The directors present the strategic report for the year ended 31 December 2024.

2024 was another challenging year, however the business made the decision at the end of 2024 to close one of its production lines producing loss making products. This has resulted in the write down of fixed assets (£1,038,363) and stock (£814,898) giving additional provisioning totalling £1.8m (closure costs) which were charged in the year. This will mean that future years are more profitable, and we expect only a small loss in 2025. In addition, cash flows will be enhanced in 2025 and beyond. We are pleased to note that no further cash had to be injected into the business in 2025 by the shareholders and the business at the time of writing has adequate cash headroom.

Sales were 10% down on 2023 representing a temporary lower demand for water coolers, 2025 sales returned to 2023 levels.

Gross profit % after the removal of closure costs was slightly down on 2023 due to sales mix.

Operating loss before closure costs was £700k worse than 2023 represented by lower sales volumes and slightly lower GP%.

The directors are now convinced that the business is in a much stronger position post reorganisation, and are now in a position to concentrate on rebuilding the business.

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 continues 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.

During 2025 relationships have been built with distributors of the new heat pump products and the loft mounted dehumidifiers. In addition, a new range of dehumidifiers were launched in 2025. The directors expect much stronger trading figures in 2026 and beyond.

During 2025 a new management team was recruited including, Chief Financial Officer. The directors believe that these new positions will have a significantly favourable impact upon future revenues and profitability.

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

On behalf of the board

The directors present their annual report and financial statements for the year ended 31 December 2024.

The company's accounting reference date is 29 December 2024 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 2024.

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

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.

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

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.

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.

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 £4,895,682 for the year, has net current liabilities of £4,204,600 and net liabilities of £6,321,828 as at 31 December 2024.

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

During the year the company was in breach of covenants in its invoice finance agreement. The company obtained confirmation from the invoice finance provider in December 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 invoice finance provider has also confirmed that no further breaches have been recorded in 2025 and they still have no intention of removing the invoice finance facility at this moment and the facility continues to operate as normal.

The company has been 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 £1,605,346 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 for the company, 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 directors monitor actual performance against budgeted performance on a regular basis against available cash flows. Post year end management accounts show improved trading performance. Cashflow has been much improved and the company is trading with a positive EBITDA. The company is still trading at an overall loss position but it is much improved on the 2024 year.

The directors believe the company has sufficient financial resources to meet their obligations as they fall due for a period of at least 12 months from the date of approval 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 related parties that loans totalling £14,466,365 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 uncertainty outlined above regarding the 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.

The auditor, Johnston Carmichael LLP, is deemed to be reappointed under section 487(2) of the Companies Act 2006.

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.

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.

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:

• select suitable accounting policies and then apply them consistently;

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

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

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

We have audited the financial statements of Ebac Limited (‘the company’) for the year ended 31 December 2024, 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:

• Give a true and fair view of the state of the company's affairs as at 31 December 2024 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.

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 £4,895,682 during the year ended 31 December 2024 and, as of that date, the company’s current liabilities exceeded its current assets by £4,204,600. 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.

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 and financial statements other than the financial statements and our auditor’s report thereon. The directors are responsible for the other information contained within the annual report and financial statements. 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.

Opinions on other matters prescribed by the Companies Act 2006

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

• The information given in the strategic report and the directors’ report for the financial year for which the financial statements are prepared is consistent with the financial statements; and

• The strategic report and the directors’ report have been prepared in accordance with applicable legal requirements.

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

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

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

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

• Certain disclosures of directors’ remuneration specified by law are not made; or

• We have not received all the information and explanations we require for our audit

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.

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:

• Companies Act 2006;

• UK Corporate Tax Legislation;

• VAT legislation; and

• UK Generally Accepted Accounting Practice.

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 our review of submitted returns, external inspections, relevant correspondence with 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:

• Management override of controls

• Revenue recognition

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:

• Reviewing the level of and reasoning behind the company’s procurement of legal and professional services;

• Performing audit procedures over the risk of management override of controls, including testing of journal entries and other adjustments for appropriateness, evaluating the business rationale of significant transactions outside the normal course of business and assessing judgements made by management in their calculation of accounting estimates for potential management bias;

• Performing audit work procedures over the occurrence and cut-off of revenue including agreeing a sample of recorded sales to invoice and cash remittances and testing a sample of recorded items either side of year-end to sales invoices and delivery notes;

• Completion of appropriate checklists and use of our experience to assess the company’s compliance with the Companies Act 2006; and

• Agreement of the financial statement disclosures to supporting documentation.

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.

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

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.

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):

• Section 7 ‘Statement of Cash Flows’: Presentation of a statement of cash flow and related notes and disclosures;

• Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instrument Issues: Interest income/expense and net gains/losses for financial instruments not measured at fair value; basis of determining fair values; details of collateral, loan defaults or breaches, details of hedges, hedging fair value changes recognised in profit or loss and in other comprehensive income;

• Section 26 ‘Share based Payment’: Share-based payment expense charged to profit or loss, reconciliation of opening and closing number and weighted average exercise price of share options, how the fair value of options granted was measured, measurement and carrying amount of liabilities for cash-settled share-based payments, explanation of modifications to arrangements;

• Section 33 ‘Related Party Disclosures’: Compensation for key management personnel.

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, United Kingdom, DL5 6SR.

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 £4,895,682 for the year, has net current liabilities of £4,204,600 and net liabilities of £6,321,828 as at 31 December 2024.

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

During the year the company was in breach of covenants in its invoice finance agreement. The company obtained confirmation from the invoice finance provider in December 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 invoice finance provider has also confirmed that no further breaches have been recorded in 2025 and they still have no intention of removing the invoice finance facility at this moment and the facility continues to operate as normal.

The company has been 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 £1,605,346 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 for the company, 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 directors monitor actual performance against budgeted performance on a regular basis against available cash flows. Post year end management accounts show improved trading performance. Cashflow has been much improved and the company is trading with a positive EBITDA. The company is still trading at an overall loss position but it is much improved on the 2024 year.

The directors believe the company has sufficient financial resources to meet their obligations as they fall due for a period of at least 12 months from the date of approval 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 related parties that loans totalling £14,466,365 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 uncertainty outlined above regarding the 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.

Turnover relates to the developing, manufacturing and selling of 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.

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

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:

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.

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.

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.

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.

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.

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.

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, 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 represent forward currency contracts and 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. Where the carrying value of forward currency contracts is negative these amounts are shown as other financial liabilities.

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.

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.

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, 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.

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

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.

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

The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the profit and loss account because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The 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 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.

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.

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

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

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

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

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 asset's 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 leased asset are consumed.

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

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.

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

The 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 £1,959,637 (2023 - £787,381) at the reporting end date.

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 £728,015 (2023 - £726,399) at the reporting end date.

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.

The audit fee for the current year includes £21,250 (2023 - £21,250) in respect of other group companies within the Ebac Holdings Limited Group where the fees are not recharged to those entities.

In addition to the above, the company had net stock impairment losses recognised of £1,172,256 (2023 - net stock impairment losses reversed of £14,769). Stock impairment losses recognised and reversed are included within the company's reported cost of sales.

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

Their aggregate remuneration comprised:

The number of directors for whom retirement benefits are accruing under defined contribution schemes amounted to 1 (2023 - 1).

The actual (credit)/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:

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 in the prior year with the standard rate of tax in that 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%.

The net carrying value of tangible fixed assets includes the following in respect of assets held under finance leases or hire purchase contracts.

Included within plant and machinery depreciation charge for the year, is an impairment charge of £1,038,363 (2023 £nil) in relation to its washing machine production line to reflect the reduction in manufacturing post year end.

Other investments represent 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.

Included in other debtors is £430,000 (2023 - £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

£6,296,226 (2023 - £5,987,416) of amounts owed by group undertakings is classified as non current.

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 2024, a financial liability of £38,942 (2023 - £38,942) has been recognised in other creditors.

Other creditors includes £1,904,023 (2023 - £2,030,823) 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. 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's 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 included in other borrowings of £1,605,346 (2023 - £1,571,905) has been disclosed as due within one year.

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

During 2018 the company entered into a loan agreement to borrow £970,000 from J M Elliott MBE DL 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 £694,805 (2023 - £651,982).

During 2018 the company also borrowed funds from Cabe Property Limited. The balance outstanding and included in other borrowings at the year end was £3,000,718 (2023 - £2,829,418). 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 £1,605,346 (2023 - £1,571,905). 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 DL. The balance outstanding and included in other borrowings at the year end was £581,759 (2023 - £546,219). 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 DL. The balance outstanding and included in other borrowings at the year end was £239,996 (2023 - £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 £90,000 (2023 - £100,000). The company pays interest at a rate of 0% per annum on the principal amount. The balance is repayable on demand.

During 2024 the company entered into a loan agreement to borrow £185,000 from P Petty. The balance outstanding and included in other borrowings at the year end was £185,000 (2023 - £nil). 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. During FY23 £20,000 was transferred between A Hird and P Petty, increasing A Hird loan to £100,000. The balance outstanding and included in other borrowings at the year end was £100,000 (2023 - £100,000). The company pays interest at a rate of 0% per annum on the principal amount. The balance is repayable on demand.

During 2024 the company entered into a loan agreement to borrow £200,000 from A Hird. The balance outstanding and included in other borrowings at the year end was £200,000 (2023 - £nil). 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 (2023 - £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 (2023 - £15,000). The company pays interest at a rate of 0% per annum on the principal amount. The balance is repayable on demand.

During 2023 the company entered into a loan agreement to borrow £750,000 from TFG Capital Limited. The balance outstanding and included in other borrowings at the year end was £750,000 (2023 - £750,000). The company pays interest at a rate of 1.5% per annum on the principal amount. During the year an extension was made to the repayment period and the loan is now due for repayment in June 2026, repayments have been made against the loan balance post year end.

During 2024 the company entered into a loan agreement to borrow £196,000 from PayPal. In addition to this was a fixed fee of £11,861. Total repayable was £207,891. The balance outstanding and included within other borrowings was £181,703. The company pays interest at a rate of 0% per annum on the principal amount. The balance is repayable by deduction from future sales.

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.

The warranty provision represents an estimate of the cost of settling warranty claims during the warranty period. Due to the nature of warranty claims, there is some uncertainty over the timing of expected outflows.

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

A deferred tax asset has not been recognised in respect of tax losses and other short term timing differences of £13.1m (2023 - £9.1m) as it is not probable that they will be recovered against the reversal of deferred tax liabilities or future taxable profits.

Deferred income is included in the financial statements as follows:

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 £22,174 (2023 - £23,136) remained outstanding and are included within creditors falling due within one year.

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

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

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

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 £Nil (2023 - £603,695). The cross-guarantee is backed by fixed and floating charges over the company's assets.

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:

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

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

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 in trade creditors amounted to £9,431 (2023 - £8,241).

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 £401,576 (2023 - £401,576) in rent and the balance owed on the rent at the year end, included within Other Creditors, was £785,926 (2023 - £463,919).

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.