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Company Registration number: 08558628

Therma-Mech Ltd
Annual Report and Financial Statements
for the Year Ended 30 June 2025

Therma-Mech Ltd

Contents

Company Information | 1
Strategic Report | 2 to 3
Directors' Report | 4
Statement of Directors' Responsibilities | 5
Independent Auditor's Report | 6 to 9
Profit and Loss Account | 10
Statement of Comprehensive Income | 11
Balance Sheet | 12
Statement of Changes in Equity | 13
Notes to the Financial Statements | 14 to 29

Therma-Mech Ltd

Company Information

Directors | A S Ascott P J Lewis R P Smart A J Sargeant C P O'Keeffe A S Woodcock

Company secretary | A J Sargeant

Registered office | Cargo Work Cumberland Road Bristol BS1 6ZU

Auditors | Albert Goodman LLP 5th Floor 25 King Street Bristol BS1 4PB

Therma-Mech Ltd

Strategic Report for the Year Ended 30 June 2025

The directors present their strategic report for the year ended 30 June 2025. ('FY25'). Audited comparatives for the year ended 30 June 2025 (‘FY25’) are also included below.

Principal activity

The principal activity of the Company continues to be its operations in the district energy sector, supplying customers with design and build services in relation to district heating and cooling systems.

Financial overview

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

Financial KPIs | Unit | 2025 | 2024
Turnover | £ | 24,332,858 | 19,854,607
Profit after tax | £ | 3,435,406 | 3,100,377
Shareholders' funds | £ | 4,514,938 | 2,846,109
Average number of employees |  | 35 | 24

Business review
The year to 30 June 2025 presented opportunities for the Company from new and existing customers. This resulted in several new district energy projects being secured during the year.
The business performed strongly in the buried network sector in FY25, supplemented by a number of projects in the residential and commercial sector.
A main priority for the Directors’ continues to be the wellbeing and safety of our workforce, our customers, the communities we trade within and all other Company stakeholders.
During the year the Company successfully retained UKAS accredited certifications for its management systems: Quality (ISO:9001); Environmental (ISO:14001); and Health & Safety (ISO:45001).
Considering the underlying economic uncertainty in the last 12 months, the Directors are satisfied with its performance this financial year and with how it has navigated through the trading environment.

Future developments
The Directors do not anticipate any significant developments for the Company during the coming year. However the business has made the decision to expand into other utilities and has successfully achieved WIRS accreditation in January 2026. It is expected that the Company will continue to operate as a going concern for the foreseeable future.
The Directors remain confident that the Company is well places to take advantage of opportunities as they arise and to continue its profitable growth path.

Therma-Mech Ltd

Strategic Report for the Year Ended 30 June 2025

Principal risks and uncertainties

The Company's operations expose it to a variety of risks in the ordinary course of the business including credit risk and liquidity risk.
The Company reduces its exposure to credit risk by implementing strict credit control procedures and imposition of credit limits on acceptance of new customers. A high proportion of the Company's customers comprise blue chip multinational corporations and government departments with strong credit ratings.
The Company funds its day to day operations from operating cash flow. Intergroup loans are also available if needed from time to time. Liquidity risk is managed through the preparation of detailed cash flow forecasts and the application of strict cash management policies to ensure that the Company maintains sufficient funds for operations.

Approved by the Board on 3 February 2026 and signed on its behalf by:

R P Smart Director |  |

Therma-Mech Ltd

Directors' Report for the Year Ended 30 June 2025

The directors present their report and the financial statements for the year ended 30 June 2025.

Directors of the company

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

A S Ascott

P J Lewis

R P Smart

A J Sargeant - Company secretary and director

C P O'Keeffe

A S Woodcock

Dividends

During the year the company declared and paid a dividend of £1,766,580. Since the year end the company has declared and paid a dividend of £2,000,000.

Going concern

These financial statements have been prepared on a going concern basis. The directors, have considered the financial position of the Company for a period of at least twelve months from the date of signing these financial statements, have no resaon to believe that a material uncertainty exists that may cast doubt about the ability of the Company to continue as a going concern. Accordingly the directors have a reasonable expectation that the company will continue in operational existence and thus they continue to adopt the going concern basis of accounting in preparing the financial statements.

Matters covered in the Strategic Report
The mandatory disclosures in relation to the principal risks and uncertainties and the future development of the Company are considered by the Directors to be of strategic importance. These have therefore been included in the Strategic Report.

Important non adjusting events after the financial period
Since the year end, the 1 Ordinary B £1 share has been sub-divided into 1,000 Ordinary B £0.001 shares. 999 Ordinary B shares £0.001 were then purchased and cancelled by the company at nominal value.

Disclosure of information to the auditors

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

Approved by the Board on 3 February 2026 and signed on its behalf by:

R P Smart Director |  |

Therma-Mech Ltd

Statement of Directors' Responsibilities

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

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

• | select suitable accounting policies and apply them consistently;

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

• | state whether applicable United Kingdom Accounting Standards have been followed, subject to any material departures disclosed and explained in the financial statements; and

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

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

Therma-Mech Ltd

Independent Auditor's Report to the Members of Therma-Mech Ltd

Opinion

We have audited the financial statements of Therma-Mech Ltd (the 'company') for the year ended 30 June 2025, 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 a summary of significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice).

In our opinion the financial statements:

• | give a true and fair view of the state of the company's affairs as at 30 June 2025 and of its profit for the year then ended;
• | have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and
• | have been prepared in accordance with the requirements of the Companies Act 2006.

Basis for opinion

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

Conclusions relating to going concern

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

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

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

Therma-Mech Ltd

Independent Auditor's Report to the Members of Therma-Mech Ltd

Other information

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

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

We have nothing to report in this regard.

Opinion on other matter prescribed by the Companies Act 2006

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

• | the information given in the Strategic Report and Directors' Report for the financial year for which the financial statements are prepared is consistent with the financial statements; and

• | the Strategic Report and Directors' Report have been prepared in accordance with applicable legal requirements.

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

Matters on which we are required to report by exception

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

• | adequate accounting records have not been kept, or returns adequate for our audit have not been received from branches not visited by us; or
• | the financial statements are not in agreement with the accounting records and returns; or
• | certain disclosures of directors' remuneration specified by law are not made; or
• | we have not received all the information and explanations we require for our audit.

Responsibilities of directors

As explained more fully in the Statement of Directors' Responsibilities set out on page 5, 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.

Therma-Mech Ltd

Independent Auditor's Report to the Members of Therma-Mech Ltd

Auditor Responsibilities for the audit of the financial statements

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

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

The extent to which the audit was considered capable of detecting irregularities including fraud

Our approach to identifying and assessing the risks of material misstatement in respect of irregularities, including fraud and non-compliance with laws and regulations, was as follows:

• | the engagement partner ensured that the engagement team collectively had the appropriate competence, capabilities and skills to identify or recognise non-compliance with applicable laws and regulations;
• | we identified the laws and regulations applicable to the Company through discussions with directors and other management, and from our commercial knowledge and experience of the sector;
• | we focused on specific laws and regulations which we considered may have a direct material effect on the financial statements or the operations of the Company, including the Companies Act 2006, taxation legislation and health and safety legislation;
• | we assessed the extent of compliance with the laws and regulations identified above; and
• | identified laws and regulations were communicated within the audit team regularly and the team remained alert to instances of non-compliance throughout the audit.

We assessed the susceptibility of the company’s financial statements to material misstatement, including obtaining an understanding of how fraud might occur, by:

• | making enquiries of management as to where they considered there was susceptibility to fraud, their knowledge of actual, suspected and alleged fraud; and
• | considering the internal controls in place to mitigate risks of fraud and non-compliance with laws and regulations.

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

• | performed analytical procedures to identify any unusual or unexpected relationships;
• | tested journal entries to identify unusual transactions;
• | assessed whether judgements and assumptions made in determining the accounting estimates were indicative of potential bias; and
• | investigated the rationale behind significant or unusual transactions.

In response to the risk of irregularities and non-compliance with laws and regulations, we designed procedures which included, but were not limited to:

Therma-Mech Ltd

Independent Auditor's Report to the Members of Therma-Mech Ltd

• | agreeing financial statement disclosures to underlying supporting documentation; and
• | enquiring of management as to actual and potential litigation and claims.

There are inherent limitations in our audit procedures described above. The more removed that laws and regulations are from financial transactions, the less likely it is that we would become aware of non-compliance. Auditing standards also limit the audit procedures required to identify non-compliance with laws and regulations to enquiry of the directors and other management and the inspection of regulatory and legal correspondence, if any.
Material misstatements that arise due to fraud can be harder to detect than those that arise from error as they may involve deliberate concealment or collusion.

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

Use of our report

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

Christopher Walford Bsc FCA (Senior Statutory Auditor)
For and on behalf of Albert Goodman LLP, Statutory Auditor
5th Floor
25 King Street
Bristol
BS1 4PB

4 February 2026

Therma-Mech Ltd

Profit and Loss Account
for the Year Ended 30 June 2025

| Note | 2025 £ | 2024 £
Turnover | 3 | 24,332,858 | 19,854,607
Cost of sales |  | (17,401,459) | (13,567,298)
Gross profit |  | 6,931,399 | 6,287,309
Administrative expenses |  | (2,604,356) | (2,223,059)
Other operating income | 4 | 187,147 | -
Operating profit | 5 | 4,514,190 | 4,064,250
Other interest receivable and similar income | 6 | 27,297 | 40,021
Interest payable and similar charges | 7 | (24,093) | (27,306)
Profit before tax |  | 4,517,394 | 4,076,965
Taxation | 11 | (1,081,985) | (976,588)
Profit for the financial year |  | 3,435,409 | 3,100,377

The above results were derived from continuing operations.

Therma-Mech Ltd

Statement of Comprehensive Income
for the Year Ended 30 June 2025

| 2025 £ | 2024 £
Profit for the year | 3,435,409 | 3,100,377
Total comprehensive income for the year | 3,435,409 | 3,100,377

Therma-Mech Ltd

(Registration number: 08558628)
Balance Sheet as at 30 June 2025

| Note | 2025 £ | 2024 £
Fixed assets |  |  |
Tangible assets | 12 | 563,942 | 771,730
Current assets |  |  |
Stocks | 13 | 428,033 | 83,175
Debtors | 14 | 7,015,264 | 5,289,956
Cash at bank and in hand |  | 2,592,854 | 1,673,786
|  | 10,036,151 | 7,046,917
Creditors: Amounts falling due within one year | 16 | (5,873,979) | (4,608,856)
Net current assets |  | 4,162,172 | 2,438,061
Total assets less current liabilities |  | 4,726,114 | 3,209,791
Creditors: Amounts falling due after more than one year | 16 | (130,304) | (241,782)
Provisions for liabilities | 17 | (80,872) | (121,900)
Net assets |  | 4,514,938 | 2,846,109
Capital and reserves |  |  |
Called up share capital |  | 2 | 2
Retained earnings |  | 4,514,936 | 2,846,107
Shareholders' funds |  | 4,514,938 | 2,846,109

Approved and authorised by the Board on 3 February 2026 and signed on its behalf by:

R P Smart Director |  |

Therma-Mech Ltd

Statement of Changes in Equity
for the Year Ended 30 June 2025

| Share capital £ | Retained earnings £ | Total £
At 1 July 2024 | 2 | 2,846,107 | 2,846,109
Profit for the year | - | 3,435,409 | 3,435,409
Dividends | - | (1,766,580) | (1,766,580)
At 30 June 2025 | 2 | 4,514,936 | 4,514,938

| Share capital £ | Retained earnings £ | Total £
At 1 July 2023 | 2 | 6,050,098 | 6,050,100
Profit for the year | - | 3,100,377 | 3,100,377
Dividends | - | (6,304,368) | (6,304,368)
At 30 June 2024 | 2 | 2,846,107 | 2,846,109

Therma-Mech Ltd

Notes to the Financial Statements
for the Year Ended 30 June 2025

1 | General information

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

The address of its registered office is:
Cargo Work
Cumberland Road
Bristol
BS1 6ZU

2 | Accounting policies

Summary of significant accounting policies and key accounting estimates

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

Statement of compliance

These financial statements were prepared in accordance with Financial Reporting Standard 102 'The Financial Reporting Standard applicable in the United Kingdom and Republic of Ireland and the Companies Act 2006'.

Basis of preparation

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

These financial statements are presented in Sterling (£).

Summary of disclosure exemptions

The Company has taken advantage of the following disclosure exemptions in preparing these financial statements, as permitted by the FRS 102 "The Financial Reporting Starndard applicable in the UK and Republic of Ireland":
The requirements of Section 7 Statement of Cash Flows;
The requirements of Section 3 Financial Statement Presentation paragraph 3.17(d);
The requirements of Section 11 Financial Instruments paragraphs 11.42, 11.44 to 11.45, 11.47, 11.48(a)(iii), 11.48(a)(iv), 11.48(b) and 11.48(c);
The requirements of Section 12 Other Financial Instruments paragraphs 12.26 to 12.27, 12.29(a), 12.29(b) and 12.29A;
The requirements of Section 33 Related Party Disclosures paragraph 33.7.

Turnover recognition

Turnover is recognised to the extent that is probable that the economic benefits will flow to the Company and the turnover can be reliably measured. Turnover shown in the profit and loss account represents the value of all materials and services provided to clients during the year, exclusive of VAT.
For materials and equipment procured on behalf of clients, revenue is recognised at the point of delivery and acceptance by the client.

Therma-Mech Ltd

Notes to the Financial Statements
for the Year Ended 30 June 2025

Contract revenue recognition

Revenue from district energy and build services is recognised as the service is provided.
A monthly application for works performed is approved by the client and a monthly invoice is raised.
Full provision is made for changes to final project margins on a monthly basis and reviewed in detail at year end.
Revenue is recognised on a gross basis in terms of retention held by clients. Historical recovery of retentions has been excellent.

Tax

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

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

Deferred tax is recognised on timing differences arising between the tax bases of assets and liabilities and their carrying amounts in the financial statements and on unused tax losses or tax credits in the company. Deferred tax is determined using tax rates and laws that have been enacted or substantively enacted by the reporting date.
The carrying amount of deferred tax assets are reviewed at each reporting date and a valuation allowance is set up against deferred tax assets so that the net carrying amount equals the highest amount that is more likely than not to be recovered based on current or future taxable profit.
Deferred tax liabilities are presented within provisions for liabilities on the balance sheet.

Tangible assets

Tangible assets are stated at cost, less accumulated depreciation and accumulated impairment losses.
The cost of tangible assets includes directly attributable incremental costs incurred in their acquisition and installation.

Depreciation

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

Asset class | Depreciation method and rate
Plant and machinery | 5 years straight line
Motor Vehicles | 5 years straight line

Cash and cash equivalents

Cash and cash equivalents comprise cash on hand and call deposits, and other short-term highly liquid investments that are readily convertible to a known amount of cash and are subject to an insignificant risk of change in value.

Therma-Mech Ltd

Notes to the Financial Statements
for the Year Ended 30 June 2025

Debtors

Trade debtors are amounts due from customers for services performed in the ordinary course of business. This includes retentions withheld by customers under agreed terms. The recoverability of retentions is assessed regularly, and any impairment is recognised in the profit and loss account when there is objective evidence that the amounts may not be fully recoverable.
Historically trade debtors impairment has been negligible, and no provisions are required.

Stocks

Stocks are stated at the lower of cost and estimated selling price less costs to complete and sell.
The cost of work in progress comprises direct materials and, where applicable, direct labour costs and those overheads that have been incurred in bringing the inventories to their present location and condition. At each reporting date, stocks are assessed for impairment. If stocks are impaired, the carrying amount is reduced to its selling price less costs to complete and sell; the impairment loss is recognised immediately in profit or loss.

Creditors

Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Trade Creditors are classified as current liabilities if the company does not have an unconditional right, at the end of the reporting period, to defer settlement of the creditor for at least twelve months after the reporting date. If there is an unconditional right to defer settlement for at least twelve months after the reporting date, they are presented as non-current liabilities.
Trade creditors are recognised initially at the transaction price and subsequently measured at amortised cost using the effective interest method.

Borrowings

Interest-bearing borrowings are initially recorded at fair value, net of transaction costs. Interest-bearing borrowings are subsequently carried at amortised cost, with the difference between the proceeds, net of transaction costs, and the amount due on redemption being recognised as a charge to the Profit and Loss Account over the period of the relevant borrowing.
Interest expense is recognised on the basis of the effective interest method and is included in interest payable and similar charges.
Borrowings are classified as current liabilities unless the company has an unconditional right to defer settlement of the liability for at least twelve months after the reporting date.
Assets held under hire purchase agreements are capitalised as tangible fixed assets with the future obligation being recognised as a liability. Finance costs are recognised in the Profit and Loss Account calculated at a constant periodic rate of interest over the term of the liability.

Reserves

Called up share capital represents the nominal value of shares that have been issued.
Profit and loss account includes all current and prior period profits and losses.

Therma-Mech Ltd

Notes to the Financial Statements
for the Year Ended 30 June 2025

Dividends

Dividend distribution to the company’s shareholders is recognised as a liability in the financial statements in the reporting period in which the dividends are declared.

Leases

Leases in which substantially all the risks and rewards of ownership are retained by the lessor are classified as operating leases. Payments made under operating leases are charged to profit or loss on a straight-line basis over the period of the lease. Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessee.
Assets held under finance leases are recognised at the lower of their fair value at inception of the lease and the present value of the minimum lease payments. These assets are depreciated on a straight-line basis over the shorter of the useful life of the asset and the lease term. The corresponding liability to the lessor is included in the Balance Sheet as a finance lease obligation.
Lease payments are apportioned between finance costs in the Profit and Loss Account and reduction of the lease obligation so as to achieve a constant periodic rate of interest on the remaining balance of the liability.

Defined contribution pension obligation

The company operates a defined contribution plan for its employees. A defined contribution plan is a pension plan under which the company pays fixed contributions into a separate entity. Once the contributions have been paid the company has no further payments obligations.
The contributions are recognised as an expense in the profit and loss account when they fall due. Amounts not paid are shown in accruals as a liability in the balance sheet. The assets of the plan are held separately from the company in independently administered funds.

Share capital

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

Therma-Mech Ltd

Notes to the Financial Statements
for the Year Ended 30 June 2025

Financial Instruments
The Company has elected to apply the provisions of Section 11 "Basic Financial Instruments " of FRS102 to all if of its financial instruments.
Financial instruments are recognised in the Company's Statement of Financial Position 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.
Financial assets
Basic financial assets, which include trade and other receivables, cash and bank balances, are initially measured at their transaction price including transaction costs and are subsequently carried at their amortised cost using the effective interest method, less any provision for impairment, unless the arrangement constitutes a financing transaction, where the transaction is measured at the present value of future receipts discounted at a market rate of interest.
Discounting is omitted where the effect of discounting is immaterial. The Company's cash and cash equivalents, trade and most other receivables due with the operating cycle fall into this category of financial instruments.
Impairment of financial assets
Financial assets are assessed for indicators of impairment at each reporting date.
Financial assets are impaired when events, subsequent to their initial recognition, indicate the estimated future cash flows derived from the financial asset(s) have been adversely impacted. The impairment loss will be the difference between the current carrying amount and the present value of future cash flows at the asset(s) original effective interest rate.
If there is a favourable change in relation to the events surrounding the impairment loss then the impairment can be reviewed for possible reversal. The reversal will not cause the current carrying amount to exceed the original carrying amount had the impairment not been recognised. The impairment reversal is recognised in the profit or loss.
Financial liabilities
Financial liabilities and equity instruments are classified according to the substance of the contractual agreements entered into. An equity instruments contract that evidences a residual interest in the assets of the Company after the deduction of its liabilities.
Basic financial liabilities, which include trade and other payables, bank loans and other loans are initially measured at their transaction price after transaction costs. When this constitutes a financing transaction, whereby the debt instrument is measured at the present value of the future receipts discounted at a market rate of interest. Discounting is omitted where the effect of discounting is immaterial.
Debt instruments are subsequently carried at their amortised cost using the effective interest rate method.
Trade payables are obligations to pay for goods and services that have been acquired in the ordinary course of business from suppliers. Trade payables are classified as current liabilities if the payment is due within one year. If not, they represent non-current liabilities. Trade payables are initially recognised at their transaction price and subsequently are measured at amortised cost using the effective interest-method. Discounting is omitted where the effect of discounting is immaterial.
Derecognition of financial assets
Financial assets are derecognised when their contractual right to future cash flow expire, or are settled, or when the Company transfer the asset and substantially all the risks and rewards of the ownership to another party. If significant risks and rewards of ownership are retained after the transfer to another party, then the Company will continue to recognise the value of the portion of the risks and rewards retained.
Derecognition of financial liabilities
Financial liabilities are derecognised when they become legally payable. Interim equity dividends are recognised when paid. Final equity dividends are recognised when approved by the shareholders at an annual general meeting.

Therma-Mech Ltd

Notes to the Financial Statements
for the Year Ended 30 June 2025

Financial Instruments
The Company has elected to apply the provisions of Section 11 "Basic Financial Instruments " of FRS102 to all if of its financial instruments.
Financial instruments are recognised in the Company's Statement of Financial Position 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.
Financial assets
Basic financial assets, which include trade and other receivables, cash and bank balances, are initially measured at their transaction price including transaction costs and are subsequently carried at their amortised cost using the effective interest method, less any provision for impairment, unless the arrangement constitutes a financing transaction, where the transaction is measured at the present value of future receipts discounted at a market rate of interest.
Discounting is omitted where the effect of discounting is immaterial. The Company's cash and cash equivalents, trade and most other receivables due with the operating cycle fall into this category of financial instruments.
Impairment of financial assets
Financial assets are assessed for indicators of impairment at each reporting date.
Financial assets are impaired when events, subsequent to their initial recognition, indicate the estimated future cash flows derived from the financial asset(s) have been adversely impacted. The impairment loss will be the difference between the current carrying amount and the present value of future cash flows at the asset(s) original effective interest rate.
If there is a favourable change in relation to the events surrounding the impairment loss then the impairment can be reviewed for possible reversal. The reversal will not cause the current carrying amount to exceed the original carrying amount had the impairment not been recognised. The impairment reversal is recognised in the profit or loss.
Financial liabilities
Financial liabilities and equity instruments are classified according to the substance of the contractual agreements entered into. An equity instruments contract that evidences a residual interest in the assets of the Company after the deduction of its liabilities.
Basic financial liabilities, which include trade and other payables, bank loans and other loans are initially measured at their transaction price after transaction costs. When this constitutes a financing transaction, whereby the debt instrument is measured at the present value of the future receipts discounted at a market rate of interest. Discounting is omitted where the effect of discounting is immaterial.
Debt instruments are subsequently carried at their amortised cost using the effective interest rate method.
Trade payables are obligations to pay for goods and services that have been acquired in the ordinary course of business from suppliers. Trade payables are classified as current liabilities if the payment is due within one year. If not, they represent non-current liabilities. Trade payables are initially recognised at their transaction price and subsequently are measured at amortised cost using the effective interest-method. Discounting is omitted where the effect of discounting is immaterial.
Derecognition of financial assets
Financial assets are derecognised when their contractual right to future cash flow expire, or are settled, or when the Company transfer the asset and substantially all the risks and rewards of the ownership to another party. If significant risks and rewards of ownership are retained after the transfer to another party, then the Company will continue to recognise the value of the portion of the risks and rewards retained.
Derecognition of financial liabilities
Financial liabilities are derecognised when they become legally payable. Interim equity dividends are recognised when paid. Final equity dividends are recognised when approved by the shareholders at an annual general meeting.

Judgements in applying accounting policies and key sources of estimation uncertainty

In applying the Company's accounting policies, the directors are required to make judgements, estimates and assumptions in determining the carrying amounts of assets and liabilities. The directors' judgements, estimates and assumptions are based on the best and most reliable evidence available at the time when the decisions are made, and are based on historical experience and other factors that are considered to be applicable. Due to the inherent subjectivity involved in making such judgements, estimates and assumptions, the actual results and outcomes may differ. The critical judgements that the directors have made in the process of applying the Company's accounting policies that have the most significant effect on the amounts recognised in the financial statements are discussed below. (i) Assessing indicators of impairment In assessing whether there have been any indicators of impairment of the assets, the directors have considered both external and internal sources of information such as market conditions, counterparty credit ratings and experience of recoverability. There have been no indicators of impairments identified during the current financial year.

Therma-Mech Ltd

Notes to the Financial Statements
for the Year Ended 30 June 2025

Key sources of estimation uncertainty

The key assumptions concerning the future, and other key sources of estimation uncertainty, that have a significant risk of causing material adjustment to the carrying amounts of assets and liabilities within the next financial year are discussed below.
(ii) Recoverability of debtors
The directors establish a provision for debtors that are estimated not to be recoverable. When assessing recoverability the directors consider factors such as the aging of debtors, past experience of recoverability, and the credit profile of individual or groups of customers.
(iii) Revenue recognition
Revenue from district energy and build services is recognised as the service is provided.
A monthly application for works performed is approved by the client and a monthly invoice is raised.
Full provision is made for changes to final project margins on a monthly basis and reviewed in detail at year end.
Revenue is recognised on a gross basis in terms of retention held by clients. Historical recovery of retentions has been excellent.

3 | Turnover

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

| 2025 £ | 2024 £
District heating installation | 24,332,858 | 19,854,607

4 | Other operating income

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

| 2025 £ | 2024 £
R&D expenditure tax credit | 187,147 | -

5 | Operating profit

Arrived at after charging/(crediting)

| 2025 £ | 2024 £
Depreciation expense | 195,198 | 134,453
Operating lease expense - property | 166,712 | 104,454
Operating lease expense - plant and machinery | 3,515 | (4,328)
Loss on disposal of property, plant and equipment | - | 1,185

Therma-Mech Ltd

Notes to the Financial Statements
for the Year Ended 30 June 2025

6 | Other interest receivable and similar income

| 2025 £ | 2024 £
Interest income on bank deposits | 13,186 | 40,021
Other finance income | 14,111 | -
| 27,297 | 40,021

7 | Interest payable and similar expenses

| 2025 £ | 2024 £
Interest on bank borrowings | 12,710 | 17,140
Interest on obligations under finance leases and hire purchase contracts | 11,383 | 10,166
| 24,093 | 27,306

8 | Staff costs

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

| 2025 £ | 2024 £
Wages and salaries | 2,207,717 | 1,918,274
Social security costs | 287,974 | 241,898
Pension costs, defined contribution scheme | 58,205 | 29,627
| 2,553,896 | 2,189,799

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

| 2025 No. | 2024 No.
Operations | 25 | 11
Finance and admin | 10 | 13
| 35 | 24

Therma-Mech Ltd

Notes to the Financial Statements
for the Year Ended 30 June 2025

9 | Directors' remuneration

The directors' remuneration for the year was as follows:

| 2025 £ | 2024 £
Remuneration | 758,633 | 580,939
Contributions paid to money purchase schemes | 23,864 | 7,304
| 782,497 | 588,243

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

| 2025 No. | 2024 No.
Accruing benefits under money purchase pension scheme | 5 | 6

In respect of the highest paid director:

| 2025 £ | 2024 £
Remuneration | 187,247 | 127,160
Company contributions to money purchase pension schemes | 6,011 | 2,326

10 | Auditors' remuneration

| 2025 £ | 2024 £
Audit of the financial statements | 14,750 | 14,050

11 | Taxation

Tax charged/(credited) in the profit and loss account

| 2025 £ | 2024 £
Current taxation |  |
UK corporation tax | 1,199,448 | 925,362
UK corporation tax adjustment to prior periods | (76,435) | (35,574)
| 1,123,013 | 889,788
Deferred taxation |  |
Arising from origination and reversal of timing differences | (41,028) | 86,800
Tax expense in the income statement | 1,081,985 | 976,588

Therma-Mech Ltd

Notes to the Financial Statements
for the Year Ended 30 June 2025

The tax on profit before tax for the year is the same as the standard rate of corporation tax in the UK (2024 - the same as the standard rate of corporation tax in the UK) of 25% (2024 - 25%).
The differences are reconciled below:

| 2025 £ | 2024 £
Profit before tax | 4,517,394 | 4,076,965
Corporation tax at standard rate | 1,129,349 | 1,019,241
Tax increase/(decrease) from effect of capital allowances and depreciation | 291 | (78)
Effect of expense not deductible in determining taxable profit (tax loss) | 28,780 | 30,370
Tax decrease arising from group relief | - | (37,371)
Decrease in UK and foreign current tax from unrecognised temporary difference from a prior period | (76,435) | (35,574)
Total tax charge | 1,081,985 | 976,588

12 | Tangible assets

| Motor vehicles £ | Plant and machinery £ | Total £
Cost or valuation
At 1 July 2024 | 731,043 | 285,490 | 1,016,533
Additions | 998 | 17,414 | 18,412
Disposals | (35,772) | - | (35,772)
At 30 June 2025 | 696,269 | 302,904 | 999,173
Depreciation
At 1 July 2024 | 206,780 | 38,023 | 244,803
Charge for the year | 136,413 | 58,785 | 195,198
Eliminated on disposal | (4,770) | - | (4,770)
At 30 June 2025 | 338,423 | 96,808 | 435,231
Carrying amount
At 30 June 2025 | 357,846 | 206,096 | 563,942
At 30 June 2024 | 524,263 | 247,467 | 771,730

Therma-Mech Ltd

Notes to the Financial Statements
for the Year Ended 30 June 2025

Assets held under finance leases and hire purchase contracts

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

| 2025 £ | 2024 £
Motor vehicles | 116,977 | 161,326

Total depreciation charge for tangible assets in respect of assets held under finance leases and hire purchcase agreements is £44,350 (2024: £44,350).

13 | Stocks

| 2025 £ | 2024 £
Work in progress | 428,033 | 83,175

14 | Debtors

| 2025 £ | 2024 £
Trade debtors | 6,683,690 | 4,796,220
Other debtors | 90,027 | 86,035
Prepayments | 56,276 | 50,132
Accrued income | - | 172,298
Amounts owed by group undertakings | 185,271 | 185,271
| 7,015,264 | 5,289,956

15 | Cash and cash equivalents

| 2025 £ | 2024 £
Cash at bank | 2,592,854 | 1,673,786

Therma-Mech Ltd

Notes to the Financial Statements
for the Year Ended 30 June 2025

16 | Creditors

| Note | 2025 £ | 2024 £
Due within one year |  |  |
Loans and borrowings | 25 | 112,062 | 112,646
Trade creditors |  | 3,099,041 | 2,275,957
Social security and other taxes |  | 511,375 | 50,959
Outstanding defined contribution pension costs |  | 12,621 | 9,160
Other creditors |  | 58,016 | 25,260
Accrued expenses |  | 364,243 | 437,159
Corporation tax | 11 | 505,801 | 467,212
Deferred income |  | 1,210,820 | 1,230,503
|  | 5,873,979 | 4,608,856
Due after one year |  |  |
Loans and borrowings | 25 | 130,304 | 241,782

17 | Provisions for liabilities

| Deferred tax £ | Total £
At 1 July 2024 | 121,900 | 121,900
Increase (decrease) in existing provisions | (41,028) | (41,028)
At 30 June 2025 | 80,872 | 80,872

Deferred tax

Deferred tax assets and liabilities:

2025 | Liability £
Fixed asset timing difference | 82,211
Short term timing difference | (1,339)
| 80,872

2024 | Liability £
Fixed asset timing difference | 122,873
Short term timing difference | (973)
| 121,900

Therma-Mech Ltd

Notes to the Financial Statements
for the Year Ended 30 June 2025

18 | Share capital

Allotted, called up and fully paid shares

| 2025 | 2024
| No. | £ | No. | £
Ordinary shares of £0.001 each | 1,000 | 1 | 1,000 | 1
Ordinary B shares of £1.000 each | 1 | 1 | 1 | 1
Ordinary C shares of £0.001 each | 77 | - | 77 | -
| 1,078 | 2 | 1,078 | 2

Rights, preferences and restrictions

Ordinary shares have the following rights, preferences and restrictions: The ordinary shares have the right to participate in a distribution of profits by way of a dividend declared on that class of share. Each ordinary share holder will be entitled to a vote representing a percentage amount of the Ordinary and Ordinary C shares. The Ordinary and Ordinary C shares are entitled to 95% of the vote in the company. As such each share holder is currently entitled to a proportionate vote of 1/1,077 x 95%. The Ordinary share holders are entitled to a distributions on a sale or winding up on the same proportion basis.
Ordinary B shares have the following rights, preferences and restrictions: Each ordinary B share has a right to participate in a distribution of profits by way of dividend declared on that class of share, is entitled to voting rights equating to 5% and distribution rights on a sale or winding up of 5%.
Ordinary C shares have the following rights, preferences and restrictions: The ordinary C shares have the right to participate in a distribution of profits by way of a dividend declared on that class of share. Each ordinary C share holder will be entitled to a vote representing a percentage amount of the Ordinary and Ordinary C shares. The Ordinary and Ordinary C shares are entitled to 95% of the vote in the company. As such each share holder is currently entitled to a proportionate vote of 1/1,077 x 95%. The Ordinary C share holders are entitled to a distributions on a sale or winding up on the same proportion basis.

19 | Obligations under leases and hire purchase contracts

Finance leases

The total of future minimum lease payments is as follows:

| 2025 £ | 2024 £
Not later than one year | 12,062 | 12,646
Later than one year and not later than five years | 113,637 | 125,115
| 125,699 | 137,761

Therma-Mech Ltd

Notes to the Financial Statements
for the Year Ended 30 June 2025

Operating leases

The total of future minimum lease payments is as follows:

| 2025 £ | 2024 £
Not later than one year | 69,099 | 53,550
Later than one year and not later than five years | 174,052 | 243,150
| 243,151 | 296,700

The amount of non-cancellable operating lease payments recognised as an expense during the year was £53,550 (2024 - £8,332).

20 | Dividends

Interim dividends paid

|  | 2025 £ |  | 2024 £
Interim dividend of £1,600 (2024 - £6,172) per each Ordinary shares |  | 1,600,000 |  | 6,172,436
Interim dividend of £166,580 (2024 - £131,932) per each Ordinary B shares |  | 166,580 |  | 131,932
|  | 1,766,580 |  | 6,304,368

21 | Related party transactions

Transactions with directors

2025 | At 1 July 2024 £ | Advances to director £ | At 30 June 2025 £
R P Smart
Directors loan - interest free | 19,001 | 13,859 | 32,860
A S Ascott
Directors loan - interest free | 23,325 | 8,859 | 32,184

Therma-Mech Ltd

Notes to the Financial Statements
for the Year Ended 30 June 2025

2024 | At 1 July 2023 £ | Advances to director £ | At 30 June 2024 £
R P Smart
Directors loan - interest free | 19,001 | - | 19,001
A S Ascott
Directors loan - interest free | 14,325 | 9,000 | 23,325

Other transactions with directors

Dividends of £166,580 was paid on Ordinary B Shares during the year (2024: £131,932) to a director of the company.

Summary of transactions with parent

The company has a loan account with its parent company, Therma-Mech Developments Limited. At the year end the amount owed by the parent company was £185,271 (2024: £185,271). The loan is repayable on demand and is interest free.
During the year the company paid rent of £51,000 (2024: £42,000) to its parent company.

22 | Parent and ultimate parent undertaking

The company's immediate parent is Therma-Mech Developments Limited, incorporated in England. Its registered office is Cargo Work Office, Cumberland Road, Bristol, BS1 6ZU.
The parent undertaking of the smallest and largest Group, which includes the Company and for which Group accounts are prepared, is Therma-Mech Developments Limited, a company incorporated in the United Kingdom. Copies of the group financial statements of Therma-Mech Developments Limited are available from Companies House.

23 | Non adjusting events after the financial period

Since the year end the company has declared and paid a dividend of £2,000,000 to the Ordinary Shareholders.
In addition, the 1 Ordinary B £1 share has been sub-dividend into 1,000 Ordinary B £0.001 shares. 999 Ordinary B shares £0.001 were then purchased and cancelled by the company at nominal value.

Therma-Mech Ltd

Notes to the Financial Statements
for the Year Ended 30 June 2025

24 | Pension and other schemes

Defined contribution pension scheme

The company operates a defined contribution pension scheme. The pension cost charge for the year represents contributions payable by the company to the scheme and amounted to £58,205 (2024 - £29,627).
Contributions totalling £12,621 (2024 - £9,160) were payable to the scheme at the end of the year and are included in creditors.

25 | Loans and borrowings

Current loans and borrowings

| 2025 £ | 2024 £
Bank borrowings | 100,000 | 100,000
Hire purchase contracts | 12,062 | 12,646
| 112,062 | 112,646

Non-current loans and borrowings

| 2025 £ | 2024 £
Bank borrowings | 16,667 | 116,667
Hire purchase contracts | 113,637 | 125,115
| 130,304 | 241,782

The bank loan relates to a CBIL loan, which is secured by way of a debenture over the assets of the company, bearing interest at the base interest rate of 2.42% per annum and repayable by 18 August 2026. The carrying value of the loan as at 30 June 2025 is £116,667 (2024: £216,667).
Hire purchase liabilities with a carrying amount of £125,699 (2024: £137,761) is denominated in sterling with a nominal interest rate of 6.5% to 8.5%. The final instalment is due on 25 April 2027.
Hire purchase liabilities are secured on the vehicles they are financing and are repayable in monthly instalments over 2 to 5 years from the date of advanced.