ACCOUNTS - Final Accounts

Operating profit

The operating profit is stated after charging:

Registered number: 13035862

EXCHANGER INDUSTRIES UK LIMITED AND ITS SUBSIDIARIES

ANNUAL REPORT AND FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2025

EXCHANGER INDUSTRIES UK LIMITED AND ITS SUBSIDIARIES

COMPANY INFORMATION

Directors	John Thomas
	David Simon Williamson


Registered number	13035862


Registered office	Lytchett House
	13 Freeland Park
	Wareham Road
	Poole
	Dorset
	BH16 6FA


Independent auditors	Wilder Coe Ltd
	Chartered Accountants & Statutory Auditors
	1st Floor Sackville House
	143-149 Fenchurch Street
	London
	EC3M 6BL

EXCHANGER INDUSTRIES UK LIMITED AND ITS SUBSIDIARIES

CONTENTS

	Page
Group Strategic Report	1 - 3
Directors' Report	4 - 5
Independent Auditors' Report	6 - 9
Consolidated Statement of Comprehensive Income	10
Consolidated Statement of Financial Position	11 - 12
Company Statement of Financial Position	13
Consolidated Statement of Changes in Equity	14
Company Statement of Changes in Equity	15
Consolidated Statement of Cash Flows	16
Consolidated Analysis of Net Debt	17
Notes to the Financial Statements	18 - 38

EXCHANGER INDUSTRIES UK LIMITED AND ITS SUBSIDIARIES

GROUP STRATEGIC REPORT

FOR THE YEAR ENDED 31 DECEMBER 2025

Introduction

Exchanger Industries UK Limited has its head office in the UK and is the immediate parent company of HRS Investments Ltd and its subsidiaries. The Company also has direct ownership of a minority shareholding in HRS Process Systems Ltd, a subsidiary of HRS Investments Ltd located in India.

The Company was incorporated on the 20th of November, 2020. On the 20th of July, 2021, the Company purchased a 100% shareholding in HRS Investments Ltd, along with a 14% shareholding in HRS Process Systems Ltd. The purchase of these investments was financed by the issue of shares, a long-term bank loan, and other third-party short-term loans.

HRS Investments Ltd is the parent company of a number of subsidiaries located in the UK, India, Spain, USA, Malaysia, Australia, and New Zealand that are primarily involved in the engineering, design, procurement, and manufacture of heat exchanger equipment and process systems throughout the world.

Business review

Group turnover was £39.8m in 2025 (2024: £39.5m) with loss before tax of £0.4m (2024: profit before tax of £2.3m).

The Group experienced growth in its key market in Europe during 2025. The market in the United Sates was negatively impacted by imposed tariffs and economic uncertainty. In India, the Group continued being impacted by reduced investments by customers in key segments of the food, chemical, and pharmaceutical industries.

Outlook

The Group continues to focus on serving both domestic and international customers to grow revenues by delivering heat transfer and systems solutions to those customers in their respective markets, as well as on identifying new applications for the bespoke product and systems solutions it offers.

Principal risks and uncertainties

The principal risks and uncertainties affecting the Company primarily relate to worldwide economic conditions affecting its subsidiaries, which may affect the level of capital expenditures undertaken by customers across the world.

Credit risk

Credit risk refers to the risk that a counterparty may default on its contractual obligations. The Group is exposed to credit risk through its accounts receivable which operate in the environmental, food, beverage, petrochemical and pharmaceutical industries in Canada, United States, Europe, India, Australia, New Zealand and Malaysia. Credit risk for accounts receivable is managed through the establishment of credit policies and limits, which are applied in the selection of counterparties, and through ongoing management review of all receivable balances past due with the objective of identifying matters that could potentially delay the collection of funds at an early stage.

Interest rate risk

Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. The Group is exposed to interest rate risk arising from fluctuations in the daily overnight SONIA rate and the loan’s applicable pricing margin, which drive the interest rate on borrowings under Group's existing bank loan.

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EXCHANGER INDUSTRIES UK LIMITED AND ITS SUBSIDIARIES

GROUP STRATEGIC REPORT (CONTINUED)

FOR THE YEAR ENDED 31 DECEMBER 2025

Principal risks and uncertainties (continued)

Liquidity risk

Liquidity risk is the risk that the Group will encounter difficulty in meeting its financial obligations associated with financial liabilities that are settled by delivering cash or another financial asset. The Group’s objective is to maintain sufficient cash and manage collections of accounts receivable to settle financial liabilities when they are contractually due. Additionally, the Group prepares budgets and forecasts to achieve its objectives. The Group is in the process of working with its lender on the renewal of its bank loan agreement.

Currency risk

The Group is exposed to financial risks as a result of exchange rate fluctuations and the volatility of these rates, specifically U.S. dollars, Australian dollars, Euros and Indian Rupees. In the normal course of business, the Group purchases inventories denominated in these foreign currencies and the Group also generates sales in these foreign currencies.

Financial key performance indicators

The Group's key financial objectives are to grow turnover and operating profits year on year. Whilst turnover was comparable to the prior year, the operating profits were impacted by foreign exchange losses from weakened United States Dollar and Indian Rupee currencies. The Group’s turnover has been impacted by the economic and tariff policies pursued by the current administration of the United States. The Company continues to look for new market opportunities and focus on costs savings to drive future growth and profits.

Other key performance indicators

The retention of key personnel is critical to the Group’s success, and the Group awards and maintains competitive salary and benefits packages in comparison to current market levels.

Directors' statement of compliance with duty to promote the success of the Group

The directors of the Company present this statement in accordance with Section 172(1) of the Companies Act 2006. In fulfilling their duty to promote the success of the Company for the benefit of its members as a whole, the directors have had due regard to the matters set out in Section 172(1) of the Act.

As a holding company within the group, Exchanger Industries UK Limited plays a strategic role in supporting the group’s broader financial and operational objectives. The Company’s activities are limited, primarily focused on managing inter-company and external financing arrangements. The Company has no employees other than its directors, who do not receive remuneration. Its principal external relationships are with banking partners and a small number of suppliers.

In discharging their responsibilities during the year, the directors considered the following key factors:

The directors remain committed to their responsibilities under Section 172(1) and will continue to oversee the

Company’s role in supporting the group’s strategic and financial objectives.

∙The directors prioritise the long-term financial stability of both the Company and the wider group. Decisions relating to inter-company funding and external borrowings are made with a forward-looking perspective, ensuring alignment with the group’s liquidity requirements and strategic goals.

∙While the Company has limited direct engagement with suppliers, the directors ensure that all relationships are managed responsibly. Payments are made in accordance with agreed terms, and the Company maintains strong, transparent relationships with its banking partners to ensure continued access to funding.

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EXCHANGER INDUSTRIES UK LIMITED AND ITS SUBSIDIARIES

GROUP STRATEGIC REPORT (CONTINUED)

FOR THE YEAR ENDED 31 DECEMBER 2025

Directors' statement of compliance with duty to promote the success of the Group (continued)

∙Impact on the community and environment: Given the Company’s limited operational footprint, its direct environmental impact is minimal. Nonetheless, the directors remain aligned with the group’s broader sustainability objectives and ensure that decisions at the holding company level support the group’s environmental and social responsibility commitments.

∙High standards of business conduct: The directors are committed to upholding strong governance practices. The Company complies with all applicable legal and regulatory requirements, and its financial reporting is prepared in accordance with relevant standards. Transparency and integrity underpin all stakeholder interactions.

∙The directors act impartially and in the best interests of all shareholders. Decisions are made to preserve the Company’s financial health and its ability to support the group. Inter-company transactions are conducted on an arm’s length basis where appropriate, ensuring fairness and transparency.

The directors remain committed to their responsibilities under Section 172(1) and will continue to oversee the
Company’s role in supporting the group’s strategic and financial objectives.

This report was approved by the board on 9 September 2026 and signed on its behalf.

John Thomas

Director

Page 3

EXCHANGER INDUSTRIES UK LIMITED AND ITS SUBSIDIARIES

DIRECTORS' REPORT

FOR THE YEAR ENDED 31 DECEMBER 2025

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

Directors' responsibilities statement

The directors are responsible for preparing the Group Strategic Report, the Directors' Report and the consolidated 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 the Group and of the profit or loss of the Group for that period.

In preparing these financial statements, the directors are required to:

∙select suitable accounting policies for the Group's financial statements and then apply them consistently;

∙make judgments and accounting estimates that are reasonable and prudent;

∙state whether applicable UK 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 Group 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 the Group 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 the Group and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

Disclosure of information to auditors

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 and the Group's auditors are 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 and the Group's auditors are aware of that information.

Principal activity

The Group's principal activity is the design, manufacture and sale of industrial-grade heat exchange and processing units.

Results

The loss for the year, after taxation, amounted to £1,393,504 (2024 - profit £720,052).

Directors

The directors who served during the year were:

John Thomas

David Simon Williamson

Mark El Baroudi (resigned 17 February 2025)

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EXCHANGER INDUSTRIES UK LIMITED AND ITS SUBSIDIARIES

DIRECTORS' REPORT (CONTINUED)

FOR THE YEAR ENDED 31 DECEMBER 2025

Greenhouse gas emissions, energy consumption and energy efficiency action

The Company and the Group fall within the scope of the Streamlined Energy and Carbon Reporting Regulations. However, the Group qualifies for the low energy user exemption, as its total UK energy consumption during the year was 40,000 kWh or less. Accordingly, the disclosures otherwise required by the Regulations have not been provided.

Auditors

The auditors, Wilder Coe Ltd, will be proposed for reappointment in accordance with section 485 of the Companies Act 2006.

This report was approved by the board on 9 September 2026 and signed on its behalf.

John Thomas

Director

Page 5

EXCHANGER INDUSTRIES UK LIMITED AND ITS SUBSIDIARIES

INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF EXCHANGER INDUSTRIES UK LIMITED AND ITS SUBSIDIARIES

Opinion

We have audited the financial statements of Exchanger Industries UK Limited (the 'Parent Company') and its subsidiaries (the 'Group') for the year ended 31 December 2025, which comprise the Consolidated Statement of Comprehensive Income, the Consolidated Statement of Cash Flows, the Consolidated Statement of Financial Position, the Company Statement of Financial Position, the Consolidated Statement of Changes in Equity, the Company 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 Group's and of the Parent Company's affairs as at 31 December 2025 and of the Group's 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 Auditors' responsibilities for the audit of the financial statements section of our report. We are independent of the Group 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 Group's or the Parent 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.

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EXCHANGER INDUSTRIES UK LIMITED AND ITS SUBSIDIARIES

INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF EXCHANGER INDUSTRIES UK LIMITED AND ITS SUBSIDIARIES (CONTINUED)

Other information

The other information comprises the information included in the Annual Report other than the financial statements and our Auditors' 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 Group 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 Group 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 Group and the Parent Company and its environment obtained in the course of the audit, we have not identified material misstatements in the Group 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 by the Parent Company, or returns adequate for our audit have not been received from branches not visited by us; or

∙the Parent Company 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 4, 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 Group's and the Parent 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 Group or the Parent Company or to cease operations, or have no realistic alternative but to do so.

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EXCHANGER INDUSTRIES UK LIMITED AND ITS SUBSIDIARIES

INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF EXCHANGER INDUSTRIES UK LIMITED AND ITS SUBSIDIARIES (CONTINUED)

Auditors' 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 Auditors' 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 Group 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:

We obtained an understanding of the legal and regulatory frameworks within which the company operates, focusing on those laws and regulations that have a direct effect on the determination of material amounts and disclosures in the financial statements. The laws and regulations we considered in this context were the UK financial reporting standards, the Companies Act 2006, Taxation legislation and Pensions legislation and distributable profits legislation. During the engagement team briefing, the outcomes of the understanding were shared with the team, as well as consideration as to where and how fraud may occur in the entity.

We identified the greatest risks of material misstatement in the financial statements arising from irregularities, including fraud, as non-compliance with laws and regulations, management override of controls, and revenue recognition.

Our audit procedures to respond to management override risk and non-compliance with laws and regulations included enquiries of management and those charged with governance as to whether the entity complies with such laws and regulations; enquiries with the same concerning any actual or potential litigation or claims; inspection of relevant legal correspondence; review of board minutes; testing the appropriateness of journal entries; reviewing accounting estimates for biases; and the performance of analytical review to identify unexpected movements in account balances which may be indicative of fraud. Our audit procedures to respond to revenue recognition risks included sample testing a sample of income across the year to agree to supporting documentation, and reviewing income received on either side of the year end to ensure this has been recognised correctly.

No instances of material non-compliance were identified. However, the likelihood of detecting irregularities, including fraud, is limited by the inherent difficulty in detecting irregularities, the effectiveness of the entity’s controls, and the nature, timing and extent of the audit procedures performed. Irregularities that result from fraud might be inherently more difficult to detect than irregularities that result from error. As explained above, there is an unavoidable risk that material misstatements may not be detected, even though the audit has been planned and performed in accordance with ISAs (UK).

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 Auditors' Report.

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EXCHANGER INDUSTRIES UK LIMITED AND ITS SUBSIDIARIES

INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF EXCHANGER INDUSTRIES UK LIMITED AND ITS SUBSIDIARIES (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 Auditors' 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.

Chris Gent (Senior Statutory Auditor)

for and on behalf of

Wilder Coe Ltd

Chartered Accountants & Statutory Auditors

1st Floor Sackville House

143-149 Fenchurch Street

London

EC3M 6BL

10 September 2026

Page 9

EXCHANGER INDUSTRIES UK LIMITED AND ITS SUBSIDIARIES

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

FOR THE YEAR ENDED 31 DECEMBER 2025

	2025	2024
Note	£	£


Turnover	4	39,799,807	39,530,623
Cost of sales		(24,722,046)	(23,023,945)
Gross profit		15,077,761	16,506,678
Administrative expenses		(14,924,175)	(13,547,633)
Other operating income		13,003	-
Operating profit	5	166,589	2,959,045
Interest receivable and similar income	7	2,772	19,032
Interest payable and similar expenses	8	(545,222)	(661,354)
(Loss)/profit on ordinary activities before taxation		(375,861)	2,316,723
Taxation on (loss)/profit on ordinary activities	11	(1,017,643)	(1,596,671)
(Loss)/profit for the financial year		(1,393,504)	720,052


Foreign exchange reserves movements	(477,859)	(279,003)
Other comprehensive losses for the year	(477,859)	(279,003)
Total comprehensive (expense)/income for the year	(1,871,363)	441,049

(Loss)/profit for the year attributable to:
Owners of the Parent Company	(1,393,504)	720,052
	(1,393,504)	720,052

The notes on pages 18 to 38 form part of these financial statements.

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EXCHANGER INDUSTRIES UK LIMITED AND ITS SUBSIDIARIES

REGISTERED NUMBER: 13035862

CONSOLIDATED STATEMENT OF FINANCIAL POSITION

AS AT 31 DECEMBER 2025

		2025		2024
Note		£		£

Fixed assets
Intangible assets	12		9,103,285		10,716,034
Tangible assets	13		2,636,446		2,769,364
			11,739,731		13,485,398
Non-current assets
Deferred tax asset	22		175		-
Current assets
Stocks	15	6,340,447		7,508,074
Debtors: amounts falling due within one year	16	11,809,855		10,730,183
Cash at bank and in hand		2,549,729		2,634,692
		20,700,031		20,872,949
Creditors: amounts falling due within one year	17	(20,965,606)		(14,527,357)
Net current (liabilities)/assets			(265,575)		6,345,592
Total assets less current liabilities			11,474,331		19,830,990
Creditors: amounts falling due after more than one year	18		(873,352)		(7,216,553)
Provisions for liabilities
Deferred tax	22	-		(65,842)
Other provisions	21	(61,147)		(137,400)
			(61,147)		(203,242)
Net assets			10,539,832		12,411,195

Capital and reserves
Allotted, called up and fully paid share capital	23	1,201	1,201
Share premium account		10,209,453	10,209,453
Foreign exchange reserve		(1,086,660)	(608,801)
Profit and loss account		1,415,838	2,809,342
Equity shareholders' funds		10,539,832	12,411,195

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EXCHANGER INDUSTRIES UK LIMITED AND ITS SUBSIDIARIES

REGISTERED NUMBER: 13035862

CONSOLIDATED STATEMENT OF FINANCIAL POSITION (CONTINUED)

AS AT 31 DECEMBER 2025

The financial statements were approved and authorised for issue by the board and were signed on its behalf on 9 September 2026.

John Thomas

Director

The notes on pages 18 to 38 form part of these financial statements.

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EXCHANGER INDUSTRIES UK LIMITED AND ITS SUBSIDIARIES

REGISTERED NUMBER: 13035862

COMPANY STATEMENT OF FINANCIAL POSITION

AS AT 31 DECEMBER 2025

		2025		2024
Note		£		£

Fixed assets
Investments	14		22,492,298		22,492,298
Current assets
Debtors: amounts falling due within one year	16	1,998		-
Cash at bank and in hand		58,688		101,661
		60,686		101,661
Creditors: amounts falling due within one year	17	(13,992,027)		(8,085,888)
Net current liabilities			(13,931,341)		(7,984,227)
Total assets less current liabilities			8,560,957		14,508,071

Creditors: amounts falling due after more than one year	18		-		(5,563,175)

Net assets			8,560,957		8,944,896

Capital and reserves
Allotted, called up and fully paid share capital	23	1,201	1,201
Share premium account		10,209,453	10,209,453
Profit and loss account		(1,649,697)	(1,265,758)
		8,560,957	8,944,896

The Company has taken advantage of the exemption allowed under section 408 of the Companies Act 2006 and has not presented its own Statement of Comprehensive Income in these financial statements. The loss after tax of the Company for the year was £383,939 (2024: £384,313).

The financial statements were approved and authorised for issue by the board and were signed on its behalf on 9 September 2026.

John Thomas

Director

The notes on pages 18 to 38 form part of these financial statements.

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EXCHANGER INDUSTRIES UK LIMITED AND ITS SUBSIDIARIES

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

FOR THE YEAR ENDED 31 DECEMBER 2025

	Called up share capital	Share premium account	Foreign exchange reserves	Profit and loss account	Total equity
	£	£	£	£	£
At 1 January 2024	1,201	10,209,453	(329,798)	2,089,290	11,970,146
Comprehensive income for the year
Profit for the year	-	-	-	720,052	720,052
Currency translation differences	-	-	(279,003)	-	(279,003)

At 31 December 2024 and 1 January 2025	1,201	10,209,453	(608,801)	2,809,342	12,411,195
Comprehensive income for the year
Loss for the year	-	-	-	(1,393,504)	(1,393,504)
Currency translation differences	-	-	(477,859)	-	(477,859)
At 31 December 2025	1,201	10,209,453	(1,086,660)	1,415,838	10,539,832

The notes on pages 18 to 38 form part of these financial statements.

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EXCHANGER INDUSTRIES UK LIMITED AND ITS SUBSIDIARIES

COMPANY 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	1,201	10,209,453	(881,445)	9,329,209
Comprehensive income for the year
Loss for the year	-	-	(384,313)	(384,313)

At 31 December 2024 and 1 January 2025	1,201	10,209,453	(1,265,758)	8,944,896
Comprehensive income for the year
Loss for the year	-	-	(383,939)	(383,939)
At 31 December 2025	1,201	10,209,453	(1,649,697)	8,560,957

The notes on pages 18 to 38 form part of these financial statements.

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EXCHANGER INDUSTRIES UK LIMITED AND ITS SUBSIDIARIES

CONSOLIDATED STATEMENT OF CASH FLOWS

FOR THE YEAR ENDED 31 DECEMBER 2025

			2025	2024
			£	£

Cash flows from operating activities
(Loss)/profit for the financial year	(1,393,504)	720,052
Adjustments for:
Depreciation/amortization of fixed assets	1,959,576	1,929,574
(Profit)/loss on disposal of tangible assets	(9,567)	12,032
Interest paid	545,222	661,354
Interest received	(2,772)	(19,032)
Taxation charge	1,078,932	1,729,170
Decrease in stocks	1,167,627	1,160,504
(Increase)/decrease in debtors	(875,895)	1,088,685
Increase/(decrease) in creditors	1,444,418	(3,249,638)
Decrease in provisions	(76,253)	(52,650)
Deferred tax	(66,017)	(129,432)
Corporation tax paid	(1,205,107)	(1,973,737)
Foreign exchange	(477,859)	(279,003)
Net cash generated from operating activities	2,088,801	1,597,879

Cash flows from investing activities
Purchase of intangible fixed assets	(51,466)	(72,360)
Purchase of tangible fixed assets	(246,655)	(640,903)
Sale of tangible fixed assets	41,779	349
Interest received	2,772	19,032
Foreign exchange movements	100,576	36,522
Net cash used in investing activities	(152,994)	(657,360)
Cash flows from financing activities
Repayment of loans	(1,451,969)	(805,451)
Repayment of finance leases	(23,579)	(2,406)
Interest paid	(545,222)	(661,354)
Net cash used in financing activities	(2,020,770)	(1,469,211)
Net decrease in cash and cash equivalents	(84,963)	(528,692)
Cash and cash equivalents at beginning of year	2,634,692	3,163,384
Cash and cash equivalents at the end of year	2,549,729	2,634,692

Cash and cash equivalents at the end of year comprise:
Cash at bank and in hand	2,549,729	2,634,692

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EXCHANGER INDUSTRIES UK LIMITED AND ITS SUBSIDIARIES

CONSOLIDATED ANALYSIS OF NET DEBT

FOR THE YEAR ENDED 31 DECEMBER 2025


At 1 January 2025	Cash flows	Loan aging	New Finance leases	At 31 December 2025
£	£	£	£	£

Cash at bank and in hand	2,634,692	(84,963)	-	-	2,549,729
Current portion of long term loan	(654,491)	-	(4,908,684)	-	(5,563,175)
Non-current portion of long term loan	(5,563,175)	-	5,563,175	-	-
Finance leases	(37,490)	-	-	(24,997)	(62,487)
	(3,620,464)	(84,963)	654,491	(24,997)	(3,075,933)

The notes on pages 18 to 38 form part of these financial statements.

Page 17

EXCHANGER INDUSTRIES UK LIMITED AND ITS SUBSIDIARIES

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2025

1.	General information

Exchanger Industries UK Limited ("the Company") is a private limited company domiciled and incorporated in England and Wales. The registered office is Lytchett House, 13 Freeland Park, Wareham Road, Poole, Dorset, England, BH16 6FA.

The Group consists of Exchanger Industries UK Limited and all of its subsidaries.

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 Group management to exercise judgment in applying the Group's accounting policies (see note 3).

Parent Company disclosure exemptions

In preparing the separate financial statements of the parent Company, advantage has been taken of the following disclosure exemptions available in FRS 102:

∙The Company has taken advantage of the exemption from preparing a Statement of Cash Flows, on the basis that it is a qualifying entity and the group Statement of Cash Flows, included in these financial statements, includes the Company's cash flow.

∙The Company has taken advantage of the exemption allowed under section 408 of the Companies Act 2006 and has not presented its own Statement of Comprehensive Income in these financial statements.

The following principal accounting policies have been applied:

2.2

Basis of consolidation

The consolidated financial statements present the results of the Company and its own subsidiaries ("the Group") as if they form a single entity. Intercompany transactions and balances between group companies are therefore eliminated in full.

The consolidated financial statements incorporate the results of business combinations using the purchase method. In the Statement of Financial Position, the acquiree's identifiable assets, liabilities and contingent liabilities are initially recognised at their fair values at the acquisition date. The results of acquired operations are included in the Consolidated Statement of Comprehensive Income from the date on which control is obtained. They are deconsolidated from the date control ceases.

2.3

Going concern

The financial statements have been prepared on a going concern basis. In assessing the appropriateness of this basis, the Directors have reviewed forecasts covering a period of at least 12 months from the date of approval of the financial statements and are satisfied that the Group and the Company will be able to meet their liabilities as they fall due.

The Directors have also considered the continued support of Exchanger Industries Limited, the ultimate parent undertaking. Accordingly, the Directors consider it appropriate to prepare the financial statements on a going concern basis.

Page 18

EXCHANGER INDUSTRIES UK LIMITED AND ITS SUBSIDIARIES

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2025

2.Accounting policies (continued)

2.4

Foreign currency translation

Functional and presentation currency

The Company's functional and presentational currency is GBP.

Transactions and balances

Foreign currency transactions are translated into the functional currency using the spot exchange rates at the dates of the transactions.

At each period end foreign currency monetary items are translated using the closing rate. Non-monetary items measured at historical cost are translated using the exchange rate at the date of the transaction and non-monetary items measured at fair value are measured using the exchange rate when fair value was determined.

Foreign exchange gains and losses resulting from the settlement of transactions and from the translation at period-end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in the Consolidated Statement of Comprehensive Income except when deferred in other comprehensive income as qualifying cash flow hedges.

Foreign exchange gains and losses that relate to borrowings and cash and cash equivalents are presented in the Consolidated Statement of Comprehensive Income within 'finance income or costs'. All other foreign exchange gains and losses are presented in the Consolidated Statement of Comprehensive Income within 'other operating income'.

On consolidation, the results of overseas operations are translated into Sterling at rates approximating to those ruling when the transactions took place. All assets and liabilities of overseas operations are translated at the rate ruling at the reporting date. Exchange differences arising on translating the opening net assets at opening rate and the results of overseas operations at actual rate are recognised in other comprehensive income.

Page 19

EXCHANGER INDUSTRIES UK LIMITED AND ITS SUBSIDIARIES

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2025

2.Accounting policies (continued)

2.5

Turnover

Turnover is recognised to the extent that it is probable that the economic benefits will flow to the Group and the revenue can be reliably measured. Turnover is measured as the fair value of the consideration received or receivable, excluding discounts, rebates, value added tax and other sales taxes. The following criteria must also be met before revenue is recognised:

Sale of goods

Turnover from the sale of goods is recognised when all of the following conditions are satisfied:

∙the Group has transferred the significant risks and rewards of ownership to the buyer;

∙the Group retains neither continuing managerial involvement to the degree usually associated with ownership nor effective control over the goods sold;

∙the amount of revenue can be measured reliably;

∙it is probable that the Group will receive the consideration due under the transaction; and

∙the costs incurred or to be incurred in respect of the transaction can be measured reliably.

Rendering of services

Turnover from a contract to provide services is recognised in the period in which the services are provided in accordance with the stage of completion of the contract when all of the following conditions are satisfied:

∙the amount of revenue can be measured reliably; and

∙it is probable that the Group will receive the consideration due under the contract.

2.6

Interest income

Interest income is recognised in the Consolidated Statement of Comprehensive Income using the effective interest method.

2.7

Finance costs

Finance costs are recognised in the Consolidated Statement of Comprehensive Income 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.

2.8

Borrowing costs

All borrowing costs are recognised in the Consolidated Statement of Comprehensive Income in the year in which they are incurred.

2.9

Dividends

Equity dividends are recognised 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.

Page 20

EXCHANGER INDUSTRIES UK LIMITED AND ITS SUBSIDIARIES

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2025

2.Accounting policies (continued)

2.10

Intangible assets

Goodwill

Goodwill represents the difference between amounts paid on the cost of a business combination and the acquirer’s interest in the fair value of the Group's share of its identifiable assets and liabilities of the acquiree at the date of acquisition. Subsequent to initial recognition, goodwill is measured at cost less accumulated amortisation and accumulated impairment losses. Goodwill is amortised on a straight-line basis to the Consolidated Statement of Comprehensive Income over its useful economic life. Goodwill is assessed for impairment when there are indicators of impairment and any impairment is charged to the income statement. No reversals of impairment are recognised.

Product & website development and patents

Product & website development and patents are initially recognised at cost. Subsequent to initial recognition, product & website development and patents are measured at cost less any accumulated amortisation and any accumulated impairment losses. Product & website development and patents are amortised to the Consolidated Statement of Comprehensive Income over their estimated economic life.

All intangible assets are considered to have a finite useful life. If a reliable estimate of the useful life cannot be made, the useful life shall not exceed ten years.

The estimated useful lives range as follows:

Patents	-	4 - 10 years
Development expenditure	-	3 - 5 years
Goodwill	-	10 years

2.11

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 Group 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.

Page 21

EXCHANGER INDUSTRIES UK LIMITED AND ITS SUBSIDIARIES

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2025

2.Accounting policies (continued)

2.11

Tangible fixed assets (continued)

Depreciation is charged so as to allocate the cost of assets less their residual value over their estimated useful lives, using the straight-line method.

The estimated useful lives range as follows:

Freehold property - land	-	not depreciated
Freehold property - buildings	-	30 - 50 years
Short-term leasehold property	-	straight line over the term of lease
Plant and machinery	-	10 - 15 years
Motor vehicles	-	5 - 8 years
Fixtures and fittings	-	3 - 10 years

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 the Consolidated Statement of Comprehensive Income.

2.12

Valuation of investments

In the Parent Company financial statements, investments in subsidiaries are initially measured at cost and subsequently measured at cost less any accumulated impairment losses. The investments are assessed for impairment at each reporting date where there is an indication of impairment and any impairment losses or reversals of impairment losses are recognised immediately in the the Consolidated Statement of Comprehensive Income.

2.13

Stocks

Stocks are stated at the lower of cost and net realisable value, being the estimated selling price less costs to complete and sell. Work in progress and finished goods include labour and attributable overheads.

At each reporting date, stocks are assessed for impairment. If stock is impaired, the carrying amount is reduced to its selling price less costs to complete and sell. The impairment loss is recognised immediately in the Consolidated Statement of Comprehensive Income.

2.14

Debtors

Short-term debtors are measured at transaction price, less any impairment.

2.15

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 Consolidated 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 Group's cash management.

2.16

Creditors

Short-term creditors are measured at the transaction price.

Page 22

EXCHANGER INDUSTRIES UK LIMITED AND ITS SUBSIDIARIES

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2025

2.Accounting policies (continued)

2.17

Financial instruments

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

The Group has elected to apply the recognition and measurement provisions of IFRS 9 Financial Instruments (as adopted by the UK Endorsement Board) with the disclosure requirements of Sections 11 and 12 and the other presentation requirements of FRS 102.

Financial instruments are recognised in the Group's Statement of Financial Position when the Group 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 Group'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 the Consolidated Statement of Comprehensive Income.

Financial assets are impaired when events, subsequent to their initial recognition, indicate the estimated future cash flows derived from the financial assets have been adversely impacted.

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 Consolidated Statement of Comprehensive Income.

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 Group after the deduction of all its liabilities.

Basic financial liabilities, which include trade and other creditors, bank loans, other loans and loans due to fellow group companies 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.

Page 23

EXCHANGER INDUSTRIES UK LIMITED AND ITS SUBSIDIARIES

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2025

2.Accounting policies (continued)

2.17

Financial instruments (continued)

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 assets

Financial assets are derecognised when their contractual right to future cash flow expire, or are settled, or when the Group 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 Group 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 Group's contractual obligations expire or are discharged or cancelled.

2.18

Equity Instruments

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

2.19

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 the Consolidated Statement of Comprehensive Income.

Page 24

EXCHANGER INDUSTRIES UK LIMITED AND ITS SUBSIDIARIES

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2025

2.Accounting policies (continued)

2.20

Current and deferred taxation

The tax expense for the year comprises current and deferred tax. Tax is recognised in the Consolidated Statement of Comprehensive Income except that a charge attributable to an item of income and expense recognised as other comprehensive income or to an item recognised directly in equity is also recognised in other comprehensive income or directly in equity respectively.

The current corporation 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 and the Group operate and generate income.

Deferred tax balances are recognised in respect of all timing differences that have originated but not reversed by the reporting date, except that:

∙The recognition of deferred tax assets is limited to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits;

∙Any deferred tax balances are reversed if and when all conditions for retaining associated tax allowances have been met; and

∙Where they relate to timing differences in respect of interests in subsidiaries, associates, branches and joint ventures and the Group can control the reversal of the timing differences and such reversal is not considered probable in the foreseeable future.

Deferred tax balances are not recognised in respect of permanent differences except in respect of business combinations, when deferred tax is recognised on the differences between the fair values of assets acquired and the future tax deductions available for them and the differences between the fair values of liabilities acquired and the amount that will be assessed for tax. Deferred tax is determined using tax rates and laws that have been enacted or substantively enacted by the reporting date.

2.21

Pensions

Defined contribution pension plan

The Group operates a defined contribution plan for its employees. A defined contribution plan is a pension plan under which the Group pays fixed contributions into a separate entity. Once the contributions have been paid the Group has no further payment obligations.

The contributions are recognised as an expense in the Consolidated Statement of Comprehensive Income when they fall due. Amounts not paid are shown in accruals as a liability in the Statement of Financial Position. The assets of the plan are held separately from the Group in independently administered funds.

2.22

Employee Benefits

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

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

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

Page 25

EXCHANGER INDUSTRIES UK LIMITED AND ITS SUBSIDIARIES

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2025

2.Accounting policies (continued)

2.23

Operating leases: the Group as lessee

Rentals paid under operating leases are charged to the Consolidated Statement of Comprehensive Income on a straight-line basis over the lease term.

Benefits received and receivable as an incentive to sign an operating lease are recognised on a straight-line basis over the lease term, unless another systematic basis is representative of the time pattern of the lessee's benefit from the use of the leased asset.

2.24

Onerous leases

Where the unavoidable costs of a lease exceed the economic benefit expected to be received from it, a provision is made for the present value of the obligations under the lease.

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

In the application of the Group'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.

Management does not believe there to be any critical judgements or key sources of estimation uncertainty which have a significant effect on the amounts recognised in the financial statements.

Key sources of estimation uncertainty

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

The useful economic life and amortisation of goodwill

Estimates of the useful economic life of goodwill are based on a variety of factors such as the expected use of the acquired business, the expected useful life of the cash generating units to which the goodwill is attributed, any legal, regulatory or contractual provisions that can limit the useful life and assumptions that market participants would consider in respect of similar business.

Impairment of intangible assets and goodwill

Where an indication of impairment is identified the estimation of recoverable value requires an estimation of the recoverable value of the cash generating units (CGUs). This requires estimation of the future cashflows from the CGUs and also selection of appropriate discount rates in order to calculate the net present value of those cashflows.

Impairment of investments

Investments held are subject to impairment review where an indication of impairment is identified. The Group's management undertakes an impairment review annually or more frequently if events or changes in circumstances indicate that the carrying value may not be recoverable.

Page 26

EXCHANGER INDUSTRIES UK LIMITED AND ITS SUBSIDIARIES

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2025

Turnover

The whole of the turnover is attributable to the principal activity of the Group, being that of process engineering.

Analysis of turnover by country of destination:

					2025	2024
					£	£

United Kingdom	1,837,269	2,059,178
Rest of Europe	13,821,144	8,747,108
North America	2,606,879	6,494,364
India	19,522,928	20,074,175
Rest of the World	2,011,587	2,155,798
	39,799,807	39,530,623

Depreciation and amortisation	1,959,576	1,929,574
Foreign currency exchange differences	(811,648)	(181,764)
Other operating lease rentals	466,479	575,123


Fees payable to the Company's auditors and their associates for the audit of the Consolidated and Parent Company's financial statements	37,800	42,000
Audit of the financial statements of the Company's subsidiaries	41,545	41,132
	79,345	83,132

7.	Interest receivable and similar income
		2025	2024
		£	£

Other interest receivable

2,772

19,032

Page 27

EXCHANGER INDUSTRIES UK LIMITED AND ITS SUBSIDIARIES

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2025

8.	Interest payable and similar expenses
		2025	2024
		£	£

Bank interest payable	452,811	539,351
Other loan interest payable	92,411	122,003
	545,222	661,354

9.	Employees
	Staff costs were as follows:

		Group	Group
		2025	as restated 2024
		£	£


Wages and salaries	6,206,607	6,616,617
Social security costs	771,253	637,116
Cost of defined contribution scheme	206,132	378,905
Other staff benefits	186,234	205,721
	7,370,226	7,838,359

The total cost to the Group of key management personnel was £1,317,280 (2024: £2,120,844)

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

	Group	Group	Company	Company
	2025	2024	2025	2024
	No.	No.	No.	No.

Directors	12	12	2	3
Employees	256	264	-	-

	268	276	2	3

10.	Directors' remuneration

The directors who served during the year are renumerated by other group entities. It is not practicable to determine the proportion of their emoluments that relates specifically to their services as directors of this Group and Company.

Page 28

EXCHANGER INDUSTRIES UK LIMITED AND ITS SUBSIDIARIES

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2025

Corporation tax
Current tax on losses/profits for the year	1,078,932	1,729,170

Total current tax	1,078,932	1,729,170

	Deferred tax
	Deferred tax - current year	(61,289)	(132,499)


	Taxation on loss/profit on ordinary activities	1,017,643	1,596,671

(Loss)/profit on ordinary activities before tax

(375,861)

2,316,723

(Loss)/profit on ordinary activities multiplied by standard rate of corporation tax in the UK of 25% (2024 - 25%)	(93,965)	579,181
Effects of:
Disallowable expenses	9,703	17,394
Depreciation in the year in excess of capital allowances	10,594	4,507
Charitable donations	83	-
Adjustments to tax charge in respect of prior periods	46	1,846
Movement in deferred tax for the year	(61,289)	(132,499)
Effects of different non-UK tax rates	16,566	(43,874)
Dividends from UK companies	275,950	431,475
Other differences leading to an increase in taxation	585,516	463,678
Tax losses utilised by companies within the group	(14,533)	(248,951)
Tax losses created in the year by companies within the group	288,972	523,914
Total tax charge for the year	1,017,643	1,596,671

Factors that may affect future tax charges

There are group company losses totalling £7,041,851 in 2025 (2024: £5,873,787) to be utilised against future taxable profits.

Page 29

EXCHANGER INDUSTRIES UK LIMITED AND ITS SUBSIDIARIES

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2025

12.	Intangible assets
	Group

	Patents	Development expenditure	Goodwill	Total
	£	£	£	£
Cost
At 1 January 2025	594,082	259,364	17,568,175	18,421,621
Additions	51,466	-	-	51,466
Currency translation differences	24,611	-	-	24,611
At 31 December 2025	670,159	259,364	17,568,175	18,497,698
Amortisation
At 1 January 2025	493,905	259,364	6,952,318	7,705,587
Charge for the year	56,062	-	1,612,535	1,668,597
Currency translation differences	20,229	-	-	20,229
At 31 December 2025	570,196	259,364	8,564,853	9,394,413
Net book value
At 31 December 2025	99,963	-	9,003,322	9,103,285
At 31 December 2024	100,177	-	10,615,857	10,716,034

	Company
	The Company had no intangible fixed assets at 31 December 2025 or 31 December 2024.

Page 30

EXCHANGER INDUSTRIES UK LIMITED AND ITS SUBSIDIARIES

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2025

13.	Tangible fixed assets
	Group

	Freehold land and buildings	Short-term leasehold property	Plant and machinery	Motor vehicles	Fixtures and fittings	Total
	£	£	£	£	£	£
Cost or valuation
At 1 January 2025	2,251,691	262,254	657,194	194,180	1,273,612	4,638,931
Additions	-	14,419	77,168	83,334	120,310	295,231
Disposals	-	-	(7,430)	(60,691)	(95,576)	(163,697)
Currency translation differences	(58,152)	(19,547)	(62,031)	(14,293)	(54,624)	(208,647)
At 31 December 2025	2,193,539	257,126	664,901	202,530	1,243,722	4,561,818
Depreciation
At 1 January 2025	592,329	86,082	327,862	154,405	708,889	1,869,567
Charge for the year	59,135	38,571	34,805	23,588	134,880	290,979
Disposals	(611)	-	(592)	(53,859)	(76,423)	(131,485)
Currency translation differences	(33,204)	(4,250)	(27,212)	(10,213)	(28,810)	(103,689)
At 31 December 2025	617,649	120,403	334,863	113,921	738,536	1,925,372
Net book value
At 31 December 2025	1,575,890	136,723	330,038	88,609	505,186	2,636,446
At 31 December 2024	1,659,362	176,172	329,332	39,775	564,723	2,769,364

The net book value of assets held under finance leases or hire purchase contracts, included above, are as follows:
	2025	2024
	£	£


	Motor vehicles	88,609	33,741

Company

The Company had no tangible fixed assets at 31 December 2025 or 31 December 2024.

Page 31

EXCHANGER INDUSTRIES UK LIMITED AND ITS SUBSIDIARIES

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2025

14.	Fixed asset investments

	Company

		Investments in subsidiary companies
		£
	Cost
	At 1 January 2025 and at 31 December 2025	22,492,298

Direct subsidiary undertakings
The following were direct subsidiary undertakings of the Company:
Name	Registered office	Class of shares	Holding

Heatexchangerspares.com Limited	(i)	Ordinary	100%
HRS Hevac Limited	(i)	Ordinary	100%
HRS Heat Exchangers NZ Limited	(vii)	Ordinary	100%
HRS Heat Exchangers Limited	(i)	Ordinary	100%
HRS International Limited	(i)	Ordinary	100%
HRS Investments Limited	(i)	Ordinary	100%
HRS Heat Exchangers, S.L.U.	(iv)	Ordinary	100%
HRS Heat Exchangers Sdn. Bhd.	(ii)	Ordinary	100%
HRS Heat Exchangers Pty Ltd	(iii)	Ordinary	100%
HRS Process Systems Ltd.	(vi)	Ordinary	86%
HRS Process Technology, Inc.	(v)	Ordinary	100%

Indirect subsidiary undertaking
The following was an indirect subsidiary undertaking of the Company:
Name	Registered office	Class of shares	Holding

HRS Process Systems Ltd.

(vi)

Ordinary

13.99%

(i) Lytchett House, 13 Freeland Park, Wareham Road, Poole, Dorset, BH16 6FA

(ii) 28B Jalah Tapah, Off Jalan Goh Hock Huat, 41400 Klang, Selangor Darul Ehsan, Malaysia

(iii) Banks Group, 801 Glenferrie Road, Hawthorn, VIC 3122, Australia

(iv) Poligono Industrial San Martin, C/ Castillo de la Concepcion, Nova 6, Lorqui, Murcia, Spain

(v) 1395 South Marietta Pkwy SE, Building 700, Suite 740, Marietta, GA 30067, United States

(vi) 3rd Floor Kalpataru Infinia, F.P. No 21, Old Mumbai-Pune Highway, Wakdewadi, Shivajinagar,Pune
Maharashtra, 41005, India

(vii) Alliott NZ Ltd (Chartered Accountants), Level 2, 142 Broadway, Newmarket, Auckland, 1023, New
Zealand

Page 32

EXCHANGER INDUSTRIES UK LIMITED AND ITS SUBSIDIARIES

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2025

15.	Stocks
		Group	Group
		2025	2024
		£	£

Raw materials and consumables	3,893,006	4,853,220
Work in progress (goods to be sold)	2,108,934	1,874,273
Finished goods and goods for resale	338,507	780,581
	6,340,447	7,508,074

16.	Debtors
		Group	Group	Company	Company
		2025	2024	2025	2024
		£	£	£	£

Due after more than one year
Deferred tax asset	175	-	-	-

Group	Group	Company	Company
2025	2024	2025	2024
£	£	£	£

Due within one year
Trade debtors	10,364,686	8,834,947	-	-
Other debtors	336,399	355,486	-	-
Prepayments and accrued income	1,108,770	1,539,750	1,998	-
	11,809,855	10,730,183	1,998	-

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EXCHANGER INDUSTRIES UK LIMITED AND ITS SUBSIDIARIES

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2025

17.	Creditors: Amounts falling due within one year
		Group	Group	Company	Company
		2025	2024	2025	2024
		£	£	£	£

Bank loans (note 20)	5,563,175	654,491	5,563,175	654,491
Trade creditors	6,404,243	4,518,529	-	-
Amounts owed to group undertakings	2,714,079	2,234,475	7,888,504	6,838,046
Corporation tax	306,116	228,514	-	-
Other taxation and social security	832,895	562,445	-	-
Obligations under finance lease (see note 19)	14,930	7,385	-	-
Other creditors	1,189,134	1,496,031	540,348	593,351
Accruals and deferred income	3,941,034	4,825,487	-	-
	20,965,606	14,527,357	13,992,027	8,085,888

Included within amounts owed to group undertakings due within one year is £267,487 (2024: £256,577), which is repayable on demand. Interest is charged at an assumed rate of 4.16%. There is no security against this loan.

Amounts owed to group undertakings are unsecured, interest-free and repayable on demand.

An unsecured subordinated loan of £500,000 (2024: £500,000) is included within other creditors. The loan bears interest at 6% per annum and has no fixed repayment date.

18.	Creditors: Amounts falling due after more than one year
		Group	Group	Company	Company
		2025	2024	2025	2024
		£	£	£	£

Bank loans (note 20)	-	5,563,175	-	5,563,175
Net obligations under finance leases (note 19)	47,557	30,105	-	-
Amounts owed to parent undertakings	825,795	1,623,273	-	-
	873,352	7,216,553	-	5,563,175

Included within amounts owed to parent undertakings due after more than one year is £825,795 (2024: £1,623,273), which is repayable in March 2032. Interest is charged at a rate of 4.16%, and there is no security against this loan.

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EXCHANGER INDUSTRIES UK LIMITED AND ITS SUBSIDIARIES

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2025

19.	Hire purchase and finance leases
	Minimum lease payments under hire purchase fall due as follows:
		Group	Group
		2025	2024
		£	£

Within one year	14,930	7,385
Between 1-5 years	47,557	30,105
	62,487	37,490

20.	Loans
	Analysis of the maturity of loans is given below:
		Group	Group	Company	Company
		2025	2024	2025	2024
		£	£	£	£



Bank loans payable
Less than one year	5,563,175	654,491	5,563,175	654,491
One to five years	-	5,563,175	-	5,563,175

	5,563,175	6,217,666	5,563,175	6,217,666

The bank loan is secured on the assets of the Company and its subsidiaries by way of a fixed and floating charge. Interest is payable on the loan at a rate of 3 - 3.5% plus the daily ovemight SONIA rate. The bank loan has a scheduled maturity date of 17 September 2026. In July 2026, the Company's bank loan provider has offered the Company a new term sheet, which provides an extension of the current agreement by three years.

21.	Provisions
	Group

		Provision for onerous leases
		£

	At 1 January 2025	137,400
	Utilised in year	(76,253)
	At 31 December 2025	61,147

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EXCHANGER INDUSTRIES UK LIMITED AND ITS SUBSIDIARIES

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2025

22.	Deferred taxation
	Group

		2025
		£

	At beginning of year	(65,842)
	Utilised in year	66,017
	At end of year	175

		Group	Group
		2025	2024
		£	£

Accelerated capital allowances	(47,210)	(91,504)
Deferred tax on revaluation	(188,775)	(188,775)
Other timing differences	236,160	214,437
	175	(65,842)

23.	Share capital
		2025	2024
		£	£

Allotted, called up and fully paid

1,201 (2024 - 1,201) Ordinary shares of £1.00 each	1,201	1,201

Ordinary shares carry full rights, including voting privileges, dividend payments, and participation in distributions.

24.	Pension Commitments

The Group operates a defined contributions pension scheme. The assets of the scheme are held separately from those of the Group in an independently administered fund. The pension cost charge represents contributions payable by the Group to the fund and amounted to £206,133 (2024: £378,905). There were no amounts due at the year end for the current year or previous year.

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EXCHANGER INDUSTRIES UK LIMITED AND ITS SUBSIDIARIES

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2025

25.	Contingent liabilities
	At 31 December 2025, the Group has bank guarantees outstanding to the value of £2,148,499 (2024: £1,423,573). In the opinion of the directors, it is unlikely that any liability will crystalise in this respect.
		Group 2025	Group 2024
		£	£

Bank guarantees - India	848,699	1,175,551
Letters of credit - India	15,564	98,684
Bank guarantees - Spain	1,008,076	81,883
Bank guarantees - Australia	159,520	67,455
Bank guarantees - Malaysia	116,640	-
	2,148,499	1,423,573

26.	Commitments under operating leases
	At 31 December 2025 the Group and the Company had future minimum lease payments due under non-cancellable operating leases for each of the following periods:
		2025	2024
		£	£

Not later than 1 year	342,427	554,099
Later than 1 year and not later than 5 years	560,441	807,718
	902,868	1,361,817

The Company had no commitments under non-cancellable operating leases at the Balance Sheet date.

27.

Related party transactions

Remuneration of key management personnel

The directors are considered to be the Group's key management personnel. As disclosed in note 10, the directors are remunerated by other group entities and it is not practicable to determine the proportion of their emoluments that relates specifically to their services as directors of the Group and Company.

Transactions with related parties

The Company has taken advantage of the exemption in Financial Reporting Standard 102, Section 33.1A not to disclose transactions with group entities which are wholly owned by a member of the Group.

All transactions between fellow Group undertakings have been eliminated on consolidation and are therefore not disclosed in the Group financial statements. Furthermore, there are no related party transactions between the Parent Company and non-wholly owned Group members that require disclosure.

Page 37

EXCHANGER INDUSTRIES UK LIMITED AND ITS SUBSIDIARIES

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2025

28.	Controlling party

As at 31 December 2025 and 31 December 2024, the immediate and ultimate parent undertaking was Exchanger Industries Limited, a company registered in Canada.

The smallest and largest group in which the Company's results are consolidated is headed by Exchanger Industries Limited. Copies of these Group Financial Statements are available from 140 Quarry Park Boulevard SE, Suite 120, Calgary, Alberta, T2C 3G3, Canada.

As at 31 December 2025 and 31 December 2024, the ultimate controlling party is Cooperatie Nova Argent U.A. by virtue of its shareholding in the ultimate parent undertaking.

Page 38