Company Registration No. 01089991 (England and Wales)
EBAC LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
EBAC LIMITED
COMPANY INFORMATION
Directors
JM Elliott MBE
A Hird
Secretary
A Hird
Company number
01089991
Registered office
Ketton Way
Aycliffe Industrial Park
Newton Aycliffe
United Kingdom
DL5 6SR
Auditor
Johnston Carmichael LLP
Maybrook House
27 Grainger Street
Newcastle Upon Tyne
NE1 5JE
EBAC LIMITED
CONTENTS
Page
Strategic report
1 - 2
Directors' report
3 - 5
Directors' responsibilities statement
6
Independent auditor's report
7 - 10
Profit and loss account
11
Statement of comprehensive income
12
Balance sheet
13
Statement of changes in equity
14
Notes to the financial statements
15 - 33
EBAC LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
- 1 -

The directors present the strategic report for the year ended 31 December 2023.

Fair review of the business

Despite a challenging market environment, the accounts for the year ending 2023 demonstrate an improvement in our financial performance compared to 2022. Although Turnover is down our losses have reduced. Turnover for the year stood at £17,750,329, a decline from £21,759,274 in 2022. This decrease was primarily attributable to necessary strategic changes.

 

Gross profit remained stable at £4,525,508 (compared to £4,989,610 in 2022), underscoring the effectiveness of our cost management efforts. Notably, administrative expenses were significantly reduced from £8,202,547 to £5,950,438, reflecting our restructuring initiatives. While distribution costs were largely consistent, we did not benefit from exceptional items as we had in the previous year (2022: £626,895).

 

Our operating loss narrowed to £1,531,078 in 2023 from £2,693,591 in 2022, due to the improvements in operational efficiency and market focus. However, interest payable increased to £1,076,442 due to refinancing activities, which were necessary to support product development and market expansion. As a result, the overall loss before taxation reduced to £2,329,295 from £3,190,104 in the previous year.

 

The financial position at the year end, was worsened due to the loss in the year. Net current liabilities are £1,732,200 (2022 Net current assets - £1,174,957) and the company has net liabilities of £1,426,146 in comparison to a net asset position of £1,076,281 in 2022.

 

During 2023, we continued with product developments that are looking very positive. Our British-designed heat pumps and home ventilation and dehumidification systems have USP’s that are receiving strong interest from landlords, Social housing organisations and National builders. These products also have synergy with our technology and market know how.

 

While these products have not yet translated into revenue growth, we strongly believe they will deliver significant profits and will make Ebac a leader in energy-efficient and sustainable home solutions. We have spent more than £3 million on these projects which has meant high borrowings and weakened our Balance Sheet.

Principal risks and uncertainties

Ebac core products range are in established markets that are unlikely to change significantly. To maintain 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 core products and continue to develop new products for new markets, mainly heat pumps and ventilation. We acknowledge risks such as supply chain, logistical challenges, competition and regulatory challenges arise when looking at new geographical markets but believe our history of supplying products through Europe and the Rest of the World will put us in a good position to do so. We also acknowledge the challenges in releasing new products but significant time and development has gone into these and we continue to work alongside new customers to minimise the risk when releasing the new products.

Future developments

We are currently going through a re-financing process where the directors and some of the related party liabilities are going to be capitalised to stabilise and strengthen the balance sheet.

Key performance indicators

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

 

KPI

Unit

2023

2022

Increase/decrease in sales

%

(18)

8

Gross profit margin

%

25

23

Earnings before interest, tax, depreciation and amortisation (“EBITDA”)

£

(304,021)

(1,386,978)

 

EBAC LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 2 -

On behalf of the board

JM Elliott MBE
Director
7 March 2025
EBAC LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
- 3 -

The directors present their annual report and financial statements for the year ended 31 December 2023.

 

The company's accounting reference date is 29 December 2023 and the company has taken advantage of the option available under s390(3) of the Companies Act 2006 to prepare its financial statements for the year ended 31 December 2023.

Principal activities

The principal activity of the company continued to be that of developing, manufacturing and selling electrical appliances.

Results and dividends

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

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

Directors

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

JM Elliott MBE
A Hird
Qualifying third party indemnity provisions

The company has made qualifying third party indemnity provisions for the benefit of its directors during the year. These provisions remain in force at the reporting date.

Financial instruments

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.

 

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. 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.

 

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.

EBAC LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 4 -
Research and development

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

 

Going concern

Ebac Limited (“the company”) is a subsidiary of Ebac Holdings Limited (“the group”). The company is party to a cross-guarantee in respect of its bank borrowings and those of certain other group members. Further details are provided in Note 25.

 

The company has incurred a loss of £2,502,427 for the year, has net current liabilities of £1,732,200 and net liabilities of £1,426,146 as at 31 December 2023.

 

The company meets its day to day working capital requirements through its cash balances, a loan from a fellow subsidiary, external financing via an invoice finance agreement, stocking loans and loans from connected parties as disclosed in Note 17.

 

During the year and the subsequent period to 31 December 2024, the company was in breach of covenants in its invoice finance agreement. The company obtained confirmation from the invoice finance provider in January 2025 that no actions or penalties would be taken in respect of these historic breaches and that they had no intention of removing the facility at that time. The directors have subsequently agreed the removal of one of the covenants from the agreement and acknowledge that meeting the remaining covenant is dependent on the level of future profitability.

 

The company was also unable to make repayment on a loan due to The Trustees of Ebac Limited Retirement Benefit Scheme and which put the loan into a default position. Under the terms of the loan agreement any default position can trigger full repayment of the loan. The company has not received a formal waiver in relation to the default and therefore the total amount due on this loan of £1,571,905 has been disclosed as due within one year. The company is in discussion with the Trustees of the scheme to roll over and extend the loan repayment however no agreement has been reached in relation to the proposal but the Trustees have not indicated they will seek repayment of the loan before the end of the term of the loan.

 

The directors continually update trading and cashflow forecasts at both company and group level, covering a period to 31 December 2027, with key assumptions reviewed by the board. Forecasts for the next 12 months from the date of approval of the accounts indicate continued revenue growth in core products, which is a key assumption in assessing going concern. The directors remain confident in forecasting growth in revenue following the return to sales of core products in FY 24. The company also generates revenues from new products, mainly heat pumps, vents and washing machines, the directors are hopeful to continue the upward trend in income from these products and to tap into the significant market of all these products. However, the going concern assumptions and forecasts are not reliant on significant growth in sales of new products. The directors monitor actual performance against budgeted performance on a regular basis against available cash flows. The directors acknowledge that the actual results for the period to 31 December 2024 aren’t as strong as they had initially hoped and the company is expected to report a loss for the period of a similar amount as in FY23 Despite this, the directors are confident that the forecasts will be achieved going forward but acknowledge that forecasts are subjective and that a material uncertainty exists until the impact of their revised strategy is reflected in the company’s results.

 

The directors believe the company has sufficient financial resources to meet its obligations as they fall due for a period of at least 12 months from the date of these financial statements and that it is therefore appropriate to prepare these accounts on a going concern basis. In making this assessment, the company has obtained written confirmation from a fellow subsidiary and certain other related parties that loans totalling £13,545,161 will not be recalled to the detriment of other creditors for a period of at least 12 months from the approval of these financial statements. However, the directors do acknowledge that as a result of the uncertainties outlined above regarding future trading performance and the continuation of the invoice financing facility and loan from the Trustees of Ebac Limited Retirement Benefit Scheme, a material uncertainty exists related to events or conditions that may cast significant doubt on the company’s ability to continue as a going concern, and that it may be unable to realise its assets and discharge its liabilities in the normal course of business.

Auditor

The auditor, Johnston Carmichael LLP, was appointed as auditor during the current year and is deemed to be reappointed under section 487(2) of the Companies Act 2006.

EBAC LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 5 -
Matters addressed in the strategic report

The company has chosen in accordance with Companies Act 2006, s. 414C(11) to set out in the company's strategic report information required by Large and Medium-sized Companies and Groups (Accounts and Reports) Regulations 2008, Sch. 7 to be contained in the directors' report. It has done so in respect of future developments to the extent that these are applicable.

Statement of disclosure to auditor

So far as each person who was a director at the date of approving this report is aware, there is no relevant audit information of which the company’s auditor is unaware. Additionally, the directors individually have taken all the necessary steps that they ought to have taken as directors in order to make themselves aware of all relevant audit information and to establish that the company’s auditor is aware of that information.

On behalf of the board
JM Elliott MBE
Director
7 March 2025
EBAC LIMITED
DIRECTORS' RESPONSIBILITIES STATEMENT
FOR THE YEAR ENDED 31 DECEMBER 2023
- 6 -

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

 

Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with 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 the profit or loss of the company for that period. In preparing these financial statements, the directors are required to:

 

 

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
- 7 -
Opinion

We have audited the financial statements of Ebac Limited (‘the company’) for the year ended 31 December 2023, which comprise the Profit and loss account, Statement of Comprehensive Income, Balance sheet, 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:

 

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.

Material uncertainty related to going concern

We draw attention to Note 1.2 in the financial statements, which indicates that the company incurred a net loss of £2,502,427 during the year ended 31 December 2023 and, as of that date, the company’s current liabilities exceeded its total assets by £1,732,200. As stated in Note 1.2, a loan due to The Trustees of Ebac Limited Retirement Benefit Scheme is in a default position in respect of which a formal waiver has not been obtained. Furthermore, as stated in Note 1.2, during the year to 31 December 2023 and subsequently, the company was in breach of covenants in its invoice finance agreement. The directors acknowledge in Note 1.2 that while written confirmation was received from the invoice finance provider that no action would be taken in relation to these historic breaches, the company is reliant on achieving a certain level of future profitability to avoid future covenant breaches. Note 1.2 also outlines uncertainties in respect of the company’s future trading and cashflow forecasts.

As stated in Note 1.2, these events or conditions, along with other matters as set forth in Note 1.2, indicate that a material uncertainty exists that may cast significant doubt on the company’s ability to continue as a going concern.

 

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 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 (CONTINUED)
TO THE MEMBERS OF EBAC LIMITED
- 8 -

Opinions on other matters prescribed by the Companies Act 2006

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

 

Matters on which we are required to report by exception

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

 

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

 

Responsibilities of directors

As explained more fully in the Directors’ responsibilities statement set out on page 6, 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

EBAC LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF EBAC LIMITED
- 9 -
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.

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

Extent to which the audit was considered capable of detecting irregularities, including fraud

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

We assessed whether the engagement team collectively had the appropriate competence and capabilities to identify or recognise non-compliance with laws and regulations by considering their experience, past performance and support available.

All engagement team members were briefed on relevant identified laws and regulations and potential fraud risks at the planning stage of the audit. Engagement team members were reminded to remain alert to any indications of fraud or non-compliance with laws and regulations throughout the audit.

We obtained an understanding of the legal and regulatory frameworks that are applicable to the company and the sector in which it operates, focusing on those provisions that had a direct effect on the determination of material amounts and disclosures in the financial statements. The most relevant frameworks we identified include:

We gained an understanding of how the company is complying with these laws and regulations by making enquiries of management and those charged with governance. We corroborated these enquiries through comparison to the audit evidence obtained during performance of our substantive audit tests and review, where available, of submitted returns and correspondence with external regulatory bodies.

 

We assessed the susceptibility of the financial statements to material misstatement, including how fraud might occur, by meeting with management and those charged with governance to understand where it was considered there was susceptibility to fraud. This evaluation also considered how management and those charged with governance were remunerated and whether this provided an incentive for fraudulent activity. We considered the overall control environment and how management and those charged with governance oversee the implementation and operation of controls. In areas of the financial statements where the risks were considered to be higher, we performed procedures to address each identified risk. We identified a heightened fraud risk in relation to:

EBAC LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF EBAC LIMITED
- 10 -

Extent to which the audit was considered capable of detecting irregularities, including fraud (continued)

In addition to the above, the following procedures were performed to provide reasonable assurance that the financial statements were free of material fraud or error:

Our audit procedures were designed to respond to the risk of material misstatements in the financial statements, recognising that 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 intentional concealment, forgery, collusion, omission or misrepresentation. There are inherent limitations in the audit procedures performed and the further removed non-compliance with laws and regulations is from the events and transactions reflected in the financial statements, the less likely we would become aware of it.

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.

Paul Shields (Senior Statutory Auditor)
For and on behalf of Johnston Carmichael LLP
7 March 2025
Statutory Auditor
Maybrook House
27 Grainger Street
Newcastle Upon Tyne
NE1 5JE
EBAC LIMITED
PROFIT AND LOSS ACCOUNT
FOR THE YEAR ENDED 31 DECEMBER 2023
- 11 -
2023
2022
Notes
£
£
Turnover
3
17,750,329
21,759,274
Cost of sales
(13,224,821)
(16,769,664)
Gross profit
4,525,508
4,989,610
Distribution costs
(147,468)
(160,532)
Administrative expenses
(5,950,438)
(8,202,547)
Other operating income
41,320
52,983
Exceptional item
4
-
0
626,895
Operating loss
5
(1,531,078)
(2,693,591)
Interest receivable and similar income
8
278,225
225,571
Interest payable and similar expenses
9
(1,076,442)
(722,084)
Loss before taxation
(2,329,295)
(3,190,104)
Tax on loss
10
(173,132)
(1,783)
Loss for the financial year
(2,502,427)
(3,191,887)

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

EBAC LIMITED
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2023
- 12 -
2023
2022
£
£
Loss for the year
(2,502,427)
(3,191,887)
Other comprehensive income
Tax relating to other comprehensive income
-
0
6,569
Total comprehensive expenditure for the year
(2,502,427)
(3,185,318)
EBAC LIMITED
BALANCE SHEET
AS AT
31 DECEMBER 2023
31 December 2023
- 13 -
2023
2022
Notes
£
£
£
£
Fixed assets
Tangible assets
11
3,100,562
4,136,860
Investments
12
641,428
789,469
3,741,990
4,926,329
Current assets
Stocks
13
7,129,817
6,651,930
Debtors falling due after more than one year
14
5,987,416
4,902,214
Debtors falling due within one year
14
5,299,753
5,428,257
Cash at bank and in hand
196,879
669,490
18,613,865
17,651,891
Creditors: amounts falling due within one year
15
(20,346,065)
(16,476,934)
Net current (liabilities)/assets
(1,732,200)
1,174,957
Total assets less current liabilities
2,009,790
6,101,286
Creditors: amounts falling due after more than one year
16
(3,120,321)
(4,611,390)
Provisions for liabilities
Provisions
19
315,615
413,615
(315,615)
(413,615)
Net (liabilities)/assets
(1,426,146)
1,076,281
Capital and reserves
Called up share capital
23
100,596
100,596
Share premium account
24
115,944
115,944
Other reserves
24
3,663,834
3,663,834
Profit and loss reserves
24
(5,306,520)
(2,804,093)
Total equity
(1,426,146)
1,076,281
The financial statements were approved by the board of directors and authorised for issue on 7 March 2025 and are signed on its behalf by:
JM Elliott MBE
Director
Company Registration No. 01089991
EBAC LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2023
- 14 -
Share capital
Share premium account
Revaluation reserve
Other reserves
Profit and loss reserves
Total
£
£
£
£
£
£
Balance at 1 January 2022
100,596
115,944
120,157
3,663,834
261,068
4,261,599
Year ended 31 December 2022:
Loss for the year
-
-
-
-
(3,191,887)
(3,191,887)
Other comprehensive income:
Tax relating to other comprehensive income
-
-
6,569
-
-
0
6,569
Total comprehensive expenditure for the year
-
0
-
0
6,569
-
0
(3,191,887)
(3,185,318)
Transfer between reserves
-
-
(126,726)
-
126,726
-
Balance at 31 December 2022
100,596
115,944
-
0
3,663,834
(2,804,093)
1,076,281
Year ended 31 December 2023:
Loss and total comprehensive expenditure for the year
-
-
-
-
(2,502,427)
(2,502,427)
Balance at 31 December 2023
100,596
115,944
-
0
3,663,834
(5,306,520)
(1,426,146)
EBAC LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
- 15 -
1
Accounting policies
Company information

Ebac Limited is a private company limited by shares incorporated in England and Wales. The registered office is Ketton Way, Aycliffe Industrial Park, Newton Aycliffe, United Kingdom, DL5 6SR.

1.1
Accounting convention

These financial statements have been prepared in accordance with FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” (“FRS 102”) and the requirements of the Companies Act 2006.

The financial statements are prepared in sterling, which is the functional currency of the company. Monetary amounts in these financial statements are rounded to the nearest £.

The financial statements have been prepared under the historical cost convention, modified to include certain financial instruments at fair value. The principal accounting policies adopted are set out below.

This company is a qualifying entity for the purposes of FRS 102, being a member of a group where the parent of that group prepares publicly available consolidated financial statements, including this company, which are intended to give a true and fair view of the assets, liabilities, financial position and profit or loss of the group. The company has therefore taken advantage of exemptions from the following disclosure requirements (where applicable):

 

 

The financial statements of the company are consolidated in the financial statements of Ebac Holdings Limited. These consolidated financial statements are available from its registered office, Ketton Way, Aycliffe Business Park, Newton Aycliffe, County Durham, DL5 6SR.

EBAC LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 16 -
1.2
Going concern

Ebac Limited (“the company”) is a subsidiary of Ebac Holdings Limited (“the group”). The company is party to a cross-guarantee in respect of its bank borrowings and those of certain other group members. Further details are provided in Notetrue 25.

 

The company has incurred a loss of £2,502,427 for the year, has net current liabilities of £1,732,200 and net liabilities of £1,426,146 as at 31 December 2023.

 

The company meets its day to day working capital requirements through its cash balances, a loan from a fellow subsidiary, external financing via an invoice finance agreement, stocking loans and loans from connected parties as disclosed in Note 17.

 

During the year and the subsequent period to 31 December 2024, the company was in breach of covenants in its invoice finance agreement. The company obtained confirmation from the invoice finance provider in January 2025 that no actions or penalties would be taken in respect of these historic breaches and that they had no intention of removing the facility at that time. The directors have subsequently agreed the removal of one of the covenants from the agreement and acknowledge that meeting the remaining covenant is dependent on the level of future profitability.

 

The company was also unable to make repayment on a loan due to The Trustees of Ebac Limited Retirement Benefit Scheme and which put the loan into a default position. Under the terms of the loan agreement any default position can trigger full repayment of the loan. The company has not received a formal waiver in relation to the default and therefore the total amount due on this loan of £1,571,905 has been disclosed as due within one year. The company is in discussion with the Trustees of the scheme to roll over and extend the loan repayment however no agreement has been reached in relation to the proposal but the Trustees have not indicated they will seek repayment of the loan before the end of the term of the loan.

 

The directors continually update trading and cashflow forecasts at both company and group level, covering a period to 31 December 2027, with key assumptions reviewed by the board. Forecasts for the next 12 months from the date of approval of the accounts indicate continued revenue growth in core products, which is a key assumption in assessing going concern. The directors remain confident in forecasting growth in revenue following the return to sales of core products in FY 24. The company also generates revenues from new products, mainly heat pumps, vents and washing machines, the directors are hopeful to continue the upward trend in income from these products and to tap into the significant market of all these products. However, the going concern assumptions and forecasts are not reliant on significant growth in sales of new products. The directors monitor actual performance against budgeted performance on a regular basis against available cash flows. The directors acknowledge that the actual results for the period to 31 December 2024 aren’t as strong as they had initially hoped and the company is expected to report a loss for the period of a similar amount as in FY23 Despite this, the directors are confident that the forecasts will be achieved going forward but acknowledge that forecasts are subjective and that a material uncertainty exists until the impact of their revised strategy is reflected in the company’s results.

 

The directors believe the company has sufficient financial resources to meet its obligations as they fall due for a period of at least 12 months from the date of these financial statements and that it is therefore appropriate to prepare these accounts on a going concern basis. In making this assessment, the company has obtained written confirmation from a fellow subsidiary and certain other related parties that loans totalling £13,545,161 will not be recalled to the detriment of other creditors for a period of at least 12 months from the approval of these financial statements. However, the directors do acknowledge that as a result of the uncertainties outlined above regarding future trading performance and the continuation of the invoice financing facility and loan from the Trustees of Ebac Limited Retirement Benefit Scheme, a material uncertainty exists related to events or conditions that may cast significant doubt on the company’s ability to continue as a going concern, and that it may be unable to realise its assets and discharge its liabilities in the normal course of business.

EBAC LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 17 -
1.3
Turnover

Turnover relates to the developing, manufacturing and selling electrical appliances and is recognised at the fair value of the consideration received or receivable for goods provided in the normal course of business. Turnover is shown net of VAT and other sales related taxes. The fair value of consideration takes into account trade discounts, settlement discounts and volume rebates.

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

1.4
Research and development expenditure

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

1.5
Tangible fixed assets

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

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

Leasehold land and buildings
Over the lease of the term
Plant and Machinery
6-7 years straight line
Equipment
3-7 years straight line

The gain or loss arising on the disposal of an asset is determined as the difference between the sale proceeds and the carrying value of the asset, and is credited or charged to the profit and loss account.

1.6
Fixed asset investments

In accordance with FRS 102 Section 9, shares of the company's parent held by the Ebac Employee Benefit Trust have been presented within company investments to the extent that the company is regarded as the sponsoring entity of the Ebac Employee Benefit Trust.

1.7
Impairment of fixed assets

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

Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.

 

If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (or cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised immediately in the profit and loss account.

EBAC LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 18 -

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

1.8
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.

 

Cost comprises direct materials and, where applicable, direct labour costs and those overheads that have been incurred in bringing the stocks to their present location and condition.

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

1.9
Cash and cash equivalents

Cash and cash equivalents are basic financial assets and include cash in hand, deposits held at call with banks and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities.

1.10
Financial instruments

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

 

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

 

Financial assets and liabilities are offset, with the net amounts presented in the financial statements, when there is a legally enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously.

Basic financial assets

Basic financial assets, which include certain debtors and cash and bank balances, are initially measured at transaction price including transaction costs and are subsequently carried at amortised cost using the effective interest method unless the arrangement constitutes a financing transaction, where the transaction is measured at the present value of the future receipts discounted at a market rate of interest. Financial assets classified as receivable within one year are not amortised.

Other financial assets

Other financial assets, including investments in equity instruments which are not subsidiaries, associates or joint ventures, are initially measured at fair value, which is normally the transaction price. Such assets are subsequently carried at fair value and the changes in fair value are recognised in profit or loss, except that investments in equity instruments that are not publicly traded and whose fair values cannot be measured reliably are measured at cost less impairment.

EBAC LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 19 -
Impairment of financial assets

Financial assets are assessed for indicators of impairment at each reporting end date.

 

Financial assets are impaired where there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial asset, the estimated future cash flows have been affected. If an asset is impaired, the impairment loss is the difference between the carrying amount and the present value of the estimated cash flows discounted at the asset’s original effective interest rate. The impairment loss is recognised in the profit and loss account.

 

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 the profit and loss account.

Derecognition of financial assets

Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire or are settled, or when the company transfers the financial asset and substantially all the risks and rewards of ownership to another entity, or if some significant risks and rewards of ownership are retained but control of the asset has transferred to another party that is able to sell the asset in its entirety to an unrelated third party.

Classification of financial liabilities

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

Basic financial liabilities

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

 

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

 

Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Amounts payable are classified as current liabilities if payment is due within one year or less. If not, they are presented as non-current liabilities. Trade creditors are recognised initially at transaction price and subsequently measured at amortised cost using the effective interest method.

Other financial liabilities

Derivatives, including forward foreign exchange contracts, are not basic financial instruments. Derivatives are initially recognised at fair value on the date a derivative contract is entered into and are subsequently re-measured at their fair value. Changes in the fair value of derivatives are recognised in profit or loss in finance costs or finance income as appropriate, unless hedge accounting is applied and the hedge is a cash flow hedge.

Derecognition of financial liabilities

Financial liabilities are derecognised when the company’s contractual obligations expire or are discharged or cancelled.

1.11
Equity instruments

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

EBAC LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 20 -
1.12
Taxation

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

Current tax

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

Deferred tax

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

 

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

1.13
Provisions

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

 

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

1.14
Employee benefits

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

 

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

 

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

1.15
Retirement benefits

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

EBAC LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 21 -
1.16
Leases

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

 

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

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

1.17
Government grants

Government grants are recognised at the fair value of the asset received or receivable when there is reasonable assurance that the grant conditions will be met and the grants will be received.

 

Government grants are recognised in accordance with the accruals model. Government grants relating to turnover are recognised as income over the periods when the related costs are incurred. Grants relating to an asset are recognised in income systematically over the asset's expected useful life. If part of such a grant is deferred it is recognised as deferred income rather than being deducted from the asset's carrying amount.

1.18
Foreign exchange

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

2
Judgements and key sources of estimation uncertainty

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

 

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

EBAC LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
2
Judgements and key sources of estimation uncertainty
(Continued)
- 22 -
Key sources of estimation uncertainty

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

Stock provisions

The company is required to exercise judgement when 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 estimation involves 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 company has a stock provision of £787,381 (2022 - £802,150) at the reporting end date.

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 debtors, management considers factors including the current credit rating of the debtor, the ageing profile of debtors and historical experience. The company has a provision in respect of doubtful debtors of £726,399 (2022 - £780,463) at the reporting end date.

Warranty provisions

In recognising warranty provisions, management are required to estimate the consideration required to settle the associated warranty obligations at the reporting end date. In making their assessment, management consider historic warranty patterns and expected claims in future years.

 

The carrying value of the company's warranty provision at the reporting date is outlined at note 19.

3
Turnover and other revenue
2023
2022
£
£
Turnover analysed by class of business
Selling of electrical appliances
17,750,329
21,759,274
2023
2022
£
£
Turnover analysed by geographical market
UK
7,833,828
6,941,306
Europe
9,243,158
9,945,038
Rest of World
673,343
4,872,930
17,750,329
21,759,274
2023
2022
£
£
Other significant revenue
Interest income
278,225
225,571
Grants received
-
52,983
Management recharges
41,320
-
EBAC LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 23 -
4
Exceptional item
2023
2022
£
£
Income
Profit on disposal of fixed assets
-
(626,895)
5
Operating loss
2023
2022
Operating loss for the year is stated after charging/(crediting):
£
£
Exchange differences apart from those arising on financial instruments measured at fair value through profit or loss
(80,432)
(176,377)
Research and development costs
317,453
266,686
Government grants
-
(52,983)
Fees payable to the company's auditor for the audit of the company's financial statements
44,250
69,000
Depreciation of owned tangible fixed assets
1,227,057
1,306,613
Operating lease charges
397,338
563,475

Fees payable to the company's auditor in the current financial year are in respect of the auditor appointed in the current year. Fees payable to the company's auditor in the comparative financial year are in respect of the company's former auditor.

 

The audit fee for the current year includes £21,250 in respect of other group companies within the Ebac Holdings Limited Group where the fees are not recharged to those entities.

6
Employees

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

2023
2022
Number
Number
Production
138
189
Administration
36
52
Management
14
13
Total
188
254

Their aggregate remuneration comprised:

2023
2022
£
£
Wages and salaries
4,725,876
5,783,219
Social security costs
422,225
514,169
Pension costs
155,288
187,042
5,303,389
6,484,430
EBAC LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 24 -
7
Directors' remuneration
2023
2022
£
£
Remuneration for qualifying services
122,539
179,706
Company pension contributions to defined contribution schemes
-
20,000
122,539
199,706

The number of directors for whom retirement benefits are accruing under defined contribution schemes amounted to 1 (2022 - 1).

8
Interest receivable and similar income
2023
2022
£
£
Interest income
Interest receivable from group companies
278,225
225,571
9
Interest payable and similar expenses
2023
2022
£
£
Interest on bank overdrafts and loans
646,068
399,806
Interest payable to group undertakings
430,374
322,278
1,076,442
722,084
10
Taxation
2023
2022
£
£
Current tax
Adjustments in respect of prior periods
(97,923)
(20)
Deferred tax
Origination and reversal of timing differences
271,055
159,300
Changes in tax rates
-
0
(151,432)
Adjustment in respect of prior periods
-
0
(6,065)
Total deferred tax
271,055
1,803
Total tax charge
173,132
1,783
EBAC LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
10
Taxation
(Continued)
- 25 -

The actual charge for the year can be reconciled to the expected credit for the year based on the profit or loss and the standard rate of tax as follows:

2023
2022
£
£
Loss before taxation
(2,329,295)
(3,190,104)
Expected tax credit based on the standard rate of corporation tax in the UK of 23.52% (2022: 19.00%)
(547,850)
(606,120)
Tax effect of expenses that are not deductible in determining taxable profit
7,248
48,406
Tax effect of income not taxable in determining taxable profit
-
0
(10,067)
Gains not taxable
-
0
65,719
Change in unrecognised deferred tax assets
622,786
632,263
Adjustments in respect of prior years
(97,923)
(20)
Effect of change in corporation tax rate
(20,814)
(151,432)
Group relief
133,218
185,059
Other non-reversing timing differences
71,829
(3,538)
Other permanent differences
-
0
225
Deferred tax adjustments in respect of prior years
-
0
(6,065)
Fixed asset differences
4,638
(159,216)
Deferred tax credited to other comprehensive income
-
0
6,569
Taxation charge for the year
173,132
1,783

In addition to the amount charged to the profit and loss account, the following amounts relating to tax have been recognised directly in other comprehensive income:

2023
2022
£
£
Deferred tax arising on:
Revaluation of property
-
(6,569)

A change in the UK Corporation tax rate to 25% took effect from 1 April 2023. This change has had a consequential effect on the company's tax charge with the standard rate of tax in the current year reflective of a marginal tax rate arising from the company's period straddling the 19% and 25% tax rates. Deferred tax has been calculated at 25%.

EBAC LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 26 -
11
Tangible fixed assets
Leasehold land and buildings
Plant and Machinery
Equipment
Total
£
£
£
£
Cost
At 1 January 2023
237,904
16,115,806
273,772
16,627,482
Additions
-
0
213,405
28,936
242,341
Disposals
-
0
(923,735)
-
0
(923,735)
At 31 December 2023
237,904
15,405,476
302,708
15,946,088
Depreciation and impairment
At 1 January 2023
201,433
12,113,540
175,649
12,490,622
Depreciation charged in the year
11,921
1,181,167
33,969
1,227,057
Eliminated in respect of disposals
-
0
(872,153)
-
0
(872,153)
At 31 December 2023
213,354
12,422,554
209,618
12,845,526
Carrying amount
At 31 December 2023
24,550
2,982,922
93,090
3,100,562
At 31 December 2022
36,471
4,002,266
98,123
4,136,860
12
Fixed asset investments
2023
2022
£
£
Other investments
641,428
641,428
Loans
-
0
148,041
641,428
789,469

Other investments 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.

Movements in fixed asset investments
Loans
Other
Total
£
£
£
Cost or valuation
At 1 January 2023
148,041
641,428
789,469
Repayments
(148,041)
-
(148,041)
At 31 December 2023
-
641,428
641,428
Carrying amount
At 31 December 2023
-
641,428
641,428
At 31 December 2022
148,041
641,428
789,469
EBAC LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 27 -
13
Stocks
2023
2022
£
£
Raw materials and consumables
5,625,155
5,201,978
Finished goods and goods for resale
1,504,662
1,449,952
7,129,817
6,651,930
14
Debtors
2023
2022
Amounts falling due within one year:
£
£
Trade debtors
3,450,310
3,605,764
Corporation tax recoverable
211,574
113,651
Other debtors
691,034
556,486
Prepayments and accrued income
946,835
881,301
5,299,753
5,157,202
Deferred tax asset (note 20)
-
0
271,055
5,299,753
5,428,257
2023
2022
Amounts falling due after more than one year:
£
£
Trade debtors
-
0
165,218
Amounts owed by group undertakings
5,987,416
4,736,996
5,987,416
4,902,214
Total debtors
11,287,169
10,330,471

Included in other debtors is £430,000 (2022: £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

£nil (2022 - £165,218) of trade debtors has been classified as non-current. In the prior year, the debtors due after more than one year related to customers on extended credit terms with a payment plan in place to recover the amounts due.

 

£5,987,416 (2022 - £4,736,996) of amounts owed by group undertakings is classified as non current.

 

 

EBAC LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 28 -
15
Creditors: amounts falling due within one year
2023
2022
Notes
£
£
Obligations under finance leases
18
136,381
-
0
Other borrowings
17
4,449,533
1,833,044
Trade creditors
2,833,236
2,156,673
Amounts owed to group undertakings
9,277,546
8,887,358
Taxation and social security
141,160
641,601
Deferred income
21
19,711
313,875
Other creditors
3,003,559
1,736,873
Accruals
484,939
907,510
20,346,065
16,476,934

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. As at 31 December 2023 a financial liability of £38,942 (2022 - £103,460) has been recognised in other creditors.

 

Other Creditors also includes £2,030,823 (2022 - £998,864) in respect of invoice finance facilities made available to the company. The balance is secured by way of fixed and floating charges over all of the property and undertaking of the company.

 

The company has invoice finance facilities included within other creditors due within one year, with a balance at year end of £2,030,823. During the year the company breached the two financial covenants included within the agreement. The facility required the company to maintain a £800,000 availability in combined cash and unused headroom in the Invoice Finance facility at each month end. The facility also required that the company is monthly EBITDA is within 25% of the budgeted EBITDA submitted to the Invoice Finance provider within an annual budget at the start of the financial year, measured at month end date. The company breached both covenants at multiple month end dates during the year. After the year end the provider acknowledged the breaches and confirmed that there was no financial penalty for the breaches and they had no intention of removing the facility at this time. In February 2025, the terms of the Facility was amended to remove the £800,000 availability covenant but the EBITDA covenant still remains in place.

 

The company was unable to make repayment on the loans due to The Trustees of Ebac Limited Retirement Benefit Scheme and which put the loan into a default position. Under the terms of the loan agreement any default position can trigger full repayment of the loan. The company has not received a formal waiver in relation to the default and therefore the total amount due on this loan of £1,571,905 has been disclosed as due within one year, under the terms of the original loan agreement an amount of £924,297 was reclassified from long term loans to amounts due within one year.

16
Creditors: amounts falling due after more than one year
2023
2022
Notes
£
£
Obligations under finance leases
18
685,997
41,690
Other borrowings
17
2,397,987
4,370,414
Deferred income
21
36,337
199,286
3,120,321
4,611,390
EBAC LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
16
Creditors: amounts falling due after more than one year
(Continued)
- 29 -

Obligations under finance leases are secured over the underlying asset to which the agreement relates.

 

 

17
Loans and overdrafts
2023
2022
£
£
Other borrowings
6,847,520
6,203,458
Payable within one year
4,449,533
1,833,044
Payable after one year
2,397,987
4,370,414
EBAC LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
17
Loans and overdrafts
(Continued)
- 30 -

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 £651,982 (2022 - £611,652).

During 2018 the company also borrowed funds from Cabe Property Limited. The balance outstanding and included in other borrowings at the year end was £2,829,418 (2022 - £2,666,837). 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 2022 the company entered into a loan agreement to borrow £1,500,000 from The Trustees of Ebac Limited Retirement Benefits Scheme. The balance outstanding and included in other borrowings at the year end was £1,571,905 (2022 - £1,537,813). The company pays interest at a rate of 2.75% per annum on the principal amount. The balance is due for repayment in five equal annual instalments.

During 2022 the company entered into a loan agreement to borrow £500,000 from J M Elliott MBE. The balance outstanding and included in other borrowings at the year end was £546,219 (2022 - £512,822). The company pays interest at a rate of 2% per annum on the principal amount. The balance has no set repayment period.

During 2022 the company entered into a loan agreement to borrow £239,996 from J M Elliott MBE. The balance outstanding and included in other borrowings at the year end was £239,996 (2022 - £239,996). The company pays interest at a rate of 0% per annum on the principal amount. The balance is repayable on demand.

During 2022 the company entered into a loan agreement to borrow £140,000 from P Petty. The balance outstanding and included in other borrowings at the year end was £100,000 (2022 - £140,000). The company pays interest at a rate of 0% per annum on the principal amount. The balance is repayable on demand.

During 2022 the company entered into a loan agreement to borrow £80,000 from A Hird. The balance outstanding and included in other borrowings at the year end was £100,000 (2022 - £80,000). The company pays interest at a rate of 0% per annum on the principal amount. The balance is repayable on demand.

During 2022 the company entered into a loan agreement to borrow £43,000 from J C Laverick. The balance outstanding and included in other borrowings at the year end was £43,000 (2022 - £43,000). The company pays interest at a rate of 0% per annum on the principal amount. The balance is repayable on demand.

During 2022 the company entered into a loan agreement to borrow £20,000 from an individual 3rd party. The balance outstanding and included within other borrowings was £15,000 (2022 - £20,000). The company pays interest at a rate of 0% per annum on the principal amount. The balance is repayable on demand.

 

During the year the company entered into a loan agreement to borrow £750,000 from a third-party finance provider. The length of the agreement is 12 months from the commencement of the loan. The balance outstanding and included in other borrowings at the year end was £750,000 (2022 - £nil). The company pays interest at a rate of 1.5% per annum on the principal amount. The loan is disclosed within creditors due within one year.

 

 

18
Finance lease obligations
2023
2022
Future minimum lease payments due under finance leases:
£
£
Within one year
136,381
-
0
In two to five years
685,997
41,690
822,378
41,690
EBAC LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
18
Finance lease obligations
(Continued)
- 31 -

Finance lease payments represent rentals payable by the company for certain items of plant and machinery. Leases include purchase options at the end of the lease period, and no restrictions are placed on the use of the assets. The average lease term is 5 years. All leases are on a fixed repayment basis and no arrangements have been entered into for contingent rental payments.

19
Provisions for liabilities
2023
2022
£
£
Warranty provision
315,615
413,615
Movements on provisions:
Warranty provision
£
At 1 January 2023
413,615
Reversal of provision
(98,000)
At 31 December 2023
315,615

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

20
Deferred taxation

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

Assets
Assets
2023
2022
Balances:
£
£
Accelerated capital allowances
(318,635)
(425,685)
Tax losses
318,635
667,978
Short term timing differences
-
28,762
-
271,055
2023
Movements in the year:
£
Asset at 1 January 2023
(271,055)
Charge to profit or loss
271,055
Liability at 31 December 2023
-
EBAC LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
20
Deferred taxation
(Continued)
- 32 -

A deferred tax asset has not been recognised in respect of tax losses and other short term timing differences of £9,089,540 (2022 - £6,886,944) as it is not probable that they will be recovered against the reversal of deferred tax liabilities or future taxable profits.

21
Deferred income
2023
2022
£
£
Arising from government grants
-
513,161
Other deferred income
56,048
-
56,048
513,161

Deferred income is included in the financial statements as follows:

Current liabilities
19,711
313,875
Non-current liabilities
36,337
199,286
56,048
513,161
22
Retirement benefit schemes
2023
2022
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
155,288
187,042

The company operates a defined contribution pension scheme for all qualifying employees. The assets of the scheme are held separately from those of the company in an independently administered fund. At the reporting date, pension contributions of £23,136 (2022 - £27,654) remained outstanding and are included within creditors falling due within one year.

23
Share capital
2023
2022
2023
2022
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary shares of 1p each
10,059,600
10,059,600
100,596
100,596
24
Reserves
Share premium

The share premium reserve records the amount above the nominal value received for shares issued, less transactions costs.

Other reserve

The other reserve represents an unrealised profit which was created upon the transfer of the commercial division of Ebac Industrial Products Limited.

EBAC LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
24
Reserves
(Continued)
- 33 -
Profit and loss reserves

The profit and loss reserves represents cumulative comprehensive profits and losses net of dividends paid.

25
Financial commitments, guarantees and contingent liabilities

The company is party to a cross-guarantee along with Ebac Industrial Products Limited and Ebac Group Limited relating to certain borrowings held within the group. At the year end the balance due by these entities on cross-guaranteed facilities was £603,695 (2022 - £Nil). The cross-guarantee is backed by fixed and floating charges over the company's assets.

26
Operating lease commitments
Lessee

At the reporting end date the company had outstanding commitments for future minimum lease payments under non-cancellable operating leases, which fall due as follows:

2023
2022
£
£
Within one year
401,576
565,921
Between two and five years
702,758
1,132,158
1,104,334
1,698,079
27
Related party transactions

Ebac Limited is related to the following individuals. J C Laverick (director of Ebac Group Limited, the immediate parent company), J M Elliott MBE (director), Mrs M R Elliott (director of Ebac Group Limited, the immediate parent company), Ms P Petty (close family member to key management personnel) and Ms A Hird (director and company secretary).

Ebac Limited and Cabe Property Limited are under common control due to the directorship of JM Elliott MBE.

 

The company has received a number of loans from related parties. Details of these loans, including amounts advanced from directors, are outlined at Note 17.

At the year end, the balance outstanding to Cabe Property Limited included trade creditors amounting to £8,241 (2022 - £5,353).

 

The individual Trustees of the Ebac Limited Retirement Benefits Scheme are all considered to be related parties to Ebac Limited. During the year the company rented property from the scheme and was charged £388,526 (2022 - £544,361) in rent and the balance owed on the rent at the year end, included within Other Creditors was £463,919 (2022 - £245,604).

28
Ultimate controlling party

The company's immediate parent undertaking is Ebac Group Limited. The ultimate parent undertaking is Ebac Holdings Limited. Both entities are incorporated in England and Wales and have the same registered address of Ketton Way, Aycliffe Industrial Estate, County Durham, DL5 6SR.

 

Ebac Holdings Limited is the smallest and largest group undertaking preparing consolidated financial statements.

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