ACCOUNTS - Final Accounts preparation

Operating loss

The operating loss is stated after charging:

Registered number: 01275439

SEARS MANUFACTURING CO. (EUROPE) LIMITED

ANNUAL REPORT AND FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2025

SEARS MANUFACTURING CO. (EUROPE) LIMITED

COMPANY INFORMATION

Directors	J Sears
	K Wichelt


Company secretary	D H Davies


Registered number	01275439


Registered office	Unit 42 Rassau Industrial Estate
	Rassau
	Ebbw Vale
	Gwent
	NP23 5SD


Independent auditor	MHA
	MHA House
	Charter Court
	Swansea Enterprise Park
	Swansea
	SA7 9FS

SEARS MANUFACTURING CO. (EUROPE) LIMITED

CONTENTS

	Page
Strategic report	1 - 2
Directors' report	3 - 4
Independent auditor's report	5 - 8
Statement of comprehensive income	9
Balance sheet	10
Statement of changes in equity	11
Statement of cash flows	12
Notes to the financial statements	13 - 27

SEARS MANUFACTURING CO. (EUROPE) LIMITED

STRATEGIC REPORT

FOR THE YEAR ENDED 31 DECEMBER 2025

The directors present their strategic report for the year ended 31 December 2025.

Business review

The strategy of the business is to increase its share of the specialist seating market through increasing sales to new and existing customers built on the following qualities: integrity, innovation, performance, durability, comfort, quality and service.

The group enjoys a number of competitive advantages including strong brand recognition; a well established reputation for price competitiveness; a knowledgeable and enthusiastic workforce and a strong customer focus throughout the business.

The underlying trading performance of the business increased in 2025 relative to 2024. The significant reason for the increase in trading performance was due to cost reduction activities and profitable new business programs.

Whilst trading conditions are expected to remain challenging throughout 2026, the board considers the group to be well positioned to manage and take on this challenge.

KPI's - Year ended 31 December 2025 31 December 2024
Turnover £20,954k £21,118k
Gross margin £2,996k £2,861k
Gross margin % 14.3% 13.5%
Operating (loss)/profit (£153k) (£427k)
Cash at bank and in hand (£1,926k) (£2,311k)

Page 1

SEARS MANUFACTURING CO. (EUROPE) LIMITED

STRATEGIC REPORT (CONTINUED)

FOR THE YEAR ENDED 31 DECEMBER 2025

Principal risks and uncertainties

The management of the business and the execution of the company's strategy are subject to a number of risks. The key business risks can be summarised as follows:

Competition from competitiors
Potential impact: the last few years have seen many manufacturing businesses suffer from uncertain demand.
Mitigation: The business continues to grow its market share. It has achieved this by building customer awareness of its offering and investing in product development.

People
Potential impact: The business could be impacted by the loss of key individuals.
Mitigation: The business looks to increase staff engagement through (1) regular opportunities to give feedback and to influence future business developments and (2) training and progression opportunities.

Price risk
The company is exposed to commodity price risk as a result of its operations. However, given the size of the company's operations, the cost of managing exposure to commodity price risk exceeds any potential benefit. The directors will revisit the appropriateness of this policy should the company's operations change in size or nature.

Credit risk
The company's financial assets are cash and trade debtors. The company's credit risk is primarily attributable to its trade debtors which are presented in the balance sheet net of allowances for doubtful debts. The company has implemented policies that require appropriate credit checks on potential customers before sales are made.

Liquidity risk
The company actively maintains a mixture of long term and short term debt finance that is designed to ensure that the company has sufficient funds for operations and planned expansions.

Interest rate cash flow risk
The company has both interest bearing assets and interest bearing liabilities. Interest bearing assets comprise only cash balances, which earn interest at floating rates. The company has a policy of maintaining debt at floating rates. The directors will revisit the appropriateness of this policy should the company's operations change in size or nature.

Foreign exchange risk
The company mitigates the foreign exchange risk by monitoring the variability of exchange rates and negotiating contracts with customers to accommodate exchange rate fluctuations.

Geopolitical risk
The company actively monitors changes in the geopolitical landscape that can impact our supply chain or total costs for our customers. Current US tariffs on imports from the UK have minimal administrative impact, reporting on steel source, and on Sears Europe, as our products fall outside the scope of current tariffs. Expanded US import tariffs will have minimal impact as less than 5% of our turnover is represented by shipments to the United States.

This report was approved by the board on 8 May 2026 and signed on its behalf.

K Wichelt

Director

Page 2

SEARS MANUFACTURING CO. (EUROPE) LIMITED

DIRECTORS' REPORT

FOR THE YEAR ENDED 31 DECEMBER 2025

The directors present their report and the financial statements for the year ended 31 December 2025.

Directors' responsibilities statement

The directors are responsible for preparing the Strategic report, the 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 applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice), including Financial Reporting Standard 102 ‘The Financial Reporting Standard applicable in the UK and Republic of Ireland'. 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 for the Company's financial statements and then apply them consistently;

∙make judgments 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 to 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.

Principal activity

The principal activity of the company in the year under review was that of the manufacture and supply of specialist seating for the agriculture, construction and industrial vehicle industries.

Results and dividends

The loss for the year, after taxation, amounted to £397,796 (2024 - loss £730,828).

No dividends will be distributed for the year ended 31 December 2025 (2024: £0).

Going concern

The directors believe that preparing the financial statements on the going concern basis is appropriate due to the continued support of the ultimate parent company, Sears Manufacturing Inc. The directors have received confirmation that Sears Manufacturing Inc intends to support the company for a period of at least one year after these financial statements have been signed.

Directors

The directors who served during the year were:

J Sears

K Wichelt

Page 3

SEARS MANUFACTURING CO. (EUROPE) LIMITED

DIRECTORS' REPORT (CONTINUED)

FOR THE YEAR ENDED 31 DECEMBER 2025

Matters covered in the Strategic report

Included in the company's strategic report is a review of the business and a description of the principal risks and uncertainties facing the company.

Disclosure of information to auditor

Each of the persons who are directors at the time when this Directors' report is approved has confirmed that:

∙so far as the director is aware, there is no relevant audit information of which the Company's auditor is unaware, and

∙the director has taken all the steps that ought to have been taken as a director in order to be aware of any relevant audit information and to establish that the Company's auditor is aware of that information.

Auditors

The auditors, MHA Audit Services LLP, will be proposed for reappointment in accordance with section 485 of the
Companies Act 2006.

This report was approved by the board on 8 May 2026 and signed on its behalf.

K Wichelt

Director

Page 4

SEARS MANUFACTURING CO. (EUROPE) LIMITED

INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF SEARS MANUFACTURING CO. (EUROPE) LIMITED

Opinion

We have audited the financial statements of Sears Manufacturing Co. (Europe) Limited (the 'Company') for the year ended 31 December 2025, which comprise the Statement of comprehensive income, the Balance sheet, the Statement of cash flows, the Statement of changes in equity and the related notes, 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 31 December 2025 and of its loss for the year then ended;

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

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

Basis for opinion

We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditor's 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 United Kingdom, including the Financial Reporting Council'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 directors' use of the going concern basis of accounting in the preparation of the financial statements is appropriate.

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

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

Page 5

SEARS MANUFACTURING CO. (EUROPE) LIMITED

INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF SEARS MANUFACTURING CO. (EUROPE) LIMITED (CONTINUED)

Other information

The other information comprises the information included in the Annual Report other than the financial statements and our Auditor's report thereon. The directors are responsible for the other information contained within the Annual Report. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the course of the audit, or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.

We have nothing to report in this regard.

Opinion on other matters prescribed by the Companies Act 2006

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

∙the information given in the Strategic report and the 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.

Matters on which we are required to report by exception

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

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

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

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

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

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

Responsibilities of directors

As explained more fully in the Directors' responsibilities statement set out on page 3, 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.

Page 6

SEARS MANUFACTURING CO. (EUROPE) LIMITED

INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF SEARS MANUFACTURING CO. (EUROPE) LIMITED (CONTINUED)

Auditor's 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:

- Enquiry of management and those charged with governance around actual, potential or suspected litigation, claims, non-compliance with applicable laws and regulations and fraud.
- Review of legal and professional fees for evidence of legal work undertaken or fines/penalties incurred.
- Enquiry of entity staff in compliance functions and external advisors to identify any instances of non-compliance with laws and regulations.
- Reviewing of financial statements disclosures and rtesting to supporting documentation to assess compliance wirth applicable laws and regulations.
- Performing audit work over the risk of management override, including testing of journal entries and other adjustments for appropriateness.
- Evaluating the business rationale of significant transactions outside the normal course of business.
- An assessment of the methodologies used in order to calculate estimatse/provisions at the year end for evidence of bias.
- We considered where applicable alternative estimation approaches including using (where available) actual post year end outcomes in order to provide assurance over the potential for material misstatement.
- Discussions amongst the engagement team in relation to how and where fraud might occur in the financial statements and any potential indicators of fraud;
- Discussions with management over any potential or suspected fraud.

Because of the inherent limitations of an audit, there is a risk that we will not detect all irregularities, including those leading to a material misstatement in the financial statements or non-compliance with regulation. This risk increases the more that compliance with a law or regulation is removed from the events and transactions reflected in the financial statements, as we will be less likely to become aware of instances of non-compliance. The risk is also greater regarding irregularities occurring due to fraud rather than error, as fraud involves intentional concealment, forgery, collusion, omission or misrepresentation.

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.

Page 7

SEARS MANUFACTURING CO. (EUROPE) LIMITED

INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF SEARS MANUFACTURING CO. (EUROPE) LIMITED (CONTINUED)

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.

Brian Garland BA ACA (Senior statutory auditor)

for and on behalf of

MHA

Statutory Auditor

Swansea, United Kingdom

8 May 2026

MHA is the trading name of MHA Audit Services LLP, a limited liability partnership registered in England and Wales (registration number OC455542).

Page 8

SEARS MANUFACTURING CO. (EUROPE) LIMITED

STATEMENT OF COMPREHENSIVE INCOME

FOR THE YEAR ENDED 31 DECEMBER 2025

	2025	2024
Note	£	£


Turnover	4	20,954,041	21,118,314
Cost of sales		(17,958,267)	(18,257,089)
Gross profit		2,995,774	2,861,225
Distribution costs		(1,254,115)	(1,484,340)
Administrative expenses		(1,894,259)	(1,848,979)
Operating loss	5	(152,600)	(472,094)
Interest receivable and similar income	7	3,025	5,716
Interest payable and similar expenses	8	(248,221)	(264,450)
Loss before tax		(397,796)	(730,828)
Loss for the financial year		(397,796)	(730,828)

Other comprehensive income for the year
Total comprehensive income for the year		(397,796)	(730,828)

The notes on pages 13 to 27 form part of these financial statements.

Page 9

SEARS MANUFACTURING CO. (EUROPE) LIMITED

REGISTERED NUMBER: 01275439

BALANCE SHEET

AS AT 31 DECEMBER 2025

		2025		2024
Note		£		£

Fixed assets
Tangible assets	10		913,754		907,163
			913,754		907,163
Current assets
Stocks	11	6,216,311		6,517,788
Debtors: amounts falling due within one year	12	3,062,410		2,436,687
Cash at bank and in hand	13	70,522		127,143
		9,349,243		9,081,618
Creditors: amounts falling due within one year	14	(9,584,737)		(8,936,012)
Net current (liabilities)/assets			(235,494)		145,606
Total assets less current liabilities			678,260		1,052,769
Creditors: amounts falling due after more than one year	15		(3,312,897)		(3,239,997)
Provisions for liabilities
Other provisions	17	(306,360)		(355,973)
			(306,360)		(355,973)
Net liabilities			(2,940,997)		(2,543,201)

Capital and reserves
Called up share capital	18	1,000,000	1,000,000
Share premium account		1,433,800	1,433,800
Profit and loss account		(5,374,797)	(4,977,001)
		(2,940,997)	(2,543,201)

The financial statements were approved and authorised for issue by the board and were signed on its behalf on 8 May 2026.

K Wichelt

Director

The notes on pages 13 to 27 form part of these financial statements.

Page 10

SEARS MANUFACTURING CO. (EUROPE) LIMITED

STATEMENT OF CHANGES IN EQUITY

FOR THE YEAR ENDED 31 DECEMBER 2025

	Called up share capital	Share premium account	Profit and loss account	Total equity
	£	£	£	£
At 1 January 2024	1,000,000	1,433,800	(4,246,173)	(1,812,373)
Comprehensive income for the year
Loss for the year	-	-	(730,828)	(730,828)

At 1 January 2025	1,000,000	1,433,800	(4,977,001)	(2,543,201)
Comprehensive income for the year
Loss for the year	-	-	(397,796)	(397,796)
At 31 December 2025	1,000,000	1,433,800	(5,374,797)	(2,940,997)

The notes on pages 13 to 27 form part of these financial statements.

Page 11

SEARS MANUFACTURING CO. (EUROPE) LIMITED

STATEMENT OF CASH FLOWS

FOR THE YEAR ENDED 31 DECEMBER 2025

			2025	2024
			£	£

Cash flows from operating activities
Loss for the financial year	(397,796)	(730,828)
Adjustments for:
Depreciation of tangible assets	189,003	178,313
Loss on disposal of tangible assets	40,051	-
Interest paid	248,221	264,450
Interest received	(3,025)	(5,716)
Decrease/(increase) in stocks	301,477	(143,762)
(Increase)/decrease in debtors	(625,723)	2,230,779
Increase/(decrease) in creditors	1,163,310	(1,203,050)
(Decrease)/increase in provisions	(49,614)	54,356
Net cash generated from operating activities	865,904	644,542

Cash flows from investing activities
Purchase of tangible fixed assets	(235,645)	(384,206)
Interest received	3,025	5,716
Net cash from investing activities	(232,620)	(378,490)
Cash flows from financing activities
Interest paid	(248,221)	(264,450)
Net cash used in financing activities	(248,221)	(264,450)
Net increase in cash and cash equivalents	385,063	1,602
Cash and cash equivalents at beginning of year	(2,311,027)	(2,312,629)
Cash and cash equivalents at the end of year	(1,925,964)	(2,311,027)

Cash and cash equivalents at the end of year comprise:
Cash at bank and in hand	70,522	127,143
Bank overdrafts	(1,996,486)	(2,438,170)
	(1,925,964)	(2,311,027)

The notes on pages 13 to 27 form part of these financial statements.

Page 12

SEARS MANUFACTURING CO. (EUROPE) LIMITED

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2025

1.	General information

Sears Manufacturing Co. (Europe) Limited is a private company, limited by shares, registered in England and Wales. The company's registered number is 01275439 and registered office address is Unit 42 Rassau Industrial Estate, Rassau, Ebbw Vale, Gwent, NP23 5SD.

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

Monetary amounts in these financial statements are rounded to the nearest £.

2.Accounting policies

2.1

Basis of preparation of financial statements

The financial statements have been prepared under the historical cost convention unless otherwise specified within these accounting policies and in accordance with Financial Reporting Standard 102, the Financial Reporting Standard applicable in the UK and the Republic of Ireland and the Companies Act 2006.

The preparation of financial statements in compliance with FRS 102 requires the use of certain critical accounting estimates. It also requires management to exercise judgment in applying the Company's accounting policies (see note 3).

The following principal accounting policies have been applied:

2.2

Going concern

The directors believe that preparing the financial statements on the going concern basis is appropriate due to the continued support of the ultimate parent company, Sears Manufacturing Inc. The directors have received confirmation that Sears Manufacturing Inc intends to support the company for a period of at least one year after these financial statements have been signed.

2.3

Related party exemption

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

2.4

Foreign currency translation

Functional and presentation currency

The Company's functional and presentational currency is GBP.

Transactions and balances

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.

Page 13

SEARS MANUFACTURING CO. (EUROPE) LIMITED

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2025

2.Accounting policies (continued)

2.5

Revenue recognition

Revenue from the sale of goods 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.

Revenue represents the invoiced value of goods supllied net of VAT and trade discounts.

2.6

Hire purchase and leasing commitments

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

2.7

Research and development

Research expenditure is written off against profits in the year in which it is incurred. Identifiable development expenditure is capitalised to the extent that the technical, commercial and financial feasibility can be demonstrated.

2.8

Interest income

Interest income is recognised in profit or loss using the effective interest method.

2.9

Finance costs

Finance costs are charged to profit or loss over the term of the debt using the effective interest method so that the amount charged is at a constant rate on the carrying amount. Issue costs are initially recognised as a reduction in the proceeds of the associated capital instrument.

2.10

Borrowing costs

All borrowing costs are recognised in profit or loss in the year in which they are incurred.

2.11

Pensions

Defined contribution pension plan

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 payment obligations.

The contributions are recognised as an expense in profit or loss 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.

Page 14

SEARS MANUFACTURING CO. (EUROPE) LIMITED

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2025

2.Accounting policies (continued)

2.12

Taxation

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

Current or deferred taxation assets and liabilities are not discounted.

Current tax

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

Deferred tax

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

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

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

2.13

Tangible fixed assets

Tangible fixed assets under the cost model are stated at historical cost less accumulated depreciation and any accumulated impairment losses. Historical cost includes expenditure that is directly attributable to bringing the asset to the location and condition necessary for it to be capable of operating in the manner intended by management.

At each reporting date the Company assesses whether there is any indication of impairment. If such indication exists, the recoverable amount of the asset is determined which is the higher of its fair value less costs to sell and its value in use. An impairment loss is recognised where the carrying amount exceeds the recoverable amount.

The Company adds to the carrying amount of an item of fixed assets the cost of replacing part of such an item when that cost is incurred, if the replacement part is expected to provide incremental future benefits to the Company. The carrying amount of the replaced part is derecognised. Repairs and maintenance are charged to profit or loss during the period in which they are incurred.

Page 15

SEARS MANUFACTURING CO. (EUROPE) LIMITED

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2025

2.Accounting policies (continued)

2.13

Tangible fixed assets (continued)

Depreciation is charged so as to allocate the cost of assets less their residual value over their estimated useful lives.

Depreciation is provided on the following basis:

Tooling	-	5 years on a straight line basis
Leasehold property improvements	-	Over lease period
Plant and machinery	-	10 - 20 years on a straight line basis
Motor vehicles	-
Fixtures, fittings & equipment	-	10 years straight line (equipment), 3 years straight line (computers)

The assets' residual values, useful lives and depreciation methods are reviewed, and adjusted prospectively if appropriate, or if there is an indication of a significant change since the last reporting date.

Gains and losses on disposals are determined by comparing the proceeds with the carrying amount and are recognised in profit or loss.

2.14

Stocks

Stocks are stated at the lower of cost and net realisable value. Cost compromises 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. Cost is calculated using the weighted average method.

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 profit or loss. Reversals of impairment losses are also recognised in profit or loss.

Net Realisable Value is the estimated selling price less all estimated costs of completion and costs to be incurred in marketing, selling and distribution.

2.15

Debtors

Short-term debtors are measured at transaction price, less any impairment. Loans receivable are measured initially at fair value, net of transaction costs, and are measured subsequently at amortised cost using the effective interest method, less any impairment.

2.16

Cash and cash equivalents

Cash is represented by cash in hand and deposits with financial institutions repayable without penalty on notice of not more than 24 hours. Cash equivalents are highly liquid investments that mature in no more than three months from the date of acquisition and that are readily convertible to known amounts of cash with insignificant risk of change in value.

In the Statement of cash flows, cash and cash equivalents are shown net of bank overdrafts that are repayable on demand and form an integral part of the Company's cash management.

Page 16

SEARS MANUFACTURING CO. (EUROPE) LIMITED

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2025

2.Accounting policies (continued)

2.17

Creditors

Short-term creditors are measured at the transaction price. Other financial liabilities, including bank loans, are measured initially at fair value, net of transaction costs, and are measured subsequently at amortised cost using the effective interest method.

2.18

Provisions for liabilities

Provisions are recognised when an event has taken place that gives rise to a legal or constructive obligation, a transfer of economic benefits is probable and a reliable estimate can be made.

Provisions are measured as the best estimate of the amount required to settle the obligation, taking into account the related risks and uncertainties.

Increases in provisions are generally charged as an expense to profit or loss.

Warranties

The company provides for warranties on products sold. Provision is made for the expected cost of meeting claims in respect of these arrangements.

2.19

Financial instruments

The Company has elected to apply the provisions of Section 11 “Basic Financial Instruments” of FRS 102 to all of its financial instruments.

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

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

Basic financial assets

Basic financial assets, which include trade and other debtors, cash and bank balances, are initially measured at their transaction price (adjusted for transaction costs except in the initial measurement of financial assets that are subsequently measured at fair value through profit and loss) 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 the 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 debtors due with the operating cycle fall into this category of financial instruments.

Impairment of financial assets

At the end of each reporting period financial assets measured at amortised cost are assessed for objective evidence of impairment. If an asset is impaired the impairment loss is the difference between the carrying amount and the present value of the estimated cash flows discounted at the asset’s original effective interest rate. The impairment loss is recognised in profit or loss.

Page 17

SEARS MANUFACTURING CO. (EUROPE) LIMITED

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2025

2.Accounting policies (continued)

2.19

Financial instruments (continued)

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 the 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.

Basic financial liabilities

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

Basic financial liabilities, which include trade and other creditors, bank loans and other loans are initially measured at their transaction price (adjusting for transaction costs except in the initial measurement of financial liabilities that are subsequently measured at fair value through profit and loss). When this constitutes a financing transaction, whereby the debt instrument is measured at the present value of the future payments 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 creditors are obligations to pay for goods and services that have been acquired in the ordinary course of business from suppliers. Trade creditors are classified as current liabilities if the payment is due within one year. If not, they represent non-current liabilities. Trade creditors 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 instruments

Derecognition of financial assets

Financial assets are derecognised when their contractual right to future cash flow expire, or are settled, or when the Company transfers the asset and substantially all the risks and rewards of 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 the Company's contractual obligations expire or are discharged or cancelled.

Page 18

SEARS MANUFACTURING CO. (EUROPE) LIMITED

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2025

3.	Judgements in applying accounting policies and key sources of estimation uncertainty

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

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

Critical judgements

The following judgements (apart from those involving estimates) have had the most significant effect on amounts recognised in the financial statements.

Stock valuation

Stock is valued at the lower of cost and net realisable value. Net realisable value includes, where necessary, provisions for slow moving and obsolete stocks. Calculation of these provisions requires judgements to be made, which include forecast consumer demand, the promotional, competitive and economic environment and stock loss trends.

Warranty provision

A warranty provision is recognised in relation to potential future warranty claims. The provision represents management's best estimate of expected future cash outflows. The estimate is based on past experience and industry averages for defective products.

Page 19

SEARS MANUFACTURING CO. (EUROPE) LIMITED

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2025

Turnover

An analysis of turnover by class of business is as follows:
	2025	2024
	£	£

Sale of seating	20,954,041	21,118,314
	20,954,041	21,118,314

An analysis of turnover by geographical market is given below:
	2025	2024
	£	£

United Kingdom	6,976,408	7,510,886
Europe	11,597,168	11,016,413
United States of America	872,288	1,028,827
South America	523,660	413,910
Asia	561,418	576,350
Australasia	416,076	549,971
Africa	7,023	21,957
	20,954,041	21,118,314

Hire of plant and machinery	38,283	39,175
Other operating lease rentals	208,678	213,829
Depreciation - owned assets	220,286	178,312
Auditor remuneration	26,500	19,500
Non audit fees - tax compliance	1,150	1,750
Non audit fees - other	2,000	1,250
Foreign exchange differences	(255,564)	(323,761)
Research and development costs	18,075	38,400

Page 20

SEARS MANUFACTURING CO. (EUROPE) LIMITED

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2025

Wages and salaries	4,142,462	3,844,553
Social security costs	478,811	385,653
Cost of defined contribution scheme	167,286	156,200
	4,788,559	4,386,406

No directors received any emoluments through this entity in the year (2024: £0).

The average monthly number of employees, including the directors, during the year was as follows:

	2025	2024
	No.	No.

Directors	2	2
Office and management	46	44
Manufacturing	78	88

	126	134

7.	Interest receivable
		2025	2024
		£	£

	Other interest receivable	3,025	5,716
		3,025	5,716

8.	Interest payable and similar expenses
		2025	2024
		£	£

Bank interest payable	175,321	193,158
Loans from group undertakings	72,900	71,292
	248,221	264,450

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SEARS MANUFACTURING CO. (EUROPE) LIMITED

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2025



Total current tax	-	-

	Deferred tax
	Total deferred tax	-	-


	Tax on loss	-	-

Loss on ordinary activities before tax

(397,796)

(730,828)

Loss on ordinary activities multiplied by standard rate of corporation tax in the UK of 25% (2024 - 25%)	(99,448)	(182,707)
Effects of:
Fixed asset differences	3,490	(993)
Expenses not deductible for tax purposes, other than goodwill amortisation and impairment	299	992
Adjustments to brought forward values	-	993
Unrelieved tax losses carried forward	95,659	181,715
Total tax charge for the year	-	-

There is an unprovided deferred tax asset at 31 December 2025 of £1.47m (2024: £1.38m) which relates to fixed asset timing differences and losses carried forward. This deferred tax asset has not been recognised as there is uncertainty as to its recoverability.

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SEARS MANUFACTURING CO. (EUROPE) LIMITED

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2025

10.	Tangible fixed assets

	Improvements to property	Plant and machinery	Motor vehicles	Computer equipment	Total
	£	£	£	£	£
Cost or valuation
At 1 January 2025	1,082,467	3,106,311	-	354,277	4,543,055
Additions	-	222,046	1,750	11,849	235,645
Disposals	-	(206,548)	-	-	(206,548)
At 31 December 2025	1,082,467	3,121,809	1,750	366,126	4,572,152
Depreciation
At 1 January 2025	1,082,467	2,218,662	-	334,763	3,635,892
Charge for the year on owned assets	-	176,724	243	12,036	189,003
Disposals	-	(166,497)	-	-	(166,497)
At 31 December 2025	1,082,467	2,228,889	243	346,799	3,658,398
Net book value
At 31 December 2025	-	892,920	1,507	19,327	913,754
At 31 December 2024	-	887,649	-	19,514	907,163

11.	Stocks
		2025	2024
		£	£

Raw materials and consumables	5,595,272	5,810,250
Work in progress (goods to be sold)	156,934	225,305
Finished goods and goods for resale	464,105	482,233
	6,216,311	6,517,788

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SEARS MANUFACTURING CO. (EUROPE) LIMITED

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2025

12.

Debtors

					2025	2024
					£	£


Trade debtors	2,816,890	2,194,548
Other debtors	75,655	58,556
Prepayments and accrued income	169,865	183,583
	3,062,410	2,436,687

13.	Cash and cash equivalents
		2025	2024
		£	£

Cash at bank and in hand	70,522	127,143
Less: bank overdrafts	(1,996,486)	(2,438,170)
	(1,925,964)	(2,311,027)

14.	Creditors: Amounts falling due within one year
		2025	2024
		£	£

Bank overdrafts	1,996,486	2,438,170
Trade creditors	1,644,511	1,253,204
Amounts owed to group undertakings	4,594,356	3,972,765
Other taxation and social security	112,479	110,826
Other creditors	68,142	77,542
Accruals and deferred income	1,168,763	1,083,505
	9,584,737	8,936,012

Bank overdrafts relate to the overdraft facility extended to the company by its bankers.

Page 24

SEARS MANUFACTURING CO. (EUROPE) LIMITED

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2025

15.	Creditors: Amounts falling due after more than one year
		2025	2024
		£	£

Other loans	3,312,897	3,239,997
	3,312,897	3,239,997

Other loans relates to a credit facility from the parent company which expires in May 2026. Interest is charged at a rate of 2% on this balance.


Amounts falling due 1-2 years
Other loans	3,312,897	3,239,997
	3,312,897	3,239,997


	3,312,897	3,239,997

17.	Provisions

		Warranty Provision
		£

	At 1 January 2025	355,974
	Charged to profit or loss	(49,614)
	At 31 December 2025	306,360

Provisions relate to the company's estimate of future liabilities under warranties provided on products.

Page 25

SEARS MANUFACTURING CO. (EUROPE) LIMITED

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2025

18.	Share capital
		2025	2024
		£	£

Authorised, allotted, called up and fully paid

1,000,000 Ordinary £1 shares shares of £1.00 each	1,000,000	1,000,000

The company has one class of ordinary shares which carry no right to fixed income, with each share also carrying an entitlement to one vote in any circumstance.

19.	Pension commitments

The Company operates a defined contribution pension scheme. The assets of the scheme are held separately from those of the Company in an independently administered fund. The pension cost charge represents contributions payable by the Company to the fund and amounted to £167,286 (2024 - £156,200) . Contributions totalling £16,539 (2024 - £1,204) were payable to the fund at the balance sheet date and are included in creditors.

Not later than 1 year	242,935	275,270
Later than 1 year and not later than 5 years	18,156	47,622
	261,091	322,892

The company leases a factory under an operating lease from a related party. The lease expired in the 2021 and is now on an annual rolling basis, therefore disclosed as within one year.

The company also leases plant and equipment with expiry dates between January 2026 and April 2028.

21.	Related party transactions

Amounts due to/from related parties are considered to be normal trading balances with the exception of the loan from the parent company (see note 14).

Page 26

SEARS MANUFACTURING CO. (EUROPE) LIMITED

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2025

22.	Controlling party

The immediate and ultimate parent undertaking and controlling party is Sears Manufacturing Inc. Sears Manufacturing Inc is the parent undertaking of the smallest and largest group of undertakings to consolidate these financial statements at 31 December 2025. A copy of the consolidated financial statements may be obtained from Sears Manufacturing Inc, PO Box 3667, Davenport, IA 52808, Iowa, USA.

Page 27