited

Directors' Report for the Year Ended 31 December 2021

The directors present their report and the financial statements for the year ended 31 December 2021.

Directors of the company

The directors who held office during the year were as follows:

J M Elliott MBE

G Currie (resigned 20 June 2022)

A Hird - Company secretary and director

Financial instruments

Price risk, credit risk, liquidity risk and cash flow risk

The company has an established, structured approach to risk management. The company's activities expose it to a variety of financial risks, such as interest, credit, liquidity and foreign currency risks. The company has adopted risk management policies that seek to mitigate these risks in a cost effective manner. Financial assets that expose the company to financial risk consist primarily of trade receivables and cash. Financial liabilities that expose the company to financial risk consist principally of trade payables and bank borrowings.

Credit risk is the risk of loss in the value of financial assets due to counterparties failing to meet all or part of their obligations through the extended credit term arrangement. The company, however, undertakes assessments of its customers in order to manage its credit risk.

Liquidity risk is the risk that the company does not have sufficient liquid assets to meet its obligations as they fall due. Liquidity is maintained at a prudent level and the company ensures there is an adequate liquidity buffer to cover contingencies. The risk is mitigated by managing cash generated by operations.

Interest rate risk is managed through the company investing in a floating rate interest yielding bank deposit and during the year had access to a floating rate interest bearing overdraft facility. Term loans are entered into at floating interest rates. The company's interest income and expenses are therefore affected by movements in interest rates. The company does not undertake any hedging activity.

Foreign currency risk arises due to a significant proportion of revenues and costs being denoted in euros and dollars. The company holds a sterling bank account, a euro bank account and a dollar bank account and where possible income and expenses are matched depending on the currency. The company also enters into arrangements to buy and sell foreign currencies for fixed rate returns at fixed future dates.

Future developments

See Strategic Report for details on future developments of the company.

Research and development

The company continues to be committed to the research and development of new products. All such expenditure is written off as incurred.

 

Ebac Limited

Directors' Report for the Year Ended 31 December 2021 (continued)

Going concern

The financial statements have been prepared on a going concern basis. As at 31 December 2021 the company reported net current liabilities of £2,261,283 (excluding non-current debtors) including amounts due to group undertakings of £8,752,136 and net assets of £4,261,599. The company meets its day to day working capital requirements through its cash balances, external financing and intercompany funding and the company has received a letter of support indicating that group undertakings will not seek repayment of the amounts due to them until such time as the company has the funds available to make such repayments.

A cross guarantee exists, in respect of bank debt, between the company and members of the Ebac Holdings Limited Group. As a result the directors assess going concern on a combined group basis.

As at 31 December 2021 the group reported net current assets of £7,643,319 and net assets of £2,859,962. The group meets its day to day working capital requirements through a combination of cash generated from operations, funding from connected parties and external bank and finance provider funding. Subsequent to the year end the group experienced pressure on cash flows which resulted in the group breaching covenants attached to some of its debt facilities. As a result the group has actively sought to refinance and, via a combination of the provision of short term working capital facilities from external parties, loans from directors and the successful acquirement of new invoice discounting facilities of £2.5M and bank debt of £1.5M the group has refinanced on a long term basis. In addition to the refinancing the group has addressed its cost base via a combination of a reduction in head count and also undertaking a significant efficiency drive which has resulted in a significant improvement in trading performance which the directors are forecasting will continue going forward. The order book for the group’s core dehumidifier products has continued to strengthen from a strong base and orders for water coolers remain at good levels. In addition to this the group has recently launched a new heat pump product line which the directors believe represents a significant opportunity for the group going forward and forecasts for this product line look promising. The group is currently in discussion with a number of parties regarding potential additional finance to aid the development and production of the heat pump line and believe that this opportunity will generate significant funds for the group in future years.

As noted above the group has refinanced a large element of its external financing. Post year end the group has also received loans from connected parties currently totalling c£1m which are owed to the individuals personally. The group has received assurances that these individuals remain supportive of the group and the forecasts assume that this will continue to be the case.

The directors have prepared forecasts for the next 12 months and beyond covering a range of scenarios. The group’s traditional product lines, including dehumidifiers and water coolers, are expected to continue to perform strongly and the directors have good visibility of future customer orders for these products. The forecasts include a significant growth in sales, profits and cash flows generated from the heat pump product line and whilst the directors are confident that the group’s heat pump product line will grow significantly, the forward visibility of significant order volume is currently very limited.

Accordingly, the directors have prepared alternative forecasts to show a scenario where there are no heat pump sales for the next 12 months – the directors consider this to be very much a worst case scenario and highly unlikely. However, under this worst case scenario forecast, the group is forecasting to be able to continue to operate under the facilities currently available to it. Although the forecasts were prepared taking into account the matters above and they support the ability of the group to remain a going concern and to be able to trade and meet its debts as they fall due the underlying trading assumptions used in forecasting are best estimates and could be subject to potential variation. However, the directors are confident that these uncertainties do not represent a material uncertainty regarding the group’s ability to continue as a going concern. Based on the factors set out above, the directors believe that it remains appropriate to prepare the financial statements on a going concern basis.

 

Ebac Limited

Directors' Report for the Year Ended 31 December 2021 (continued)

Disclosure of information to the auditor

Each director has taken steps that they ought to have taken as a director in order to make themselves aware of any relevant audit information and to establish that the company's auditors are aware of that information. The directors confirm that there is no relevant information that they know of and of which they know the auditor is unaware.

Reappointment of auditor

Azets Audit Services Limited, trading as Azets Audit Services, were appointed auditor to the company following their acquisition of the trade of Tait Walker LLP, trading as MHA Tait Walker, on 1 May 2022.

The auditors Azets Audit Services are deemed to be reappointed under section 487(2) of the Companies Act 2006.

Approved and authorised for issue by the Board on 12 October 2023 and signed on its behalf by:
 

.........................................
J M Elliott MBE
Director

 

Ebac Limited

Statement of Directors' Responsibilities

The directors acknowledge their responsibilities for preparing the Annual Report and the financial statements in accordance with applicable law and regulations.

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

select suitable accounting policies and 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 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.

 

Ebac Limited

Independent Auditor's Report to the Members of Ebac Limited

Opinion

We have audited the financial statements of Ebac Limited (the 'company') for the year ended 31 December 2021, which comprise the Income Statement, Statement of Financial Position, Statement of Changes in Equity, and Notes to the Financial Statements, including significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice).

In our opinion the financial statements:

give a true and fair view of the state of the company's affairs as at 31 December 2021 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 auditor responsibilities for the audit of the financial statements section of our report. We are independent of the company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC’s Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Conclusions relating to going concern

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

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

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

Other information

The other information comprises the information included in the annual report other than the financial statements and our auditor’s report thereon. The directors are responsible for the other information contained within the annual report. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon.

Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the course of the audit, or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.

We have nothing to report in this regard.

 

Ebac Limited

Independent Auditor's Report to the Members of Ebac Limited (continued)

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 Directors' Report for the financial year for which the financial statements are prepared is consistent with the financial statements; and

the Strategic Report and 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 our 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 and 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 Statement of Directors' Responsibilities (set out on page 7), 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.

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

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:

enquiries of management about any known or suspected instances of non-compliance with laws and regulations and fraud;

challenging assumptions and judgements made by management in their significant accounting estimates; and

 

Ebac Limited

Independent Auditor's Report to the Members of Ebac Limited (continued)

auditing the risk of management override of controls, including through testing journal entries and other adjustments for appropriateness.

Because of the field in which the client operates, we identified the following areas as those most likely to have a material impact on the financial statements: Health and Safety; employment law (including the Working Time Directive) and compliance with the UK Companies Act and tax legislation.

Owing to the inherent limitations of an audit, there is an unavoidable risk that some material misstatements in the financial statements may not be detected, even though the audit is properly planned and performed in accordance with the ISAs (UK). For instance, the further removed non-compliance is from the events and transactions reflected in the financial statements, the less likely the auditor is to become aware of it or to recognise the non-compliance.

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

Use of our report

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

......................................
Christopher Potter BA (Hons) ACA (Senior Statutory Auditor)
For and on behalf of Azets Audit Services
Statutory Auditor
Chartered Accountants
Bulman House
Regent Centre
Gosforth
Newcastle upon Tyne
NE3 3LS

12 October 2023

Azets Audit Services is a trading name of Azets Audit Services Limited.

 

Ebac Limited

Income Statement for the Year Ended 31 December 2021

Note

2021
£

2020
£

Turnover

3

20,132,445

16,794,165

Cost of sales

 

(15,393,848)

(12,683,496)

Gross profit

 

4,738,597

4,110,669

Distribution costs

 

(36,524)

(237,149)

Administrative expenses

 

(7,850,834)

(6,726,497)

Other operating income

4

74,577

467,176

Operating loss

5

(3,074,184)

(2,385,801)

Other interest receivable and similar income

6

214,830

204,600

Interest payable and similar expenses

7

(546,112)

(449,738)

Loss before tax

 

(3,405,466)

(2,630,939)

Taxation

11

157,704

435,075

Loss for the financial year

 

(3,247,762)

(2,195,864)

The above results were derived from continuing operations.

The company has no recognised gains or losses for the year other than the results above.

 

Ebac Limited

(Registration number: 01089991)
Statement of Financial Position as at 31 December 2021

Note

2021
£

2020
£

Fixed assets

 

Tangible assets

13

5,092,558

6,182,745

Investments

14

641,428

641,428

Other financial assets

139,588

-

 

5,873,574

6,824,173

Current assets

 

Stocks

15

7,041,955

5,936,579

Debtors

16

11,020,587

10,764,716

Cash at bank and in hand

 

12,118

165,124

 

18,074,660

16,866,419

Creditors: Amounts falling due within one year

17

(15,742,008)

(11,840,081)

Net current assets

 

2,332,652

5,026,338

Total assets less current liabilities

 

8,206,226

11,850,511

Creditors: Amounts falling due after more than one year

17

(3,616,420)

(4,080,943)

Provisions for liabilities

19

(328,207)

(260,207)

Net assets

 

4,261,599

7,509,361

Capital and reserves

 

Called up share capital

21

100,596

100,596

Share premium reserve

22

115,944

115,944

Revaluation reserve

22

120,157

126,177

Other reserves

22

3,663,834

3,663,834

Profit and loss account

 

261,068

3,502,810

Total equity

 

4,261,599

7,509,361

Approved and authorised for issue by the Board on 12 October 2023 and signed on its behalf by:
 

.........................................
J M Elliott MBE
Director

 

Ebac Limited

Statement of Changes in Equity for the Year Ended 31 December 2021

Share capital
£

Share premium
£

Revaluation reserve
£

Other reserves
£

Profit and loss account
£

Total
£

At 1 January 2020

100,596

115,944

132,197

3,663,834

5,692,654

9,705,225

Loss for the year

-

-

-

-

(2,195,864)

(2,195,864)

Total comprehensive income

-

-

-

-

(2,195,864)

(2,195,864)

Transfers

-

-

(6,020)

-

6,020

-

At 31 December 2020

100,596

115,944

126,177

3,663,834

3,502,810

7,509,361

Share capital
£

Share premium
£

Revaluation reserve
£

Other reserves
£

Profit and loss account
£

Total
£

At 1 January 2021

100,596

115,944

126,177

3,663,834

3,502,810

7,509,361

Loss for the year

-

-

-

-

(3,247,762)

(3,247,762)

Total comprehensive income

-

-

-

-

(3,247,762)

(3,247,762)

Transfers

-

-

(6,020)

-

6,020

-

At 31 December 2021

100,596

115,944

120,157

3,663,834

261,068

4,261,599

 

Ebac Limited

Notes to the Financial Statements for the Year Ended 31 December 2021

1

General information

The company is a private company limited by share capital, incorporated in England and Wales.

The address of its registered office is Ketton Way, Aycliffe Industrial Park, Newton Aycliffe, County Durham, DL5 6SR.

2

Accounting policies

Summary of significant accounting policies and key accounting estimates

The principal accounting policies applied in the preparation of these financial statements are set out below. These policies have been consistently applied to all the years presented, unless otherwise stated.

Statement of compliance

These financial statements were prepared in accordance with Financial Reporting Standard 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland'.

Basis of preparation

These financial statements have been prepared using the historical cost convention except that as disclosed in the accounting policies certain items are shown at fair value.

These financial statements are prepared in sterling which is the functional currency of the entity.

Summary of disclosure exemptions

The entity satisfies the criteria of being a qualifying entity as defined in FRS 102. As such, advantage has been taken of the following disclosure exemptions available under paragraph 1.12 of FRS 102:

(a) Disclosures in respect of each class of share capital have not been presented.
(b) No cash flow statement has been presented for the company.
(c) Disclosures in respect of financial instruments have not been presented.
(d) No disclosure has been given for the aggregate remuneration of key management personnel.

The company has taken advantage of the exemption available under paragraph 33.1A of FRS 102 and does not disclose related party transactions with members of the same group that are wholly owned.

Name of parent of group

These financial statements are consolidated in the financial statements of Ebac Holdings Limited.

The financial statements of Ebac Holdings Limited may be obtained from Ketton Way, Aycliffe Business Park, Newton Aycliffe, County Durham, DL5 6SR.

 

Ebac Limited

Notes to the Financial Statements for the Year Ended 31 December 2021 (continued)

2

Accounting policies (continued)

Going concern

The financial statements have been prepared on a going concern basis. As at 31 December 2021 the company reported net current liabilities of £2,261,283 (excluding non-current debtors) including amounts due to group undertakings of £8,752,136 and net assets of £4,261,599. The company meets its day to day working capital requirements through its cash balances, external financing and intercompany funding and the company has received a letter of support indicating that group undertakings will not seek repayment of the amounts due to them until such time as the company has the funds available to make such repayments.

A cross guarantee exists, in respect of bank debt, between the company and members of the Ebac Holdings Limited Group. As a result the directors assess going concern on a combined group basis.

As at 31 December 2021 the group reported net current assets of £7,643,319 and net assets of £2,859,962. The group meets its day to day working capital requirements through a combination of cash generated from operations, funding from connected parties and external bank and finance provider funding. Subsequent to the year end the group experienced pressure on cash flows which resulted in the group breaching covenants attached to some of its debt facilities. As a result the group has actively sought to refinance and, via a combination of the provision of short term working capital facilities from external parties, loans from directors and the successful acquirement of new invoice discounting facilities of £2.5M and bank debt of £1.5M the group has refinanced on a long term basis. In addition to the refinancing the group has addressed its cost base via a combination of a reduction in head count and also undertaking a significant efficiency drive which has resulted in a significant improvement in trading performance which the directors are forecasting will continue going forward. The order book for the group’s core dehumidifier products has continued to strengthen from a strong base and orders for water coolers remain at good levels. In addition to this the group has recently launched a new heat pump product line which the directors believe represents a significant opportunity for the group going forward and forecasts for this product line look promising. The group is currently in discussion with a number of parties regarding potential additional finance to aid the development and production of the heat pump line and believe that this opportunity will generate significant funds for the group in future years.

As noted above the group has refinanced a large element of its external financing. Post year end the group has also received loans from connected parties currently totalling c£1m which are owed to the individuals personally. The group has received assurances that these individuals remain supportive of the group and the forecasts assume that this will continue to be the case.

The directors have prepared forecasts for the next 12 months and beyond covering a range of scenarios. The group’s traditional product lines, including dehumidifiers and water coolers, are expected to continue to perform strongly and the directors have good visibility of future customer orders for these products. The forecasts include a significant growth in sales, profits and cash flows generated from the heat pump product line and whilst the directors are confident that the group’s heat pump product line will grow significantly, the forward visibility of significant order volume is currently very limited.

 

Ebac Limited

Notes to the Financial Statements for the Year Ended 31 December 2021 (continued)

2

Accounting policies (continued)

Accordingly, the directors have prepared alternative forecasts to show a scenario where there are no heat pump sales for the next 12 months – the directors consider this to be very much a worst case scenario and highly unlikely. However, under this worst case scenario forecast, the group is forecasting to be able to continue to operate under the facilities currently available to it. Although the forecasts were prepared taking into account the matters above and they support the ability of the group to remain a going concern and to be able to trade and meet its debts as they fall due the underlying trading assumptions used in forecasting are best estimates and could be subject to potential variation. However, the directors are confident that these uncertainties do not represent a material uncertainty regarding the group’s ability to continue as a going concern. Based on the factors set out above, the directors believe that it remains appropriate to prepare the financial statements on a going concern basis.

Judgements

The preparation of the financial statements requires management to make judgements, estimates and assumptions that affect the amounts reported. These estimates and judgements are continually reviewed and are based on experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances.

The judgements (apart from those involving estimations) that management has made in the process of applying the entity's accounting policies and that have the most significant effect on the amounts recognised in the financial statements are as follows:

Assessing indicators of impairment - In assessing whether there have been indicators of impairment of assets, the directors have considered both external and internal sources of information such as market conditions, counterparty credit ratings and experience of recoverability.

 

Ebac Limited

Notes to the Financial Statements for the Year Ended 31 December 2021 (continued)

2

Accounting policies (continued)

Key sources of estimation uncertainty

Accounting estimates and assumptions are made concerning the future and, by their nature, will rarely equal the related actual outcome. The key assumptions and other sources of estimation uncertainty that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are as follows:

Useful economic lives of tangible assets - The annual depreciation charge is sensitive to changes in the estimated useful lives of the assets. The useful economic lives are re-assessed annually. They are amended when necessary to reflect current estimates, future investments and economic utilisation. The carrying amount is £5,092,558 (2020 - £6,182,745).

Stock provision - The company has made an assumption of writing down the value of stock on items in which they expect the cost to exceed the net realisable value before it is fully sold/utilised. This assumption has involved looking at the historic sales patterns and expected sales in future years. Provision for obsolete stock is based on a review of past usage over a two year period on current stock levels. The carrying amount is £1,149,039 (2020 - £1,106,572).

Impairment of debtors - The company makes an estimate of the recoverable value of the trade and other debtors. When assessing impairment of trade and other debtor, management considers factors including the current credit rating of the debtor, the ageing profile of debtors and historical experience. The carrying amount is £775,282 (2020 - £814,556).

Warranty provision - The company has made an estimate of the cost to repair or replace a number of units that are under warranty period between one and five years. The provision requires the company to estimate the level of returns expected based on past level of faulty products as well as an additional general provision to cover other items. The carrying amount is £328,207 (2020 - £260,207).

Revenue recognition

Turnover represents the value of sales made during the year net of discounts, rebates, returns and Value Added Tax. Turnover is recognised when the goods are physically dispatched to the customer.

Certain products are sold under extended credit terms. At each balance sheet date any trade receivables in respect of such sales are included in the balance sheet at the lower of book value translated at closing rate where the debt is an export; or, book value less provision for doubtful debt or credit note provision.

Government grants

Under the accrual model, government grants relating to revenue are recognised on a systematic basis over the periods in which the company recognises the related costs for which the grant is intended to compensate. Grants that are receivable as compensation for expenses or losses already incurred or for the purpose of giving immediate financial support to the entity with no future related costs are recognised in income in the period in which it becomes receivable.

Government grants are presented separately and disclosed in other operating income. Other operating income includes the UK Government assistance provided through Coronavirus Job Retention Scheme during the COVID-19 Pandemic.

Grants relating to assets are recognised in income on a systematic basis over the expected useful life of the asset. Where part of a grant relating to an asset is deferred, it is recognised as deferred income and not deducted from the carrying amount of the asset.

 

Ebac Limited

Notes to the Financial Statements for the Year Ended 31 December 2021 (continued)

2

Accounting policies (continued)

Foreign currency transactions and balances

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 the transaction. Exchange differences are taken into account in arriving at the operating profit.

Tax

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

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

Deferred tax is recognised in respect of all timing differences between taxable profits and profits reported in the financial statements. Unrelieved tax losses and other deferred tax assets are recognised when it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits. Deferred tax is measured using the tax rates and laws that have been enacted or substantively enacted by the reporting date and that are expected to apply to the reversal of the timing difference.

Tangible assets

Tangible assets are stated in the statement of financial position at cost, less any subsequent accumulated depreciation and subsequent accumulated impairment losses. Any tangible assets carried at revalued amounts are recorded at the fair value at the date of revaluation less any subsequent accumulated depreciation.

The cost of tangible assets includes directly attributable incremental costs incurred in their acquisition and installation.

Depreciation

Depreciation is charged so as to write off the cost of assets, other than land and properties under construction over their estimated useful lives, as follows:

Asset class

Depreciation method and rate

Freehold property

50 years straight line

Leasehold property

Over the lease of the term

Plant and machinery

6-7 years straight line

Equipment

3-7 years straight line

Depreciation is not charged on assets in the course of construction until they are brought into use.

Intangible assets

Intangible assets are initially recorded at cost and are subsequently stated at cost less any accumulated amortisation and impairment loss.

 

Ebac Limited

Notes to the Financial Statements for the Year Ended 31 December 2021 (continued)

2

Accounting policies (continued)

Amortisation

Amortisation is provided on intangible assets so as to write off the cost, less any estimated residual value, over their useful life as follows:

Asset class

Amortisation method and rate

Intellectual property rights

5 years straight line

Investment in own shares

FRS 102 Section 9 requires that an investment in the company's own shares, such as the shares held by the Ebac Employee Benefit Trust, should be shown as a deduction from shareholders' funds and that any cash held by the Employee Benefit Trust is included within the company's cash. FRS 102 section 9 further requires that where the original shares held by the Employee Benefit Trust were company shares but are now parent company shares, those shares are shown as an investment in the parent company rather than as a deduction from shareholders funds.

Trade debtors

Trade debtors are amounts due from customers for merchandise sold or services performed in the ordinary course of business.

Trade debtors are recognised initially at the transaction price. They are subsequently measured at amortised cost using the effective interest method, less provision for impairment. A provision for the impairment of trade debtors is established when there is objective evidence that the company will not be able to collect all amounts due according to the original terms of the receivables.

Stocks

Stocks are stated at the lower of cost and estimated selling price less costs to complete and sell. Cost is determined using the first-in, first-out (FIFO) method.

The cost of finished goods and work in progress comprises direct materials and, where applicable, direct labour costs and those overheads that have been incurred in bringing the inventories to their present location and condition. At each reporting date, stocks are assessed for impairment. If stocks are 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.

Trade creditors

Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Accounts payable are classified as current liabilities if the company does not have an unconditional right, at the end of the reporting period, to defer settlement of the creditor for at least twelve months after the reporting date. If there is an unconditional right to defer settlement for at least twelve months after the reporting date, they are presented as non-current liabilities.

Trade creditors are recognised initially at the transaction price and subsequently measured at amortised cost using the effective interest method.

 

Ebac Limited

Notes to the Financial Statements for the Year Ended 31 December 2021 (continued)

2

Accounting policies (continued)

Borrowings

Interest-bearing borrowings are initially recorded at fair value, net of transaction costs. Interest-bearing borrowings are subsequently carried at amortised cost, with the difference between the proceeds, net of transaction costs, and the amount due on redemption being recognised as a charge to the income statement over the period of the relevant borrowing.

Interest expense is recognised on the basis of the effective interest method and is included in interest payable and similar charges.

Borrowings are classified as current liabilities unless the company has an unconditional right to defer settlement of the liability for at least twelve months after the reporting date.

Warranties

Included within the standard sales value of domestic products supplied by the company is a warranty. Provision is made for the estimated costs expected to arise in respect of these warranty obligations. Included within this provision are estimates of further financial commitments to customers arising under product recall or other product performance commitments.

Revenue from the sale of extended warranties is deferred and released to profit over the period of the warranty. Costs incurred under extended warranty agreements are expensed as they arise.

Impairment of fixed assets

A review for indicators of impairment is carried out at each reporting date, with the recoverable amount being estimated where such indicators exist. Where the carrying value exceeds the recoverable amount, the asset is impaired accordingly. Prior impairments are also reviewed for possible reversal at each reporting date.

For the purposes of impairment testing, when it is not possible to estimate the recoverable amount of an individual asset, an estimate is made of the recoverable amount of the cash-generating unit to which the asset belongs. The cash-generating unit is the smallest identifiable group of assets that includes the asset and generates cash inflows that largely independent of the cash inflows from other assets or groups of assets.

Research and development expenditure

Research and development expenditure is written off in the year in which it is incurred.

 

Ebac Limited

Notes to the Financial Statements for the Year Ended 31 December 2021 (continued)

2

Accounting policies (continued)

Leases

Leases in which substantially all the risks and rewards of ownership are retained by the lessor are classified as operating leases. Payments made under operating leases are charged to profit or loss on a straight-line basis over the period of the lease.

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

Assets held under finance leases are recognised at the lower of their fair value at inception of the lease and the present value of the minimum lease payments. These assets are depreciated on a straight-line basis over the shorter of the useful life of the asset and the lease term. The corresponding liability to the lessor is included in the statement of financial position as a finance lease obligation.

Lease payments are apportioned between finance costs in the income statement and reduction of the lease obligation so as to achieve a constant periodic rate of interest on the remaining balance of the liability.

Share capital

Ordinary shares are classified as equity. Equity instruments are measured at the fair value of the cash or other resources received or receivable, net of the direct costs of issuing the equity instruments. If payment is deferred and the time value of money is material, the initial measurement is on a present value basis.

Defined contribution pension obligation

A defined contribution plan is a pension plan under which fixed contributions are paid into a pension fund and the company has no legal or constructive obligation to pay further contributions even if the fund does not hold sufficient assets to pay all employees the benefits relating to employee service in the current and prior periods.

Contributions to defined contribution plans are recognised as employee benefit expense when they are due. If contribution payments exceed the contribution due for service, the excess is recognised as a prepayment.

Derivative financial instruments

Derivative financial instruments are recognised at fair value. The gain or loss on remeasurement to fair value is recognised immediately within the profit and loss account.

 

Ebac Limited

Notes to the Financial Statements for the Year Ended 31 December 2021 (continued)

3

Turnover

The analysis of the company's turnover for the year from continuing operations is as follows:

2021
£

2020
£

Sale of goods

20,132,445

16,794,165

The analysis of the company's turnover for the year by market is as follows:

2021
£

2020
£

UK

6,864,032

5,127,710

Europe

9,192,647

8,217,628

Rest of world

4,075,766

3,448,827

20,132,445

16,794,165

4

Other operating income

The analysis of the company's other operating income for the year is as follows:

2021
 £

2020
 £

Government grants

74,577

467,176

Included within government grant income is £21,594 (2020 - £414,193) in relation to monies received during the year in respect of the government's Coronavirus Job Retention Scheme. The remaining £52,983 (2020 - £52,983) relates to the release of grant funds received from the Regional Growth Fund in previous years.

5

Operating loss

Arrived at after charging/(crediting)

2021
£

2020
£

Depreciation expense

1,258,498

1,249,052

Write-down of stocks to net realisable value

-

115,877

Research and development cost

-

589

Foreign exchange losses/(gains)

42,798

(7,639)

Profit on disposal of property, plant and equipment

-

(1,400)

6

Other interest receivable and similar income

2021
 £

2020
 £

Interest received from group undertakings

214,830

204,600

 

Ebac Limited

Notes to the Financial Statements for the Year Ended 31 December 2021 (continued)

7

Interest payable and similar expenses

2021
 £

2020
 £

Interest on bank overdrafts and borrowings

254,252

219,597

Interest payable to group undertakings

291,860

230,141

546,112

449,738

8

Staff costs

The aggregate payroll costs (including directors' remuneration) were as follows:

2021
 £

2020
 £

Wages and salaries

5,687,338

5,050,803

Social security costs

459,099

421,748

Pension costs, defined contribution scheme

174,940

168,905

6,321,377

5,641,456

The average number of persons employed by the company (including directors) during the year, analysed by category was as follows:

2021
No.

2020
No.

Production

168

172

Administration and support

56

50

Other departments

12

12

236

234

9

Directors' remuneration

The directors' remuneration for the year was as follows:

2021
 £

2020
 £

Remuneration

330,748

370,149

Contributions paid to money purchase schemes

40,000

40,000

370,748

410,149

During the year the number of directors who were receiving benefits and share incentives was as follows:

2021
 No.

2020
 No.

Accruing benefits under money purchase pension scheme

1

1

 

Ebac Limited

Notes to the Financial Statements for the Year Ended 31 December 2021 (continued)

9

Directors' remuneration (continued)

In respect of the highest paid director:

2021
 £

2020
 £

Remuneration

132,099

151,737

Company contributions to money purchase pension schemes

40,000

40,000

10

Auditor's remuneration

2021
£

2020
£

Audit of the financial statements

47,300

47,300

The above audit fee includes a charge in relation to other group companies of the Ebac Holdings Limited group.

11

Taxation

Tax charged/(credited) in the income statement

2021
 £

2020
 £

Current taxation

UK corporation tax

(113,809)

(113,054)

UK corporation tax adjustment to prior periods

(25)

728

(113,834)

(112,326)

Deferred taxation

Arising from origination and reversal of timing differences

21,616

(334,028)

Arising from changes in tax rates and laws

(65,486)

11,279

Total deferred taxation

(43,870)

(322,749)

Tax credit in the income statement

(157,704)

(435,075)

 

Ebac Limited

Notes to the Financial Statements for the Year Ended 31 December 2021 (continued)

11

Taxation (continued)

The tax on profit before tax for the year is higher than the standard rate of corporation tax in the UK (2020 - higher than the standard rate of corporation tax in the UK) of 19% (2020 - 19%).

The differences are reconciled below:

2021
£

2020
£

Loss before tax

(3,405,466)

(2,630,939)

Corporation tax at standard rate

(647,039)

(499,878)

Effect of revenues exempt from taxation

(18,429)

(52,223)

Effect of expense not deductible in determining taxable profit (tax loss)

13,603

70,790

UK deferred tax (credit)/expense relating to changes in tax rates or laws

(65,486)

11,279

Increase from tax losses for which no deferred tax asset was recognised

588,333

258,179

(Decrease)/increase in UK and foreign current tax from adjustment for prior periods

(25)

728

Tax increase arising from group relief

20,309

6,872

Tax decrease from effect of adjustment in research and development tax credit

(48,970)

(48,645)

Other tax effects for reconciliation between accounting profit and tax expense (income)

-

(182,177)

Total tax credit

(157,704)

(435,075)

Deferred tax

Deferred tax assets and liabilities

2021

Asset
£

Accelerated capital allowance

(537,661)

Unused tax losses

816,715

Deferred tax - other timing differences

(12,765)

 

266,289

2020

Asset
£

Accelerated capital allowance

(520,139)

Unused tax losses

739,567

Deferred tax - other timing differences

2,991

 

222,419

There are £4,357,892 of unused tax losses (2020 - £1,358,837) for which no deferred tax asset is recognised in the statement of financial position.

 

Ebac Limited

Notes to the Financial Statements for the Year Ended 31 December 2021 (continued)

11

Taxation (continued)

In the Spring Budget 2021, the Government announced that from 1 April 2023 the corporation tax rate will increase from 19% to 25%. This new law was substantively enacted on 24 May 2021. The deferred tax balances at 31 December 2021 have been calculated based on these enacted rates.

12

Intangible assets

Intellectual property rights
£

Cost or valuation

At 1 January 2021

25,001

Disposals

(25,001)

At 31 December 2021

-

Amortisation

At 1 January 2021

25,001

Amortisation eliminated on disposals

(25,001)

At 31 December 2021

-

Carrying amount

At 31 December 2021

-

At 31 December 2020

-

 

Ebac Limited

Notes to the Financial Statements for the Year Ended 31 December 2021 (continued)

13

Tangible assets

Land and buildings
£

Plant and machinery
£

Equipment
£

Total
£

Cost or valuation

At 1 January 2021

676,599

15,513,548

195,221

16,385,368

Additions

-

152,417

15,894

168,311

At 31 December 2021

676,599

15,665,965

211,115

16,553,679

Depreciation

At 1 January 2021

439,936

9,625,762

136,925

10,202,623

Charge for the year

20,157

1,226,450

11,891

1,258,498

At 31 December 2021

460,093

10,852,212

148,816

11,461,121

Carrying amount

At 31 December 2021

216,506

4,813,753

62,299

5,092,558

At 31 December 2020

236,663

5,887,786

58,296

6,182,745

Revaluation

Had the company's freehold land and buildings been measured on a historical cost basis, the carrying amount would have been £55,097 (2020 - £57,922).

Assets held under finance leases and hire purchase contracts

The net carrying amount of tangible assets includes the following amounts in respect of assets held under finance leases and hire purchase contracts:

 

2021
£

2020
£

Plant and machinery

149,514

196,170

     

Included within the net book value of land and buildings above is £172,475 (2020 - £181,320) in respect of freehold land and buildings and £44,031 (2020 - £55,343) in respect of long leasehold land and buildings.

14

Investments

2021
 £

2020
 £

Investments

641,428

641,428

 

Ebac Limited

Notes to the Financial Statements for the Year Ended 31 December 2021 (continued)

14

Investments (continued)

£

Cost

At 1 January 2021

641,428

At 31 December 2021

641,428

Provision

At 1 January 2021

-

At 31 December 2021

-

Carrying amount

At 31 December 2021

641,428

At 31 December 2020

641,428

The unlisted investment represents an investment held in Ebac Holdings Limited by the Ebac Group Employee Benefit Trust. The investment is shown in the financial statements of the company in accordance with the provisions of FRS 102 Section 9.

15

Stocks

2021
 £

2020
 £

Raw materials and consumables

5,462,222

4,713,379

Finished goods and goods for resale

1,579,733

1,223,200

7,041,955

5,936,579

16

Debtors

Note

2021
£

2020
£

Trade debtors

 

3,984,776

4,289,645

Amounts owed by related parties

 

4,512,825

4,298,253

Other debtors

 

535,134

457,813

Prepayments

 

1,494,745

1,227,402

Deferred tax assets

11

266,289

222,419

Corporation tax asset

 

226,818

269,184

   

11,020,587

10,764,716

Total non current element of trade and other debtors

 

(4,593,935)

(4,566,098)

 

6,426,652

6,198,618

The company enters into foreign currency contracts to mitigate the exchange rate risk for foreign currency transactions. The forward currency contracts are measured at fair value using quoted forward exchange rates. Included within other debtors is £49,341 (2020 - £Nil) in relation to a financial asset. At 31 December 2021 a financial liability of £Nil (2020 - £12,985) has been recognised in other creditors.

 

Ebac Limited

Notes to the Financial Statements for the Year Ended 31 December 2021 (continued)

16

Debtors (continued)

Also included within other debtors is an amount of £430,000 (2020 - £430,000) in relation to the EBT Investment. A corresponding amount has also been recognised within other creditors.

Details of non-current trade and other debtors

£82,510 (2020 - £269,503) of trade debtors is classified as non current. The debtors due after more than one year relate to customers on extended credit terms with a payment plan in place to recover the amounts due.

£4,511,425 (2020 - £4,296,595) of amounts owed by related parties is classified as non current.

17

Creditors

Note

2021
 £

2020
 £

Due within one year

 

Loans and borrowings

18

1,545,079

472,724

Trade creditors

 

1,813,205

1,434,943

Amounts due to related parties

 

8,752,136

7,627,372

Social security and other taxes

 

125,007

106,056

Other creditors

 

2,215,443

602,061

Accruals and deferred income

 

1,291,138

1,596,925

 

15,742,008

11,840,081

Due after one year

 

Loans and borrowings

18

3,213,798

3,629,806

Deferred income

 

402,622

451,137

 

3,616,420

4,080,943

Included within bank loans and borrowings is a bank overdraft of £878,355 (2020 - £Nil) which is secured by a debenture over all the assets of the company and an intercompany guarantee with other members of the Ebac Holdings Limited group.

During 2018 the company entered into a loan agreement to borrow £970,000 from J M Elliott MBE and M R Elliott. The company pays interest at a rate of 2.25% above base rate per annum. The loan is repayable in five equal annual instalments and the balance outstanding at the year end is £590,026 (2020 - £592,362).

During 2018 the company also borrowed funds from Cabe Property Limited. The balance outstanding and included in other borrowings at the year end was £2,558,296 (2020 - £2,516,389). The company pays interest at a rate of 2% above base rate per annum. The balance is due for repayment before 31 December 2025.

During 2019 the company entered into a loan agreement to borrow £1,000,000 from The Trustees of Ebac Limited Retirement Benefits Scheme. The balance outstanding and included in other borrowings at the year end was £631,537 (2020 - £834,145). The company pays interest at a rate of 3.0% per annum on the principal amount. The balance is due for repayment in five equal annual instalments.

 

Ebac Limited

Notes to the Financial Statements for the Year Ended 31 December 2021 (continued)

17

Creditors (continued)

Included within other creditors is £Nil (2020 - £12,985) in relation to a financial liability. The company enters into foreign currency contracts to mitigate the exchange rate risk for foreign currency transactions. At 31 December 2021 the company had one open contracts to sell €6,700,000 at fixed dates for fixed sterling amounts. The forward currency contracts are measured at fair value using quoted forward exchange rates.

Included within other creditors is an amount of £1,757,327 (2020 - £159,072) in relation to invoice financing.

18

Loans and borrowings

2021
 £

2020
 £

Current loans and borrowings

Bank overdrafts

878,355

-

Hire purchase and finance lease liabilities

60,369

60,369

Other borrowings

606,355

412,355

1,545,079

472,724

2021
 £

2020
 £

Non-current loans and borrowings

Hire purchase and finance lease liabilities

40,293

99,265

Other borrowings

3,173,505

3,530,541

3,213,798

3,629,806

19

Provisions

Warranties
£

Total
£

At 1 January 2021

260,207

260,207

Additional provisions

70,382

70,382

Provisions used

(2,382)

(2,382)

At 31 December 2021

328,207

328,207

The warranty provision represents an estimate of the cost of settling warranty claims during the warranty period.

20

Pension and other schemes

Defined contribution pension scheme

The company operates a defined contribution pension scheme. The pension cost charge for the year represents contributions payable by the company to the scheme and amounted to £174,940 (2020 - £168,905).

Contributions totalling £27,908 (2020 - £4) were payable to the scheme at the end of the year and are included in creditors.

 

Ebac Limited

Notes to the Financial Statements for the Year Ended 31 December 2021 (continued)

21

Share capital

Allotted, called up and fully paid shares

 

2021

2020

 

No.

£

No.

£

Ordinary shares of £0.01 each

10,059,600

100,596

10,059,600

100,596

         

22

Reserves

Share premium

This reserve records the amount above the nominal value received for shares sold, less transaction costs.

Revaluation reserve

This reserve records the value of asset revaluations and fair value movements on assets recognised in other comprehensive income.

Other reserve

The other reserve represents an unrealised profit which was created upon the transfer of the commercial division of Ebac Industrial Products Limited, at the directors' estimate of fair value.

23

Obligations under leases and hire purchase contracts

Finance leases

The total of future minimum lease payments is as follows:

2021
£

2020
£

Not later than one year

60,369

60,369

Later than one year and not later than five years

40,293

99,265

100,662

159,634

Liabilities relating to hire purchase and finance lease agreements are secured against the assets to which they relate.

 

Ebac Limited

Notes to the Financial Statements for the Year Ended 31 December 2021 (continued)

23

Obligations under leases and hire purchase contracts (continued)

Operating leases

The total of future minimum lease payments is as follows:

2021
£

2020
£

Not later than one year

412,456

415,882

Later than one year and not later than five years

983,078

1,390,180

1,395,534

1,806,062

The amount of non-cancellable operating lease payments recognised as an expense during the year was £416,827 (2020 - £415,882).

24

Contingent liabilities

Financial guarantee contracts

The company has entered into a cross-guarantee with Ebac Holdings Limited, Ebac Group Limited, Ebac Waterfall Limited and Ebac Industrial Products Limited with respect to their banking facilities. At the year end there was £Nil (2020 - £Nil) unrecognised in the balance sheet in respect of these bank guarantees.

There is a fixed and floating charge over the undertaking and all property in the form of a debenture dated April 2006.

25

Related party transactions

Ebac Limited is related to the following individuals who own two properties from which the company operates. J C Laverick (Director of Ebac Group Limited - Parent Company), J M Elliott MBE (Director), Mrs M R Elliott (Director of Ebac Group Limited - Parent Company), Ms P Petty (close family member to key management personnel) and Ms A Hird (Director and Company Secretary). Ebac Limited is related to Cabe Property Limited due to J M Elliott MBE being a common director.

During the year rent on these properties of £470,856 (2020 - £471,056) was incurred by the company. As at the year end no balances were owed to or from the individuals other than as noted below.

At the year end the balance outstanding to Cabe Property Limited included within trade creditors amounted to £7,713 (2020 - £2,053). In 2018, the company also borrowed funds from Cabe Property Limited. The balance outstanding included within other borrowings at the year end amounted to £2,558,296 (2020 - £2,516,389).

Ebac Limited is related to Aqua 24/7 due to the common directors and financial interests. At the year end there was a balance of £64,401 included within trade debtors (2020 - £46,546).

During 2019, the company borrowed funds from The Trustees of Ebac Limited Retirement Benefits Scheme. The balance outstanding included within other borrowings at the year end amounted to £631,537 (2020 - £834,145).

 

Ebac Limited

Notes to the Financial Statements for the Year Ended 31 December 2021 (continued)

25

Related party transactions (continued)

Transactions with directors

2021

At 1 January 2021
£

Repayments to director
£

Interest charged on loan
£

At 31 December 2021
£

J M Elliott MBE

JM and Mrs MR Elliott Loan

(592,362)

12,276

(9,940)

(590,026)

         

2020

At 1 January 2020
£

Repayments to director
£

Interest charged on loan
£

At 31 December 2020
£

J M Elliott MBE

JM and Mrs MR Elliott Loan

(777,357)

205,004

(20,009)

(592,362)

         
       

 

26

Parent and ultimate parent undertaking

The company's immediate parent is Ebac Group Limited, incorporated in England and Wales.

 The ultimate parent is Ebac Holdings Limited, incorporated in England and Wales.

 The most senior parent entity producing publicly available financial statements is Ebac Holdings Limited. These financial statements are available upon request from Ketton Way, Aycliffe Industrial Park, Newton Aycliffe, County Durham, DL5 6SR which is also the registered office of the ultimate parent company.