REGISTERED NUMBER: 01368342 (England and Wales)

STRATEGIC REPORT, REPORT OF THE DIRECTORS AND

AUDITED FINANCIAL STATEMENTS

FOR THE YEAR ENDED 28 FEBRUARY 2025

FOR

A. & B. ENGINEERING (MECHANICAL

SERVICE DIVISION) LIMITED

Page

Company Information

1

Strategic Report

2

Report of the Directors

13

Report of the Independent Auditors

15

Statement of Comprehensive Income

19

Balance Sheet

20

Statement of Changes in Equity

21

Cash Flow Statement

22

Notes to the Cash Flow Statement

23

Notes to the Financial Statements

25

DIRECTORS:

M Hart

I D Buxton

J Gaskill

P Godfrey

SECRETARY:

M Hart

REGISTERED OFFICE:

11 Derby Lane

Old Swan

Liverpool

Merseyside

L13 6QA

REGISTERED NUMBER:

01368342 (England and Wales)

INDEPENDENT AUDITORS:

Fairhurst Audit Services Ltd

Statutory Auditor

Chartered Accountants

Douglas Bank House

Wigan Lane

Wigan

Lancashire

WN1 2TB

SOLICITORS:

Wafer Phillips

54 Muirhead Avenue East

Liverpool

L1 1EL

The purpose of this annual report is to report our financial performance, our activities, and our strategies for year end 2025 and to communicate our financial position, our aspirations and our strengths going forward into 2026.

A&B Engineering (Mechanical Service Division) Limited is a wholly owned subsidiary of A&B Engineering MEP Limited. Based in Old Swan in Liverpool, the business provides mechanical, electrical and plumbing services throughout the North West of the UK.

REVIEW OF BUSINESS

The year to February 2025 was another successful year for us, in terms of safe and quality delivery of many schemes and financially, we achieved our expectations in terms of turnover and profits. Turnover at £59,860,357 was in line with our business plan.

Our financial headlines are :

Year End 2025

Year End 2024

Increase/(Decrease

)

£

£

%

Turnover

59,860,357

53,099,697

13

Gross Profit

7,233,830

7,093,806

2

Pre-Tax Profit

3,612,734

3,441,887

(3

)

Tax on Profit

(972,098

)

(868,953

)

2

Profit after Tax

2,640,636

2,572,934

(6

)

The financial results were as expected and in line with our aspirations. This is testament to the hard work by so many of our team and the fully on-board and committed workforce. Growth is in line with our business plan and that is expected to continue marginally, in a sustained fashion for the next couple of years. Our expectations for our Accounts for Year End February 2026 are expected to be down on the above numbers. The Building Safety Act has delayed many Construction schemes across the country and we have been affected by projects not starting when they were planned to. This will have an impact on our turnover and profits for Year End 2026, although with these same projects still going ahead, albeit it later, we expect our Year End 2027 Accounts to be our best ever.

We continue to work alongside our long term and much cherished customers, and we have added a number of blue-chip customers to our client portfolio, which is helping our growth strategy. There were several new projects secured in the year that will form part of our workload and accounts going forward. These new schemes include:

- Mayfield Office Development

- Stockport8 Accommodation Blocks

- Sparkle Street Residential Tower Manchester

Delivering our projects in a fashion that is expected from our customers requires us to retain our current team together with investment and recruitment of skilled and professional people. Our number of Employees has risen 20% in the last couple of years. We have opened a new Office in Leeds in this Financial Year, and we will expect recruitment to continue marginally in the next couple of years, not least in Yorkshire regions as we expand our operations to serve current and new customers in this region.

The skills shortage is a concern, although delays caused by the Building Safety Act (mentioned above) have eased our concerns around skills shortages for the immediate future. Looking after the current team, keeping the positive on-board mentality from so many people is a huge commitment and investment to maintain and grow our skilled workforce and remains our focus in this respect.

Business optimism remains extremely high. Inflation, whilst is still factor, is not a major concern to us as it once was only a short while back. The confidence has allowed us to secure a considerable % of our Target Turnover, which is detailed in the chart below. Such is the strength of our customer relationships and our aggression in our sales approach, we are seeking and securing long term projects that are strengthening our Sales into Financial Years 3 / 4 years in advance. This is not something that has been the normal format in work winning. We believe it is fuelled by the early engagement approach that has come on the back of that process through the high inflation concerns of the last few years. It is also helped with our In-House Design Team that can engage with our customers at a very early stage. This is a service that can bring cost certainty to our clients, secure the correct supply chain partners and influence the overall building design. The early design brings confidence to our customers as they can guarantee we can work to develop full project cost viability.

There are other factors that help us secure projects at a much earlier stage. The Building Safety Act (The focus of the Act is on building structural safety and fire safety) and implementing the requirements, the Gateways that need to be achieved can make the Design and Building Approval take much longer. We have an expertise in working on schemes that fall under the requirements of the BSA, and we believe our customers want to take up our capacity in Design and procurement. We believe the skills shortage plays a part in our growth and increased profitability.

So, whilst the BSA, as mentioned above, has delayed start on site dates for us. Our expertise in Design and Support of helping projects get approval through BSA Gateways, is helping us secure further prestigious projects. We have an expertise in-house that our customers value and choose to work with us and engage early in a partnership.

.

Target Sales

Secured

£

£

%

YE 2025 (Actual)

60,000,000

59,860,357

100

YE 2026

60,000,000

52,813,000

88

YE 2027

60,000,000

59,503,000

99

YE 2028

65,000,000

83,698,000

128

YE 2029

65,000,000

10,079,000

16

PRINCIPAL RISKS AND UNCERTAINTIES

As mentioned above inflation has been a concern and a risk to us in recent years. We have tried to mitigate that risk by asking suppliers to allow within their costs for the risk of inflation. This has diluted the overall risk on a particular project by asking the wider supply chain to share some of that risk.

For us though the concerns around inflation are not as concerning as they were last year although we continue to monitor the changes.

Labour shortages are a risk to us. We are embracing this by recruiting in areas we feel we need to strengthen. Mentoring and incentivising our current team. Promoting from within and encouraging development to ensure we have a positive on-board work force. We share these concerns with our supply chain partners and encourage those to apply the same policies. We monitor workloads to ensure we are not stretching ourselves and we analyse our capacity on a week-by-week basis. We plan our forward orders meticulously to make sure we have all the necessary resources.

Insolvencies is a major risk. We continue to see business failures in construction. We have and we continue to insure our customers through our credit insurance. If we don't have the insurance in place, we will not work with that particular customer. This is a policy we have adopted over the last 20 years and is a factor in our reason for us not suffering from any bad debts.

Maintaining our healthy order book is a risk. We must work hard to maintain the level of sales we are achieving. We do this through investments. We invest in people, we stay close with our customers, we embrace changes, and we understand our customer's needs. Right now, a major requirement of our customers is to be working with them to deliver social value and demonstrating our sustainability drives. Without these two items alone, we would not keep moving forward. It is for that reason we have invested heavily and positively.

We have a dedicated social value manager who is driving our ambitions in respect to all our social value aspirations. We invest and spend in our communities, and we continue to recruit, train and mentor a high number of apprentices. We have recruited a sustainability manager who is leading our charge in sustainability and our drive towards net carbon. We have highlighted each of these topics below (sustainability and social Value).

SOCIAL VALUE AND OUR CORE VALUES INCLUDING SECTION 172(1) STATEMENT

Social value is important to us all. We also recognise the importance to the business in providing what our customers need and what lasting legacies we can leave in the communities that we work. To help deliver on this we have appointed a dedicated social value manager.

A & B Engineering is committed to delivering value not only to its clients but also to the wider community and environment. As a socially responsible organisation, we aim to contribute positively to the economic, social, and environmental wellbeing of the communities in which we operate. Our social value purpose aligns with our core values of:

1. Safety & Sustainability: Emphasising both workplace safety and environmental responsibility.

2. Integrity: Encompassing honesty, unity, and loyalty.

3. Equality & Respect: Treating everyone fairly and with dignity.

4. Quality & Passion: Delivering high-quality work with enthusiasm and dedication.

5. Customer Focus: Maintaining a strong customer-oriented mindset.

Purpose

Our purpose is to outline the principles and commitments that guide our contribution to social value. This ensures that our business activities promote positive outcomes for society, protect the environment, and deliver sustainable benefits for future generations.

Core Areas of Focus

1. Economic Impact:

o Promote local employment by prioritising recruitment from the communities where we operate.

o Support small and medium-sized enterprises (SMEs) by partnering with local suppliers and contractors.

o Invest in training and development programs to enhance skills and career prospects for local workers.

2. Environmental Responsibility:

o Implement sustainable engineering practices to minimize carbon footprint and reduce waste.

o Prioritise the use of renewable materials and energy-efficient technologies in our projects.

o Set targets to reduce energy consumption and promote resource efficiency throughout the supply chain.

3. Community Engagement:

o Collaborate with local organisations, schools, and charities to support community development projects.

o Encourage employees to participate in volunteering activities that benefit local communities.

o Sponsor initiatives that promote STEM (Science, Technology, Engineering, and Mathematics) education among young people, particularly from disadvantaged backgrounds.

4. Diversity and Inclusion:

o Foster an inclusive working environment where all individuals, regardless of background, have equal opportunities to succeed.

o Commit to improving diversity in the engineering field by supporting underrepresented groups in our recruitment and training practices.

o Promote gender equality within the workplace and encourage women to pursue careers in engineering.

5. Ethical Business Practices:

o Maintain the highest standards of ethics and transparency in all our business operations.

o Ensure that all stakeholders, including clients, suppliers, and partners, adhere to ethical labour and environmental practices.

o Conduct business in a way that is fair, equitable, and respects human rights.

6. Health and Well-being:

o Provide a safe and healthy working environment for all employees, clients, and contractors.

o Promote mental and physical well-being through workplace wellness initiatives.

o Support flexible working arrangements to encourage a healthy work-life balance.

Measuring and Reporting Social Value

A & B Engineering will measure its social value contributions using a combination of qualitative and quantitative metrics, such as:

- Number of local jobs created

- Amount of investment in community projects

- Environmental impact (e.g., energy savings, waste reduction)

- Diversity statistics and training hours delivered

We are committed to transparency and will publish an annual Social Value Report detailing our performance and progress in achieving these goals.

Governance

The social value policy is overseen by the social value committee, which consists of senior management representatives. This committee is responsible for ensuring that the policy is implemented effectively across all business operations, reviewing progress, and setting new objectives in line with emerging social and environmental challenges.

Continuous Improvement

A & B Engineering is dedicated to continuously improving our social value contributions by staying updated on best practices and engaging with stakeholders to understand their needs and expectations.

This policy will help A & B Engineering deliver social value alongside its business objectives, ensuring that its engineering projects contribute positively to both the community and the environment.

Social value contributions in the last financial year include:

- £20,000.00 of charitable donations

- 54% of our spend spent locally

- engaging with 20 different communities

- 30 days volunteer work completed by staff

- hiring 8 local apprentices

- signing an armed forces covenant

STREAMLINED ENERGY AND CARBON REPORTING

Sustainability is important to us all. Both individually and as a company because we care about what we do and what we can change and improve to help our planet. We are pleased to announce that we have appointed a Sustainability and Environmental Manager to join our team. Our Sustainability Manager started earlier in the year. His passions around engineering and contributing to a sustainable future and work towards achieving net-zero, align with our passions here. He has a MSC in climate change & sustainability and is something that will be beneficial to us all working together.

The appointment is perfect in fulfilling the role we have as our sustainability manager and environmental lead. We know this goes hand in hand in many ways with what we do design wise and technically, in that respect, this is part of an extension to our design department and what we do there to drive our sustainability aspirations. He has experience in Revit Design, and these will be invaluable to us as he will be part of our thermal model team working on complex low Carbon and sustainable projects, to develop SBEM and EPC's.

In many ways this is an extension of the design team helping with all the above. He will lead our requirement to analyse and record our Scope 1, 2 and 3 data and our desire to reduce our carbon outputs. (Please see our stats below) We are now exploring how we manage our waste, record that and strive to reduce it. He will oversee environmental and sustainability strategies for our business, analysing, assessing, and reporting on environmental impact, using his skills in carbon foot-printing and corporate sustainability. He is a long-term team addition to continue building our carbon library and develop our EPD's.

Whilst we have considerable experience in design and installation of complex net carbon projects including NABERS 5.5 star rating. Having a dedicated sustainability manager is important to us all on our net carbon aspirations.

This has been a very exciting appointment, one that is vitally important to our business progression and one that is important to us all in our passions to be at the forefront of climate Change & sustainability, it is important as everyone one of us wants to do what we can to help save our planet.

In addition to having a dedicated sustainability manager we have also embraced a few carbon-reducing initiatives. We have rolled out a Salary Sacrifice Scheme where we encourage a great number of our staff to have electric cars and that has been a success. It helps our net carbon drive but also help with the issue mentioned above in respect to the skills shortage. Helping our staff retention drive.

We are also changing our office gas boiler to an air source heat pump, and we are moving forward with a plan for extensive Photovoltaic (PV) installation across our roof. Together with a range of electric car chargers in our car park for the Salary Sacrifice Scheme members to charge their cars from our sustainable PV Installation.

We have also achieved ISO 14001 Accreditation - (Environmental Management System).

Streamlined Energy and Carbon Reporting

Reporting Period

January to December

Reporting Boundary

Operational control boundary, covering all assets and locations where A&B Engineering has operational control

Reporting Method

our data is compiled based on billing data, meter readings, and fuel usage records across our operations. Conversion factors for energy and emissions were applied using the latest 2024 UK Government GHG Conversion Factors for Company Reporting

Asset Definition

Defined as any operational location or asset under the financial or operational control of A&B Engineering

Data Conversion

All consumption data is converted to emissions using the 2024 DEFRA Conversion Factors

Intesity Ratio

The intensity measurement is reported as "per £million turnover" , providing a comparison of emissions relative to business activity. This is most relevant to our industry's scope and A&B Engineering's operational output.

Current Reporting Year 2024/25

Reporting Year 2023/24

Scope 1

Emissions Source

kWh 24

TCO2e 24

KWh 23

TCO2e 23

Gas (Operational assets)

143,147

26,19

150,932

27.61

Gas (Operational sites)

N/A

N/A

N/A

N/A

Transport

63,218.89

15.04

19,568.27

19.67

Diesel (On site Vehicles)

N/A

N/A

N/A

N/A

Fugitive emissions

2.34

19.5084

Scope 2

Electricity (operational assets)

51,350.45

10.63

44,946.4

9.31

Total Scope 1 & 2 Emissions

257,715.85

54.20

215,446.67

76.0984

Turnover

£59,860,357

£53,099,697

Intensity ratio

4,305.28

0.91

405.9

1.43

(Gross Scope 1 & 2 emissions)

kWh per £million

TCO2e per £million

kWh per £million

TCO2 per £million

Race to Net Zero

We have continued progressing on our Race to Net Zero by 2030, focusing on reducing our operational emissions and improving how we design, deliver, and manage projects.

This includes transitioning our head office to low-carbon technologies with plans to replace our gas boiler with an Air Source Heat Pump and install Photovoltaic (PV) panels across our roof to generate renewable energy on-site.

We are also reducing our transport related emissions through our successful Salary Sacrifice Electric Vehicle Scheme, which has seen an increasing number of staff transition to electric vehicles.

Our fleet now includes the VW ID Buzz for carpooling and two VW ID.4s for site and project travel. This initiative not only reduces emissions but also supports our team's wellbeing and retention.

Carbon Library and Technical Development

Our Internal Carbon Library continues to grow, serving as a key tool in our design and engineering decisions.

Over the past year, we have:

- Expanded our carbon database with new material data and manufacturer Environmental Product Declarations (EPDs) from our supply chain.

- Integrated TM65 methodology into our design processes to assess embodied carbon more accurately.

This development ensures that sustainability isn't a separate goal but a technical standard embedded in our design philosophy.

Environmental Management & ISO 14001

We are proud to maintain our ISO 14001 Environmental Management System (EMS) certification, reflecting our ongoing commitment to operating responsibly and efficiently. This system helps us manage our environmental responsibilities systematically and continuously improve performance across all business areas from design to installation and operational management.

Tool Box Talks and Site Awareness

Our on-site sustainability engagement has also grown through Tool Box Talks, focusing on encouraging practical, sustainable behaviours among our site teams.

These sessions cover a range of topics including:

- Proper waste segregation and recycling.

-Turning off lights and equipment when not in use.

- Reducing unnecessary heating and maintaining equipment efficiently.

-Minimising noise pollution and reporting leaks.

-Reducing water consumption and promoting sustainable travel.

By reinforcing small, consistent actions, we are nurturing an environmentally conscious workforce that understands how everyday decisions contribute to our wider sustainability goals.

Repurpose Programme

This year, we launched our Repurpose Programme, combining sustainability with social value by donating surplus materials to schools, colleges, and community centres to support hands on learning in MEP training. At Hugh Baird College, we provided unvented hot water cylinders for use in practical lessons, helping students gain real-world experience while reducing waste and giving materials a meaningful second life.

Alignment Globally with the UN Sustainable Development Goals (SDGs)

A&B Engineering continues to align our efforts with several United Nations Sustainable Development Goals, ensuring our sustainability strategy supports global progress towards a fairer, greener future.

Our actions particularly support:

-SDG 7 - Affordable & Clean Energy: through renewable energy installation and low-carbon design.

-SDG 9 - Industry, Innovation & Infrastructure: by developing sustainable mechanical and electrical systems and low-carbon design practices.

-SDG 12 - Responsible Consumption & Production: through our waste reduction and recycling initiatives.

-SDG 13 - Climate Action: through our Race to Net Zero, SECR reporting, and carbon management systems.

-SDG 11 - Sustainable Cities & Communities: by supporting clients in creating energy-efficient, sustainable buildings.

Future Aspirations

As we move into the next reporting period, we remain focused on continuous improvement and innovation.

Our plans include:

-Expanding our Scope 3 data coverage to include supply chain and waste emissions

-Continuing to enhance our Internal Carbon Library and carbon data accuracy.

-Increasing employee engagement onsite through regular Tool Box Talks and sustainability training

-Expanding our electric vehicle fleet and further promoting the salary sacrifice scheme

SOCIAL VALUE UPDATE

Social Value is important to us all. We also recognise the importance to the business in providing what our customers need and what lasting legacies we can leave in the communities that we work. Over the last 12 months we have developed of Social Value aligning it with our core business values and adding in our key objectives around Education, Community and Wellbeing which have been strategically implemented by our dedicated Social Value Manager.

A & B Engineering is committed to delivering value not only to its clients but also to the wider community and environment. As a socially responsible organisation, we aim to contribute positively to the economic, social, and environmental wellbeing of the communities in which we operate. Our Social Value purpose aligns with our core values of:

1. Safety & Sustainability: Emphasising both workplace safety and environmental responsibility.

2. Integrity: Encompassing honesty, unity, and loyalty.

3. Equality & Respect: Treating everyone fairly and with dignity.

4. Quality & Passion: Delivering high-quality work with enthusiasm and dedication.

5. Customer Focus: Maintaining a strong customer-oriented mindset.

Key Highlights for the reporting period:

Special Recognitions / awards:

- Vinci Supply Chain Winner for Social Value

- Bowmer & Kirkland T- Level Recognition award Silver

- Armed Forces Employer Recognition award Silver

- Standing Tall Foundation Winner Social Impact and Community award

Community

We have continued to support our core community charities introduced some new:

- CRADLE

- North West Air Ambulance Service

- Standing Tall Foundation

- Casus Pax

- Clatterbridge Hospital

- Shelter

- The Wellspring Centre

- Webb Lane Allotment

- Foodbank support across the region

Education

We can now boast to having forty-two apprentices across all business from level 1 through to level 7. We recognise and promote fair and equal opportunities for all across the regions we work. Linking in closely with our education systems from FE to HE and Adult Learning we can now say we support not only our learners but our educators in the development of industry standard. We are also part of the national equlex pilot to support linking in closely with industry leaders Careers Connect and Liverpool Careers Hub.

Wellbeing

1. Improved Productivity: Employees who feel mentally and physically well are more engaged, motivated, and efficient.

2. Reduced Absenteeism: A focus on wellbeing helps lower stress and prevent burnout, reducing sick days.

3. Better Retention: A supportive environment fosters loyalty and reduces staff turnover.

4. Positive Culture: Promotes a sense of belonging, inclusion, and psychological safety.

5. Enhanced Reputation: Companies known for prioritising wellbeing attract top talent and build stronger stakeholder trust.

Wellbeing in the Wider Community: Why It Matters

1. Social Cohesion: Community wellbeing initiatives foster connection, reduce isolation, and build stronger support networks.

2. Healthier Populations: Encouraging physical activity, mental health support, and access to services improves overall public health.

3. Economic Benefits: Healthier communities are more economically resilient, with lower healthcare costs and higher productivity.

4. Empowerment and Inclusion: Wellbeing programs can uplift marginalised groups and promote equity.

Sustainable Development: Community wellbeing is a pillar of sustainable, thriving societies

Measuring and Reporting Social Value Through our Platform - Social Score

A & B Engineering will measure its social value contributions using a combination of qualitative and quantitative metrics, such as:

- Number of local jobs created

- Amount of investment in community projects

- Environmental impact (e.g., energy savings, waste reduction)

- Diversity statistics and training hours delivered

We are committed to transparency and will publish an annual Social Value Report detailing our performance and progress in achieving these goals. SocialScore transforms A&B Engineering data into a clear, valuable, researched and standardised value for the social impact generated, with many activities having a monetary value attached. As shown above at the start of this review.

SocialScore seamlessly aligns to social value frameworks and standards including TOMs, Social Value Model, Measure Up, UN SDGs, EU CSRD and other global standards.

Social Value Summary

Social Value Generated all time

1,499,599

Education

Apprenticeships

471,089.08

T-levels

Career days

School activations

Mock interviews

Work placements

Training and adult learning

SUMMARY

As mentioned above, our business optimism is very high. Having secured the level of sales as indicated, we feel we are in a favourable position to continue our growth and achieve our profits in line with our forward-looking business plan.

The investment of years gone by are providing us with the skills and workforce needed for our continued development. Our Apprentices are coming of age, and we continue to invest heavily in this area. We have an emphasis in delivering Quality in a safe manner and in that respect, we are growing our Health and Safety Team and our Quality Managers Headcount is improving.

We support everyone who works within the business. We have 40 dedicated Mental Health First Aiders in-house and we are embracing Digital Building and AI Technology in everything we do. We have a number of Postgraduates working with us and our Apprentices in Design and Technology are Graduate Apprentices.

Geographically our business is well placed in a busy region, with many long term investment projects in our pipeline. These will keep us busy for a number of years.

Our new Office in Leeds, that we opened this year, will help us serve our existing customers in their Yorkshire Regions and help us develop new relationships with new customers in that region. It will help in our sales growth and improve our profit levels for many years to come.

We believe we have a bright future, a dynamic and ambitious team a portfolio of robust and sound Customers and a very health forward looking order book.

ON BEHALF OF THE BOARD:

M Hart - Secretary

26 November 2025

The directors present their report with the financial statements of the company for the year ended 28 February 2025.

PRINCIPAL ACTIVITY

The principal activity of the company in the year under review was that of mechanical engineering contractors.

DIVIDENDS

The total distribution of dividends for the year ended 28 February 2025 will be £ 2,480,719 .

DIRECTORS

The directors shown below have held office during the whole of the period from 1 March 2024 to the date of this report.

M Hart

I D Buxton

J Gaskill

P Godfrey

DISCLOSURE IN THE STRATEGIC REPORT

The Streamlined Energy and Carbon Reporting disclosure can be found in the Strategic Report.

STATEMENT OF DIRECTORS' RESPONSIBILITIES

The directors are responsible for preparing the Strategic Report, the Report of the Directors and the financial statements in accordance with applicable law and regulations.

Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law), 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 and then apply them consistently;

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

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

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

STATEMENT AS TO DISCLOSURE OF INFORMATION TO AUDITORS

So far as the directors are aware, there is no relevant audit information (as defined by Section 418 of the Companies Act 2006) of which the company's auditors are unaware, and each director has taken all the steps that he ought to have taken as a director in order to make himself aware of any relevant audit information and to establish that the company's auditors are aware of that information.

AUDITORS

The auditors, Fairhurst Audit Services Ltd, will be proposed for re-appointment at the forthcoming Annual General Meeting.

ON BEHALF OF THE BOARD:

M Hart - Secretary

26 November 2025

Opinion

We have audited the financial statements of A. & B. Engineering (Mechanical Service Division) Limited (the 'company') for the year ended 28 February 2025 which comprise the Statement of Comprehensive Income, Balance Sheet, Statement of Changes in Equity, Cash Flow Statement and Notes to the Cash Flow Statement, Notes to the Financial Statements, including a summary of significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland' (United Kingdom Generally Accepted Accounting Practice).

In our opinion the financial statements:

-	give a true and fair view of the state of the company's affairs as at 28 February 2025 and of its profit for the year then ended;

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

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

Basis for opinion

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

Conclusions relating to going concern

In auditing the financial statements, we have concluded that the 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.

Other information

The directors are responsible for the other information. The other information comprises the information in the Strategic Report and the Report of the Directors, but does not include the financial statements and our Report of the Auditors thereon.

Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon.

In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.

Opinions on other matters prescribed by the Companies Act 2006

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

-	the information given in the Strategic Report and the Report of the Directors for the financial year for which the financial statements are prepared is consistent with the financial statements; and

-	the Strategic Report and the Report of the Directors 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 Report of the Directors.

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

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

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

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

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

Responsibilities of directors

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

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 a Report of the Auditors 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.

The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below:

Irregularities are instances of non-compliance with laws and regulations. The objectives of our audit are to obtain sufficient appropriate audit evidence regarding compliance with laws and regulations that have a direct effect in the determination of material amounts and disclosures in the financial statement, to perform audit procedures to help identify instances of non-compliance with other laws and regulations that may have a material effect on the financial statements, and to respond appropriately to identified or suspected non-compliance with laws and regulations identified during the audit.

In relation to fraud, the objectives of our audit are to identify and assess the risk of material misstatements of the financial statements due to fraud, to obtain sufficient appropriate audit evidence regarding the assessed risks of material misstatement due to fraud through designing and implementing appropriate responses and to respond appropriately to fraud or suspected fraud identified during the audit.

However, it is the primary responsibility of management, with the oversight of those charged with governance, to ensure that the entity's operations are conducted in accordance with the provisions of laws and regulations and for the prevention and detection of fraud.

In identifying and addressing risks of material misstatement in respect of irregularities, including fraud and

non-compliance with laws and regulations, our procedures included the following:

- The engagement partner ensured that the engagement team collectively had the appropriate competence,

capabilities and skills to identify or recognise non-compliance with applicable laws and regulations;

- We obtained an understanding of laws and regulations that affect the company, focusing on those that had a

direct effect on the financial statements or that had a fundamental effect on its operations. Key laws and

regulations that we have identified included Companies Act 2006, Tax legislation, data protection, employment,

environmental and health & safety legislation.

- We assessed the extent of compliance with the laws and regulations identified above through making enquiries of

management, reviewing minutes of meetings and inspecting legal correspondence.

In assessing the susceptibility of the company's financial statements to material misstatement, including obtaining and understanding of how fraud might occur;

- We gained an understanding of the controls that management have in place to prevent and detect fraud. We

enquired of management about any instances of fraud that had taken place during the year.

To address the risk of fraud through management bias and override of controls;

- We performed analytical procedures to identify any unusual or unexpected relationships;

- We tested journal entries to identify unusual transactions; and

- We assessed whether judgements and assumptions made in determining the accounting estimates were indicative

of potential bias.

Due to the inherent limitations of an audit, there is an unavoidable risk that we may not have detected some material

misstatements in the financial statements, even though we have properly planned and performed our audit in accordance with auditing standards. For example, as with any audit, there remained a higher risk of non-detection of irregularities, as these may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal controls. We are not responsible for preventing fraud or non-compliance with laws and regulations and cannot be expected to detect all fraud and non-compliance with laws and regulations.

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 Report of the Auditors.

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 a Report of the Auditors 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.

Louise Webster BSc BFP ACA (Senior Statutory Auditor)

for and on behalf of Fairhurst Audit Services Ltd

Statutory Auditor

Chartered Accountants

Douglas Bank House

Wigan Lane

Wigan

Lancashire

WN1 2TB

26 November 2025

TURNOVER

3

59,860,357

53,099,697

Cost of sales

52,626,527

46,005,891

GROSS PROFIT

7,233,830

7,093,806

Administrative expenses

3,608,423

3,615,314

3,625,407

3,478,492

Other operating income

24,917

40,355

OPERATING PROFIT

5

3,650,324

3,518,847

Interest receivable and similar income

6

16,637

10,898

3,666,961

3,529,745

Interest payable and similar expenses

7

54,227

98,858

PROFIT BEFORE TAXATION

3,612,734

3,430,887

Tax on profit

8

935,444

868,953

PROFIT FOR THE FINANCIAL YEAR

2,677,290

2,561,934

OTHER COMPREHENSIVE INCOME

Transfer between reserves

-

239

Transfer between reserves

-

(239

)

Revaluation of property

Income tax relating to components of other comprehensive income

-

-

OTHER COMPREHENSIVE INCOME FOR THE YEAR, NET OF INCOME TAX

-

-

TOTAL COMPREHENSIVE INCOME FOR THE YEAR

2,677,290

2,561,934

FIXED ASSETS

Tangible assets

10

762,444

775,724

Investment property

11

318,400

318,400

1,080,844

1,094,124

CURRENT ASSETS

Stocks

12

40,000

40,000

Debtors

13

17,311,970

13,060,979

Cash at bank

987,524

2,946,632

18,339,494

16,047,611

CREDITORS

Amounts falling due within one year

14

13,188,712

13,763,583

NET CURRENT ASSETS

5,150,782

2,284,028

TOTAL ASSETS LESS CURRENT LIABILITIES

6,231,626

3,378,152

CREDITORS

Amounts falling due after more than one year

15

(3,924,595

)

(1,280,922

)

PROVISIONS FOR LIABILITIES

18

(22,065

)

(8,835

)

NET ASSETS

2,284,966

2,088,395

CAPITAL AND RESERVES

Called up share capital

19

11,099

11,099

Share premium

20

37,500

37,500

Revaluation reserve

20

156,592

156,849

Capital redemption reserve

20

43,901

43,901

Retained earnings

20

2,035,874

1,839,046

SHAREHOLDERS' FUNDS

2,284,966

2,088,395

The financial statements were approved by the Board of Directors and authorised for issue on 26 November 2025 and were signed on its behalf by:

M Hart - Director

Called up

share

Retained

Share

capital

earnings

premium

£

£

£

Balance at 1 March 2023

11,099

2,517,925

37,500

Changes in equity

Dividends

-

(3,241,052

)

-

Total comprehensive income

-

2,562,173

-

Balance at 29 February 2024

11,099

1,839,046

37,500

Changes in equity

Dividends

-

(2,480,719

)

-

Total comprehensive income

-

2,677,547

-

Balance at 28 February 2025

11,099

2,035,874

37,500

Capital

Revaluation

redemption

Total

reserve

reserve

equity

£

£

£

Balance at 1 March 2023

157,088

43,901

2,767,513

Changes in equity

Dividends

-

-

(3,241,052

)

Total comprehensive income

(239

)

-

2,561,934

Balance at 29 February 2024

156,849

43,901

2,088,395

Changes in equity

Dividends

-

-

(2,480,719

)

Total comprehensive income

(257

)

-

2,677,290

Balance at 28 February 2025

156,592

43,901

2,284,966