Company registration number 06217134 (England and Wales)
HUBBARD PRODUCTS LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2024
HUBBARD PRODUCTS LIMITED
COMPANY INFORMATION
Directors
Mr I Katsoulis
Mr J Umamoto
Mr F De Baets
Mr J Warmenhoven
Mr O Lagrabette
(Appointed 13 April 2023)
Secretary
Mr I Katsoulis
Company number
06217134
Registered office
4 Crane Boulevard
Ipswich
Suffolk
IP3 9SQ
Auditor
BDO LLP
Cavell House
St Crispins Road
Norwich
NR3 1YE
HUBBARD PRODUCTS LIMITED
CONTENTS
Page
Strategic report
1 - 4
Directors' report
5
Directors' responsibilities statement
6
Independent auditor's report
7 - 10
Income statement
11
Statement of comprehensive income
12
Statement of financial position
13
Statement of changes in equity
14
Statement of cash flows
15
Notes to the financial statements
16 - 34
HUBBARD PRODUCTS LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 31 MARCH 2024
- 1 -

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

Review of the business

Trading result for the year shows turnover of £21,750,301, a 5% decrease on the previous year.

 

Results of key performance indicators:

 

2024

2023

Sales

£21,750,301

£22,892,119

Gross profit margin

11.4%

10.6%

Operating loss

Trade debtor days

£2,220,039

65

£1,982,137

45

Trade creditor days

33

43

Stock days

138

123

 

The company envisages reducing the operating losses in the year ended 31 March 2025 under the ownership of the Daikin Group; with a move to trading profitably in the year ended 31 March 2026. Exploiting the investments of the past, and the relocation of the business to a purpose-built factory in the summer of 2021 within Ipswich, increased capacity, improved efficiency and ability for growth will be a factor in this.

 

In the year ended 31 March 2024 a 5% drop in sales revenue is reported due to lower demand with one of the major accounts. This drop is expected to be reversed in the year ended 31 March 2025 as Hubbard Products has launched a strong business development plan with focus on customer portfolio diversification, stronger presence in the semi-industrial sector, expansion in the wholesaler channel and increase of export activity.

 

To this end, Hubbard Products has reinforced product development capability, prioritizing cold storage and process applications for UK market, and retail applications for export to the Middle East where Daikin Group has a strong presence.

 

Among the Blue Chip Food Retail Chains in UK, Hubbard Products’ management is busy with developing new sales channels. Wholesaler channel will be a strong focus utilizing differentiating product portfolio launched by other Group entities and promoted in UK through Hubbard Products.

 

Management is busy with restructuring plan, that includes, reinforced business development activity from sales, enhanced design and procurement capabilities for cost down, strict control of the production labour costs and an overall stream line of the organization.

 

As a result, Management is forecasting return into positive operating profitability for the year ended 31 March 2026. This will be achieved by reduction of the administration costs, improvement of GM% to healthier level while keeping market competitiveness and increase of revenue. In the same time company will aim to improve Trade Debtors Days, by approaching a more diverse customer portfolio and increasing share of intercompany activity. Trade Creditors will remain at low levels reinforcing partnerships with key suppliers.

 

Within the year, there was a focused approach to reducing stock levels from post-Covid period strategically held stock levels, with view to improve in turn cashflow.

 

Due to increases in the variable interest rate applicable on the intercompany credit facility (being the Sonia ON (Sterling Overnight Index Average variable rate) plus an intergroup margin), the interest expense has increased to £1,522,498 (2023 – £663,114).

 

Tax on loss included an income amount being a credit of £594,000 (2023 as restated – credit of £882,000) in relation to a deferred tax asset arising from receipts expected for the surrender of tax losses to other group companies.

HUBBARD PRODUCTS LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
- 2 -

Review of the business (continued)

The company has assessed its position in light of the recent imposition of tariffs announced by the United States of America. The company has not observed an impact on the UK and European market from the tariffs yet. The company and the intermediate parent company, Daikin Europe N.V. (registered in Belgium) are closely monitoring the global developments, though the scope, amount, or duration of the tariffs remain ambiguous at this stage. Daikin, as a global group, including the company, will act globally to minimise or absorb the impact of tariffs. The company's focus remains on maintaining the quality and competitiveness of our products while ensuring minimal disruption to our supply chain and customer service. Additionally, Daikin has always operated with a proximity strategy: we produce our products close to the markets we serve. Therefore, those products are not subject to any new tariffs.

 

Future developments

The company has a wide range of products under development targeting the HoReCa, Food Retail Chains and Semi-Industrial application. Focus is to be providing to the market competitive sustainable solutions for storage and process cooling aiming to improved efficiency and lower Global Warming impact. Improved functionality for reliability and serviceability and remote monitoring options are key features.

 

Going concern

Daikin Europe Coordination Center N.V., a company registered in Belgium, is a subsidiary within the Daikin Europe N.V. group, of which Hubbard Products Ltd is also a subsidiary. Daikin Europe Coordination Center N.V. has provided the company with a credit facility. As at 31 March 2024, £27,733,760 (2023: £26,113,176) had been drawn down under the facility. The credit facility was last renewed on 24 April 2025 with a ceiling on the facility of £34million. The credit facility stood at £28.31million at 30 April 2025. The credit facility agreement expires on 31 May 2026. Prior to the credit facility terminating, the directors will enter into negotiations with Daikin Europe Coordination Center N.V. to extend the facility, the directors expect that facility to be renewed. The credit facility can be terminated at any point by one months written notice.

 

The directors have prepared detailed trading and cash flow forecasts through to 31 March 2029, as explained within note 1.2. These forecasts indicate the company will remain liquid within its current facilities throughout that period.

 

Daikin Europe Coordination Center N.V. has provided written confirmation to the company of their intention to continue to provide financial support to the company, as explained within note 1.2. As the company is reliant on the financial support of a related party, Daikin Europe Coordination Center N.V. which is not contractually binding, these events or conditions indicate that a material uncertainty exists that may cast significant doubt on the company’s ability to continue as a going concern and therefore it may be unable to realise its assets and discharge its liabilities in the normal course of business. The financial statements do not include the adjustments which would result if the company was unable to continue as a going concern.

 

Following the going concern assessment made by the directors as explained within note 1.2 and with the offer of financial support in place from Daikin Europe Coordination Center N.V., the directors consider it appropriate that the financial statements are prepared on a going concern basis.

 

Principal risks and uncertainties

The going concern position of the company has been explained above. That is a principal risk.

 

The company, although currently has limited export activity, is undertaking measures to counter negative impacts from UK withdrawal from the EU, where such measures are in its control with intention to reinforce its presence in EU countries in the coming years. Also refer to the market risk section below for more details in relation to market demand, geopolitical risk and cost and inflationary pressures.

 

The Company dependence on small number of big accounts. Company has reinforced sales department and has launched intensified business development activity to start new collaborations.

HUBBARD PRODUCTS LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
- 3 -

Principal risks and uncertainties (continued)

Refrigeration Market in UK, EU and USA is regulated by legislation around refrigerants and energy efficiency. Hubbard Products has been following up closely and has consistently invested in research and development capabilities to modernise product range and be ahead of the legislation transition periods. Through a structured analysis of the market trends, the Company has taken the decisive steps towards natural refrigerants and other low GWP alternatives adopting according to the application. In addition to that, Daikin Group has launched a wide range of differentiated product range for the retail and horeca sectors that in the UK are being promoted through Hubbard Products.

 

The Company has invested in new Test Labs to be ready in 2025. These new labs will provide the necessary infrastructure to drive the future product developments. To this end, company has drafted a detailed product development plan on 3 year horizon with dedicated range for UK, EU and USA.

 

Product defect risk and warranty - the company is exposed to the risk of defective products. The company manages the risk of product defects by holding warranty provisions against sale revenue within the warranty period. Refer to note 16.

 

Financial instruments

The company uses various financial instruments which include cash and various items, such as trade debtors and trade creditors that arise directly from its operations. The main purpose of these financial instruments is to raise finance for the company's operations. The company also uses a credit facility as its main funding source, which is provided by a sister subsidiary company. See note 1.2 and 14.

The main risks arising from the company's financial instruments are market risk, cash flow, interest rate risk, credit risk and liquidity risk. The directors review and agree policies for managing each of these risks and they are summarised below. These policies have remained unchanged from the previous year.

 

Market risk

Market Demand and Geopolitical Risk. Geopolitical risk remains high and this will have an impact on investments. As a result demand is expected to be influenced on short term. However Hubbard Products operates in various different sectors in refrigeration, from small commercial and transport up to semi industrial applications for food process and pharmaceutical. This diversity, will allow for new opportunities. Under the geopolitical pressure, energy cost, material cost and labour cost may face further inflationary trends. However management has launched countermeasures supported by design and procurement initiatives and adopted strategy that is already delivering results.

Currency risk

The company has an exposure to translation and transaction foreign exchange risk. The business trades mainly in the UK and purchases some materials from continental Europe. Previous shocks in the Pound Euro exchange rate have forced Hubbard to look for alternative sourcing strategies with local distributors to limit its exposure to the risk.

 

Liquidity risk

The company seeks to manage financial risk by ensuring sufficient liquidity is available to meet foreseeable needs and to invest cash in assets safely and profitably. The company uses financing via a credit facility provided by Daikin Europe Coordination Center N.V. Refer to the going concern section above for additional information along with note 1.2 and 14.

 

Interest rate risk

The company is subject to variable rate interest rate risk. The company finances its operation via a group loan (a group credit facility). The interest rate applicable is based on a variable rate equal to Sonia ON (Sterling Overnight Index Average variable rate) plus an intergroup margin which is also a variable rate as calculated by Daikin Europe Coordination Center N.V. based upon their average margin for depositing to or funding from banks including any additional costs which they might incur for the lending activities. Accordingly Hubbard Products is confronted with variable interest rate and these have increased significantly given the increase in the Sonia interest rates since approximately April 2022. The interest which arises is added quarterly to the intercompany credit facility balance owing to Daikin Europe Coordination Center N.V. which helps the business to maintain its cash flows as the interest expense doesn't result in a cash outflow (and is reported as a non-cash transaction).

HUBBARD PRODUCTS LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
- 4 -
Financial instruments

 

Credit risk

The company's principal financial assets are cash and trade debtors. The principal credit risk arises therefore from its trade debtors. In order to manage credit risk the directors set limits for customers based on a combination of payment history and third party credit references. Credit limits are reviewed by the Financial Controller on a regular basis in conjunction with debt ageing and collection history.

 

Cash flow risk

The company needs to manage cash-flow in the company in order to meet it's debts as they fall due. Management therefore consistently monitor this and produce cash-flow forecasts to ensure there are sufficient cash reserves available in the company.

Post balance sheet events

Daikin Europe Coordination Center N.V., a company registered in Belgium, is a subsidiary within the Daikin Europe N.V. group, of which Hubbard Products Ltd is also a subsidiary. Daikin Europe Coordination Center N.V. had provided the company with a credit facility of £32 million. As at 31 March 2024, £27,733,760 (2023: £26,113,176) had been drawn down under the facility (refer to note 14 and 15). That facility was due to terminate on 31 May 2024. After the year-end the facility was renewed with a facility limit of £32 million from 1 June 2024 with a termination date of 30 September 2024. A further renewal took place with a facility limit of £34 million on 1 October 2024 with a termination date of 31 May 2025. A further renewal took place with a facility limit of £34 million on 24 April 2025 with a termination date of 31 May 2026. The credit facility can be terminated at any point by one months written notice by either the company or Daikin Europe Coordination Center N.V.

On behalf of the board

Mr I Katsoulis
Director
8 May 2025
HUBBARD PRODUCTS LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 MARCH 2024
- 5 -

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

Principal activities

The principal activity of the company continued to be that of the manufacture and marketing of commercial and light industrial refrigeration, air conditioning and heat recovery equipment for both the static and transport refrigeration market and general light engineering.

Results and dividends

The results for the year are set out on page 11.

 

Information regarding principal risks of the company are set out in the Strategic Report on page 1.

No ordinary dividends were paid. The directors do not recommend payment of a final dividend.

Directors

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

Mr P Maughan
(Resigned 13 April 2023)
Mr I Katsoulis
Mr J Umamoto
Mr F De Baets
Mr J Warmenhoven
Mr O Lagrabette
(Appointed 13 April 2023)
Strategic report

The company has chosen in accordance with Companies Act 2006, s. 414C(11) to set out in the company's strategic report information required by Large and Medium-sized Companies and Groups (Accounts and Reports) Regulations 2008, Sch. 7 to be contained in the directors' report. It has done so in respect of future developments, financial instrument - financial risk management and research and development.

Statement of disclosure to auditor

So far as each person who was a director at the date of approving this report is aware, there is no relevant audit information of which the company’s auditor is unaware. Additionally, the directors individually have taken all the necessary steps that they ought to have taken as directors in order to make themselves aware of all relevant audit information and to establish that the company’s auditor is aware of that information.

On behalf of the board
Mr I Katsoulis
Director
8 May 2025
HUBBARD PRODUCTS LIMITED
DIRECTORS' RESPONSIBILITIES STATEMENT
FOR THE YEAR ENDED 31 MARCH 2024
- 6 -

The directors are responsible for preparing the strategic report, the directors' report and the financial statements in accordance with applicable law and regulations.

 

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

 

 

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.

HUBBARD PRODUCTS LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF HUBBARD PRODUCTS LIMITED
- 7 -
Opinion on the financial statements

In our opinion the financial statements:

We have audited the financial statements of Hubbard Products Limited (“the Company”) for the year ended 31 March 2024 which comprise the Income statement, the Statement of comprehensive income, the Statement of financial position, the Statement of changes in equity, the Statement of cash flows and notes to the financial statements, including a summary of significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice).

Basis for opinion

We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditor’s responsibilities for the audit of the financial statements section of our report. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Independence

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.

Material uncertainty related to going concern

We draw attention to note 1.2 to the financial statements, which indicates that if the performance of the company is significantly below the levels currently forecast, or if other events arise which create pressures on working capital levels or funding resources, then the company may require additional funding from a related party, Daikin Europe Coordination Center N.V. in order to meet its liabilities as they fall due. The company is reliant on the financial support of Daikin Europe Coordination Center N.V. which is not contractually binding. As stated in note 1.2, these events or conditions, along with other matters as set out in note 1.2, indicate that a material uncertainty exists that may cast significant doubt on the company’s ability to continue as a going concern. Our opinion is not modified in respect of this matter.

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

 

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

Other information

The Directors are responsible for the other information. The other information comprises the information included in the Annual Report and Financial statements, other than the financial statements and our auditor’s report thereon. 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.

HUBBARD PRODUCTS LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF HUBBARD PRODUCTS LIMITED (CONTINUED)
- 8 -

Other Companies Act 2006 reporting

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

 

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

 

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

Responsibilities of directors

As explained more fully in the Directors' responsibilities statement, the Directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the Directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

 

In preparing the financial statements, the Directors are responsible for assessing the Company’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the Directors either intend to liquidate the Company or to cease operations, or have no realistic alternative but to do so.

Auditor's responsibilities for the audit of the financial statements

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

Extent to which the audit was capable of detecting irregularities, including fraud

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

 

Non-compliance with laws and regulations

Based on:

we considered the significant laws and regulations to be the applicable accounting framework including Financial Reporting Standard 102, UK tax legislation and the Companies Act 2006.

 

The Company is also subject to laws and regulations where the consequence of non-compliance could have a material effect on the amount or disclosures in the financial statements, for example through the imposition of fines or litigations. We identified such laws and regulations to be health and safety legislation, Environment regulations, primarily Electrical and electronic equipment (EEE) regulations and registration and fluorinated gas (F gas) regulations.

 

HUBBARD PRODUCTS LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF HUBBARD PRODUCTS LIMITED (CONTINUED)
- 9 -

Our procedures in respect of the above included:

 

Fraud

We assessed the susceptibility of the financial statements to material misstatement, including fraud. Our risk assessment procedures included:

- Detecting and responding to the risks of fraud; and

- Internal controls established to mitigate risks related to fraud.

 

Based on our risk assessment, we considered the areas most susceptible to fraud to be management override of controls, management bias in accounting estimates, revenue recognition and revenue cut-off.

 

Our procedures in respect of the above included:

 

We also communicated relevant identified laws and regulations and potential fraud risks to all engagement team members who were all deemed to have appropriate competence and capabilities and remained alert to any indications of fraud or non-compliance with laws and regulations throughout the audit.

Our audit procedures were designed to respond to risks of material misstatement in the financial statements, recognising that the risk of not detecting a material misstatement due to fraud is higher than the risk of not detecting one resulting from error, as fraud may involve deliberate concealment by, for example, forgery, misrepresentations or through collusion. There are inherent limitations in the audit procedures performed and the further removed non-compliance with laws and regulations is from the events and transactions reflected in the financial statements, the less likely we are to become aware of it.

 

A further description of our responsibilities is available on the Financial Reporting Council’s website at:

https://www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor’s report.

Use of our report

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

HUBBARD PRODUCTS LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF HUBBARD PRODUCTS LIMITED (CONTINUED)
- 10 -
Aphrodite Lefevre (Senior Statutory Auditor)
For and on behalf of BDO LLP, Statutory Auditor
13 May 2025
Norwich, UK
BDO LLP is a limited liability partnership registered in England and Wales (with registered number OC305127).
HUBBARD PRODUCTS LIMITED
INCOME STATEMENT
FOR THE YEAR ENDED 31 MARCH 2024
- 11 -
2024
2023
as restated
Notes
£
£
Turnover
3
21,750,301
22,892,119
Cost of sales
(19,279,047)
(20,459,076)
Gross profit
2,471,254
2,433,043
Distribution costs
(1,375,487)
(1,404,833)
Administrative expenses
(3,315,806)
(3,010,347)
Operating loss
4
(2,220,039)
(1,982,137)
Interest payable and similar expenses
8
(1,522,498)
(663,114)
Loss before taxation
(3,742,537)
(2,645,251)
Tax on loss
9
595,895
900,387
Loss for the financial year
(3,146,642)
(1,744,864)

The income statement has been prepared on the basis that all operations are continuing operations.

HUBBARD PRODUCTS LIMITED
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 MARCH 2024
- 12 -
2024
2023
as restated
£
£
Loss for the year
(3,146,642)
(1,744,864)
Other comprehensive income
-
-
Total comprehensive expense for the year
(3,146,642)
(1,744,864)
HUBBARD PRODUCTS LIMITED
STATEMENT OF FINANCIAL POSITION
AS AT
31 MARCH 2024
31 March 2024
- 13 -
2024
2023
as restated
Notes
£
£
£
£
Fixed assets
Goodwill
10
78,942
104,545
Other intangible assets
10
426,181
576,597
Total intangible assets
505,123
681,142
Tangible assets
11
4,808,366
5,121,584
5,313,489
5,802,726
Current assets
Stocks
12
6,629,726
7,181,775
Debtors
13
4,044,370
6,041,877
10,674,096
13,223,652
Creditors: amounts falling due within one year
14
(30,090,888)
(29,704,265)
Net current liabilities
(19,416,792)
(16,480,613)
Total assets less current liabilities
(14,103,303)
(10,677,887)
Provisions for liabilities
Provisions
16
211,245
490,019
(211,245)
(490,019)
Net liabilities
(14,314,548)
(11,167,906)
Capital and reserves
Called up share capital
19
100,000
100,000
Profit and loss reserves
(14,414,548)
(11,267,906)
Total equity
(14,314,548)
(11,167,906)

The notes on pages 16 to 34 form part of these financial statements.

These financial statements have been prepared in accordance with the provisions relating to medium-sized companies.

The financial statements were approved by the board of directors and authorised for issue on 8 May 2025 and are signed on its behalf by:
Mr I  Katsoulis
Director
Company registration number 06217134 (England and Wales)
HUBBARD PRODUCTS LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 MARCH 2024
- 14 -
Share capital
Profit and loss reserves
Total
as restated
as restated
£
£
£
As restated for the period ended 31 March 2023:
Balance at 1 April 2022
100,000
(9,523,042)
(9,423,042)
Year ended 31 March 2023:
Loss and total comprehensive expense for the year as restated - see note 25 and 26
-
(1,744,864)
(1,744,864)
Balance at 31 March 2023 as restated - see note 25 and 26
100,000
(11,267,906)
(11,167,906)
Year ended 31 March 2024:
Loss and total comprehensive expense for the year
-
(3,146,642)
(3,146,642)
Balance at 31 March 2024
100,000
(14,414,548)
(14,314,548)

The notes on pages 16 to 34 form part of these financial statements.

HUBBARD PRODUCTS LIMITED
STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 MARCH 2024
- 15 -
2024
2023
as restated
Notes
£
£
£
£
Cash flows from operating activities
Cash generated from/(absorbed by) operations
24
954,941
(1,957,753)
Income taxes refunded
1,895
18,387
Net cash inflow/(outflow) from operating activities
956,836
(1,939,366)
Investing activities
Purchase of tangible fixed assets
-
0
(301,528)
Net cash used in investing activities
-
(301,528)
Financing activities
(Repayments of) / proceeds from loan owed to group undertakings
25
(956,836)
2,240,894
Net cash (used in)/generated from financing activities
(956,836)
2,240,894
Net increase in cash and cash equivalents
-
0
-
0
Cash and cash equivalents at beginning of year
-
0
-
0
Cash and cash equivalents at end of year
-
0
-
0
HUBBARD PRODUCTS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2024
- 16 -
1
Accounting policies
Company information

Hubbard Products Limited is a private company limited by shares incorporated in England and Wales. The registered office is 4 Crane Boulevard, Ipswich, IP3 9SQ. The company registration number is 06217134.

1.1
Accounting convention

These financial statements have been prepared in accordance with FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” (“FRS 102”) and the requirements of the Companies Act 2006.

The financial statements are prepared in sterling, which is the functional currency of the company. Monetary amounts in these financial statements are rounded to the nearest £.

The financial statements have been prepared under the historical cost convention. The principal accounting policies adopted are set out below.

1.2
Going concern

As at the balance sheet date the company had net liabilities of £14,314,548 (2023 net liabilities: £11,167,906) and had net current liabilities of £19,416,792 (2023 net current liabilities: £16,480,613). The company made a loss for the year of £3,146,642 (2023: Loss of £1,744,864). true

 

Daikin Europe Coordination Center N.V., a company registered in Belgium, is a subsidiary within the Daikin Europe N.V. group, of which Hubbard Products Ltd is also a subsidiary. Daikin Europe Coordination Center N.V. has provided the company with a credit facility. As at 31 March 2024, £27,733,760 (2023: £26,113,176) had been drawn down under the facility, which at the year end had a facility limit of £32 million. The credit facility was last renewed on 24 April 2025 with a ceiling on the facility of £34million. The credit facility agreement expires on 31 May 2026. Prior to the credit facility terminating, the directors will enter into negotiations with Daikin Europe Coordination Center N.V. to extend the facility, the directors expect that facility to be renewed. The credit facility can be terminated at any point by one months written notice by either the company or Daikin Europe Coordination Center N.V.

 

The directors have prepared detailed trading and cash flow forecasts through to 31 March 2029 as the group which the company is part of require forecasts that extend to that period. In making their going concern assessment therefore, the directors have considered a period of at least 12 months from the date the financial statements will be authorised for issue. The directors have reviewed the company’s working capital requirements, compared to the funding resources available. The directors have also taken into consideration the effects that the cost of living crisis, increasing interest rates, the recent imposition of tariffs announced by the United States of America and the ongoing conflict in Ukraine, may have on the company, and on the ability of Daikin Europe Coordination Center N.V. to provide the pledged financial support to the company.

 

These forecasts indicate the company will remain liquid within its current facilities throughout that period. The credit facility stood at £28.31million at 30 April 2025.

 

The directors have not prepared a ‘stress test’ on the forecasts, on the basis that any credit facility extension above the agreed limit of £34million has to be duly motivated and agreed by Daikin Europe Coordination Center N.V. The directors take any actions possible to avoid requesting an increase in the credit facility limit, which is an option of last resort.

 

The credit facility is secured by a guarantee provided by the intermediate parent company, Zanotti S.p.A, a company registered in Italy.

 

Accordingly, the company is dependent upon the financial support by way of the credit facility provided by Daikin Europe Coordination Center N.V. in order to meet its funding requirements. And the company is dependent upon that credit facility being renewed at an appropriate ceiling facility level, allowing it to meet its funding requirements, when it expires on 31 May 2026.

HUBBARD PRODUCTS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
1
Accounting policies
(Continued)
- 17 -

Daikin Europe Coordination Center N.V. has provided written confirmation to the directors of the company of their intention to continue to provide financial support to the company for a period of 12 months from the date the directors sign the financial statements of the company for the 31 March 2024 year end. This offer is to provide sufficient financial support to enable the company to continue to pay normal operating expenses as they fall due, to allow it to continue to trade for a period of 12 months from the date these financial statements are approved by the directors.

 

If the performance of the company is significantly below the levels currently forecast, or if other events arise which create pressures on working capital levels or funding resources, then the company may require additional funding from Daikin Europe Coordination Center N.V. in order to meet its liabilities as they fall due. As the company is reliant on the financial support of a related party, Daikin Europe Coordination Center N.V. which is not contractually binding as the credit facility can be terminated at any point by one months written notice, these events or conditions indicate that a material uncertainty exists that may cast significant doubt on the company’s ability to continue as a going concern and therefore it may be unable to realise its assets and discharge its liabilities in the normal course of business. The financial statements do not include the adjustments which would result if the company was unable to continue as a going concern.

 

Following the going concern assessment made by the directors as explained above, and with the offer of financial support in place from Daikin Europe Coordination Center N.V., the directors consider it appropriate that the financial statements are prepared on a going concern basis.

1.3
Turnover

Turnover represents sales to third parties excluding value added tax and comprises sales of machines and machine parts, the provision of machine services and the sale of maintenance contracts.

Turnover is the total amount receivable by the Company for goods supplied and services provided to customers during the year, excluding value added tax and net of trade discounts.

Sale of goods – Revenue from the sale of goods is recognised when the significant risks and benefits of ownership have been transferred to the buyer. The Company recognises revenue from the sale of goods when all the following conditions are satisfied:

 

When these criteria are met depends upon the terms of the sale of the goods, which may include Ex-works which are collections arranged by the customer and the significant risks and rewards of ownership are considered to transfer at the point of collection, or DAP (delivery at place) when the significant risks and rewards of ownership transfer following delivery. In certain circumstances, the buyer agrees through vesting documents to the transfer of the significant risks and rewards of ownership once the goods are complete and awaiting collection from the company premises.

Revenue from providing one off services and maintenance is recognised at the point the maintenance / service is provided. In respect of maintenance and service contracts, revenue is recognised monthly on a straight-line basis over the contract term.

1.4
Research and development expenditure

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

HUBBARD PRODUCTS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
1
Accounting policies
(Continued)
- 18 -
1.5
Intangible fixed assets - goodwill

Positive purchased goodwill arising on acquisitions is capitalised and amortised over its useful economic life of 20 years. In relation to the purchased goodwill arising on acquisitions, that related to acquiring a manufacturing business in May 2007. The manufacturing business had been trading since the 1960s under the name Hubbard. The amortisation period was initially set at 6 years. In 2010 the directors revised their estimate and determined the goodwill to have a useful economic life of 20 years from the date of acquisition given the business had been in existence for a significant number of years. Accordingly the amortisation policy was revised to 20 years from acquisition date, and the remaining carrying value at that date was amortised over the remaining useful economic life.

1.6
Intangible fixed assets other than goodwill

Intangible assets acquired separately from a business are recognised at cost and are subsequently measured at cost less accumulated amortisation and accumulated impairment losses.

 

Intangible assets acquired on business combinations are recognised separately from goodwill at the acquisition date where it is probable that the expected future economic benefits that are attributable to the asset will flow to the entity and the fair value of the asset can be measured reliably; the intangible asset arises from contractual or other legal rights; and the intangible asset is separable from the entity.

Amortisation is recognised so as to write off the cost or valuation of assets less their residual values over their useful lives on the following bases:

Software
5 years straight line

The company has chosen a five-year amortisation period for the software based on its expected useful economic life, reflecting the anticipated period over which the software will provide economic benefits and remain technologically relevant.

 

At 31 March 2024 the remaining amortisation period of the software was 2.83 years.

1.7
Tangible fixed assets

Tangible fixed assets are initially measured at cost and subsequently measured at cost, net of depreciation and any impairment losses.

Depreciation is recognised so as to write off the cost or valuation of assets less their residual values over their useful lives on the following bases:

Land and buildings - short leasehold
over the lease term
Plant and machinery
3 to 12 years straight line
Fixtures and fittings
3 to 5 years straight line

Assets under construction are not depreciated until they are brought into use. Assets under construction relate to research and development bays at the company's premises where construction was not complete at the year end.

 

The gain or loss arising on the disposal of an asset is determined as the difference between the sale proceeds and the carrying value of the asset, and is credited or charged to profit or loss.

HUBBARD PRODUCTS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
1
Accounting policies
(Continued)
- 19 -
1.8
Impairment of fixed assets

At each reporting period end date, the company reviews the carrying amounts of its tangible and intangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where it is not possible to estimate the recoverable amount of an individual asset, the company estimates the recoverable amount of the cash-generating unit to which the asset belongs.

Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.

1.9
Stocks

Stocks are stated at the lower of cost and estimated selling price less costs to complete and sell. Cost comprises direct materials and, where applicable, direct labour costs and those overheads that have been incurred in bringing the stocks to their present location and condition. Cost is based on the weighted average for purchased parts; manufactured parts are calculated at standard cost based on bill of material and rate routings of production time.

At each reporting date, an assessment is made for impairment. Any excess of the carrying amount of stocks over its estimated selling price less costs to complete and sell is recognised as an impairment loss in profit or loss. Reversals of impairment losses are also recognised in profit or loss.

1.10
Cash and cash equivalents

Cash at bank and in hand are basic financial assets and include cash in hand and deposits held at call with banks.

1.11
Financial instruments

The company has elected to apply the provisions of Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instruments Issues’ of FRS 102 to all of its financial instruments.

 

Financial instruments are recognised in the company's statement of financial position when the company becomes party to the contractual provisions of the instrument.

 

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

Basic financial assets

Basic financial assets, which include debtors and cash and bank balances, are initially measured at transaction price including transaction costs and are subsequently carried at amortised cost using the effective interest method. Financial assets classified as receivable within one year are not amortised.

Impairment of financial assets

Financial assets, other than those held at fair value through profit and loss, are assessed for indicators of impairment at each reporting end date.

 

Financial assets are impaired where there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial asset, the estimated future cash flows have been affected. If an asset is impaired, the impairment loss is the difference between the carrying amount and the present value of the estimated cash flows discounted at the asset’s original effective interest rate. The impairment loss is recognised in profit or loss.

HUBBARD PRODUCTS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
1
Accounting policies
(Continued)
- 20 -
Derecognition of financial assets

Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire or are settled, or when the company transfers the financial asset and substantially all the risks and rewards of ownership to another entity, or if some significant risks and rewards of ownership are retained but control of the asset has transferred to another party that is able to sell the asset in its entirety to an unrelated third party.

Classification of financial liabilities

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

Basic financial liabilities

Basic financial liabilities, including creditors and loans from fellow group companies, are initially recognised at transaction price unless the arrangement constitutes a financing transaction, where the debt instrument is measured at the present value of the future payments discounted at a market rate of interest. Financial liabilities classified as payable within one year are not amortised.

 

Debt instruments are subsequently carried at amortised cost, using the effective interest rate method.

 

Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Amounts payable are classified as creditors: amounts falling due within one year if payment is due within one year or less. If not, they are presented as creditors: amounts falling due after more than one year. Trade and other creditors are recognised initially at transaction price and subsequently measured at amortised cost using the effective interest method.

Derecognition of financial liabilities

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

1.12
Equity instruments

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

1.13
Taxation

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

Current tax

The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the income statement because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The company’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.

HUBBARD PRODUCTS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
1
Accounting policies
(Continued)
- 21 -
Deferred tax

Deferred tax liabilities are generally recognised for all timing differences and deferred tax assets are recognised to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits. Such assets and liabilities are not recognised if the timing difference arises from goodwill or from the initial recognition of other assets and liabilities in a transaction that affects neither the tax profit nor the accounting profit.

 

The carrying amount of deferred tax assets is reviewed at each reporting end date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realised. Deferred tax is charged or credited in the income statement. Deferred tax assets and liabilities are offset when the company has a legally enforceable right to offset current tax assets and liabilities and the deferred tax assets and liabilities relate to taxes levied by the same tax authority.

1.14
Provisions

Provisions are recognised when the company has a legal or constructive present obligation as a result of a past event, it is probable that the company will be required to settle that obligation and a reliable estimate can be made of the amount of the obligation.

 

The amount recognised as a provision is the best estimate of the consideration required to settle the present obligation at the reporting end date, taking into account the risks and uncertainties surrounding the obligation. Where the effect of the time value of money is material, the amount expected to be required to settle the obligation is recognised at present value.

1.15
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.

1.16
Retirement benefits

The company operates a Group Personal Pension Scheme on behalf of it's employees. The pension charge in the profit and loss account represents the amounts payable by the company to the individual policyholders in respect of the year.

1.17
Leases

Rentals payable under operating leases, including any lease incentives received, are charged to profit or loss on a straight line basis over the term of the relevant lease except where another more systematic basis is more representative of the time pattern in which economic benefits from the leases asset are consumed.

 

Operating lease incentives (rent free periods) are spread over the lease term as a reduction to the lease expense.

1.18
Foreign exchange

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

HUBBARD PRODUCTS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
- 22 -
2
Judgements and key sources of estimation uncertainty

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

 

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

 

In preparing these financial statements, the directors have made the following judgements: Determine when the significant risks and rewards have transferred to the customer and accordingly when a sale is recognised. Refer to note 1.3; Determine whether there are indicators of impairment of the Company’s tangible assets. Factors taken into consideration in reaching such a decision include the economic viability and expected future financial performance of the asset and where it is a component of a larger cash-generating unit, the viability and expected future performance of that unit.

 

Warranty provision

The provision for warranty costs represents the director's estimate of the likely future payments on the company's products. Refer to note 16 for details of the warranty provision.

 

Stock provision

The company sells manufactured refrigeration equipment which is subject to changing consumer demands and technological advancements. As a result it is necessary to consider the recoverability of the cost of the stock and the associated provisioning required. When calculating the provision, management considers the nature and age of the stock as well as applying assumptions around anticipated saleability of stock. Refer to note 12 for the carrying value of stocks at year end.

 

Bad debt provision

The company makes an estimate of the recoverable value of trade and other debtors. When assessing impairment of trade and other debtors, management considers factors including the current credit rating of the debtor, the ageing profile of debtors, whether covered by insurance and historical experience.

 

Impairment of Tangible and Intangible Assets

The key assumptions applied within the discounted cash flow included: determining the underlying future cash flow forecasts, based upon the Directors' best estimates; the application of a suitable discount rate, the Directors applied a discount rate of 11.6% to a five year cash flow and including a terminal value (with a terminal valve growth rate of 2% being applied).

 

 

3
Turnover

An analysis of the company's turnover is as follows:

2024
2023
as restated
£
£
Turnover analysed by class of business
Sale of goods
20,848,065
21,978,455
Service and maintenance
902,236
913,664
21,750,301
22,892,119
HUBBARD PRODUCTS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
3
Turnover
(Continued)
- 23 -
2024
2023
£
£
Turnover analysed by geographical market
United Kingdom
21,243,191
22,030,747
Europe
367,453
375,073
Rest of the World
139,657
486,299
21,750,301
22,892,119
4
Operating loss
2024
2023
Operating loss for the year is stated after charging/(crediting):
£
£
Exchange (gains)/losses
(3,260)
13,081
Research and development costs
37,338
41,429
Depreciation of owned tangible fixed assets
313,218
327,932
Amortisation of intangible assets
176,019
179,187
Operating lease charges
690,501
610,230
5
Auditor's remuneration
2024
2023
Fees payable to the company's auditor and associates:
£
£
For audit services
Audit of the financial statements of the company
90,950
50,000
6
Directors' remuneration
2024
2023
as restated
£
£
Remuneration for qualifying services
362,622
323,087
Company pension contributions to defined contribution schemes
9,543
8,250
Termination benefits
97,140
-
Termination benefits (Company pension contributions to defined contribution schemes)
72,900
-
542,205
331,337

There were 2 directors in the Company's defined contribution pension scheme during the year (2023 : one)

The total amount payable to the highest paid director in respect of emoluments was £358,146 (2023: £323,087). Company pension contributions of £9,543 (2023: £8,250) were made to a defined contribution scheme on their behalf.
HUBBARD PRODUCTS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
- 24 -
7
Employees

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

2024
2023
Number
Number
Production
141
136
Selling and distribution
19
20
Administration
26
26
Total
186
182

Their aggregate remuneration comprised:

2024
2023
£
£
Wages and salaries
6,183,760
5,900,393
Social security costs
577,849
568,230
Pension costs
300,075
227,500
7,061,684
6,696,123
8
Interest payable and similar expenses
2024
2023
Notes
£
£
Interest on financial liabilities measured at amortised cost:
Interest payable to group undertakings on credit facility intercompany loan
14 & 15
1,522,498
663,114
9
Taxation
2024
2023
as restated
£
£
Current tax
Adjustments in respect of prior periods
(1,895)
(18,387)
Deferred tax
Origination and reversal of timing differences
(594,000)
(882,000)
Total tax credit
(595,895)
(900,387)
HUBBARD PRODUCTS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
9
Taxation
(Continued)
- 25 -

The actual credit for the year can be reconciled to the expected credit for the year based on the profit or loss and the standard rate of tax as follows:

2024
2023
as restated
£
£
Loss before taxation
(3,742,537)
(2,645,251)
Expected tax credit based on the standard rate of corporation tax in the UK of 25.00% (2023: 19.00%)
(935,634)
(502,598)
Tax effect of expenses that are not deductible in determining taxable profit
4,312
1,295
Adjustments in respect of prior years
(1,895)
(18,387)
Deferred tax not recognised
931,322
621,616
Group relief - losses surrendered and corresponding deferred tax asset recognised
(594,000)
(882,000)
Remeasurement of deferred tax for changes in tax rates
-
0
(120,313)
Taxation credit for the year
(595,895)
(900,387)

A deferred tax asset has been recognised at 31 March 2024 of £594,000 (2023: as restated – £882,000) in relation to the surrender of losses for group relief which the company expects to be paid for.

 

At 31 March 2024, the company has tax losses available to carry forward of £8,310,520 (2023: £7,461,032), fixed asset timing differences of £1,655,270 (2023: £1,167,114) and short-term timing differences of (£21,101) (2023: (£31,598)). When measured at 25%, the company has a potential net deferred tax asset of £1,669,088 (2023: £1,581,379 at 25%) in respect of trading losses, accelerated capital allowances and short term timing difference. This potential deferred tax asset has not been recognised as it is not considered probable that it will be recovered against the reversal of deferred tax liabilities or other future taxable profits. In relation to the unrecognised deferred tax asset, in respect of potential future surrender of losses for group relief for which the company may be paid for (beyond the deferred tax asset of £594,000 which has already been recognised as explained above), no further group relief surrenders had been made at year-end, and there was not sufficient certainty regarding future group relief surrender and any related amounts receivable to support recognition of an asset. Accordingly no further deferred tax asset has been recognised.

HUBBARD PRODUCTS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
- 26 -
10
Intangible fixed assets
Goodwill
Software
Intellectual Property
Total
£
£
£
£
Cost
At 1 April 2023 and 31 March 2024
833,489
727,014
298,147
1,858,650
Amortisation and impairment
At 1 April 2023
728,944
150,417
298,147
1,177,508
Amortisation charged for the year
25,603
150,416
-
0
176,019
At 31 March 2024
754,547
300,833
298,147
1,353,527
Carrying amount
At 31 March 2024
78,942
426,181
-
0
505,123
At 31 March 2023
104,545
576,597
-
0
681,142

Amortisation of intangible fixed assets is included in administrative expenses.

11
Tangible fixed assets
Land and buildings - short leasehold
Assets under construction
Plant and machinery
Fixtures and fittings
Total
£
£
£
£
£
Cost
At 1 April 2023 and 31 March 2024
3,848,229
850,993
1,118,408
186,650
6,004,280
Depreciation and impairment
At 1 April 2023
333,716
-
0
459,456
89,524
882,696
Depreciation charged in the year
195,791
-
0
82,146
35,281
313,218
At 31 March 2024
529,507
-
0
541,602
124,805
1,195,914
Carrying amount
At 31 March 2024
3,318,722
850,993
576,806
61,845
4,808,366
At 31 March 2023
3,514,513
850,993
658,952
97,126
5,121,584
12
Stocks
2024
2023
£
£
Raw materials, consumables and work in progress
4,907,238
6,194,984
Finished goods and goods for resale
1,722,488
986,791
6,629,726
7,181,775
HUBBARD PRODUCTS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
12
Stocks
(Continued)
- 27 -

Raw materials, consumables and work in progress includes an amount of £451,205 (2023 – £535,904) in relation to subassemblies which is the directors best estimate of the work in progress element of stock at year end.

 

An impairment loss of £21,182 (2023 - loss of £238,710) was recognised in cost of sales against stock during the period due to slow-moving and obsolete stock. There are no stock pledged as security for liabilities.

13
Debtors
2024
2023
as restated
Amounts falling due within one year:
£
£
Trade debtors
2,913,024
4,144,379
Amounts owed by group undertakings
133,264
203,138
Other debtors
7,600
285,748
Prepayments and accrued income
396,482
526,612
3,450,370
5,159,877
Deferred tax asset (note 17)
594,000
882,000
4,044,370
6,041,877
14
Creditors: amounts falling due within one year
2024
2023
as restated
Notes
£
£
Other borrowings owed to group undertakings
15
27,733,760
26,113,176
Trade creditors
975,778
1,729,407
Amounts owed to group undertakings
301,395
446,799
Taxation and social security
434,312
572,238
Accruals and deferred income
645,643
842,645
30,090,888
29,704,265
15
Loans and overdrafts
2024
2023
£
£
Loans owed to group undertakings
27,733,760
26,113,176
Payable within one year
27,733,760
26,113,176
HUBBARD PRODUCTS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
15
Loans and overdrafts
(Continued)
- 28 -

Included within loans owed to group undertakings is a credit facility agreement with a sister subsidiary, Daikin Europe Coordination Center NV, amounting to £27,733,760 (2023: £26,113,176). This credit facility accrues interest based on a variable rate equal to Sonia ON (Sterling Overnight Index Average variable rate) plus an intergroup margin which is also a variable rate. Refer to the strategic report for more information. Zanotti S.p.A, a company registered in Italy, which is the immediate parent company, has provided a corporate guarantee to Daikin Europe Coordination Center N.V. in respect of the credit facility as security. The credit facility can be terminated at any point by one months written notice by either the company or Daikin Europe Coordination Center N.V.

 

16
Provisions for liabilities
2024
2023
£
£
Warranty provision
211,245
490,019
Movements on provisions:
Warranty provision
£
At 1 April 2023
490,019
Additional provisions in the year
148,124
Utilisation of provision
(285,632)
Released in year
(141,266)
At 31 March 2024
211,245

The provision for warranty represents the directors' estimate of the likely future payments on the company's products sold which are within the warranty period which is mostly one year with certain products being under a three-year warranty. The provision is expected to be utilised within this period or released unused as it expires.

 

The company has a dilapidation provision for short leasehold premises of £89,981 (2023 – £330,722) which is included within accruals and deferred income. The provision at 31 March 2024 relates to a property with a lease expiring in 2041, which is when the provision is expected to be utilised.

HUBBARD PRODUCTS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
- 29 -
17
Deferred taxation

Deferred tax assets and liabilities are offset where the company has a legally enforceable right to do so. The following is the analysis of the deferred tax balances (after offset) for financial reporting purposes:

Liabilities
Liabilities
Assets
Assets
2024
2023
2024
2023
as restated
as restated
Balances:
£
£
£
£
Accelerated capital allowances
(413,818)
(460,002)
-
-
Tax losses
405,785
454,797
594,000
882,000
Short term timing differences
8,033
5,205
-
-
Amount recognised as an asset/(liability) at year end
-
-
594,000
882,000
2024
Movements in the year:
£
Asset at 1 April 2023 (as restated)
(882,000)
Utilisation of asset brought forward (receipt in relation to group relief surrender of losses)
882,000
Credit to profit or loss arising from group relief surrender of losses in year
(594,000)
Asset at 31 March 2024
(594,000)

The deferred tax asset recognised of £594,000 (2023 as restated – asset £882,000) is expected to reverse in the next year with a receipt in relation to group relief surrender of losses. The deferred tax liability of nil (being ACAs and timing differences shown above offset by tax losses) will unwind/reverse in line with the depreciation of fixed assets and related capital allowances that would mature within the same period.

In relation to tax losses there are additional tax losses of £6,687,380, equating to a potential deferred tax asset at 25% of £1,671,845. No deferred tax asset has been recognised as it is not probable that they will be recovered against the reversal of deferred tax liabilities or future taxable profits. There were no agreements in place at year-end in respect of any group relief loss surrenders beyond those already recognised as an asset, and accordingly no additional assets have been recognised for potential future group relief surrenders.

18
Retirement benefit schemes
2024
2023
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
300,093
226,962

The company operates a defined contribution pension scheme for all qualifying employees. The assets of the scheme are held separately from those of the company in an independently administered fund. Pension contributions totalling £38,435 (2023 – £36,996) were payable to the pension fund at the reporting date and are included in creditors (accruals and deferred income).

HUBBARD PRODUCTS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
- 30 -
19
Share capital
2024
2023
2024
2023
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary Shares of £1 each
100,000
100,000
100,000
100,000

All shares have full voting rights and full rights to participate in any distribution (including on a dividend and on winding up). The ordinary shares are not redeemable.

20
Operating lease commitments
Lessee

The company enters into a number of operating lease agreements for use of buildings and other equipment. These are all standard operating lease arrangements which will not result in the company owning the asset.

At the reporting end date the company had outstanding commitments for future minimum lease payments under non-cancellable operating leases, which fall due as follows:

2024
2023
£
£
Within one year
687,387
689,296
Between two and five years
2,461,060
2,404,131
In over five years
6,818,164
7,384,534
9,966,611
10,477,961
21
Capital commitments

Amounts contracted for but not provided in the financial statements:

2024
2023
£
£
Acquisition of tangible fixed assets
503,967
503,967
22
Related party transactions
Remuneration of key management personnel

The remuneration of key management personnel is as follows.

2024
2023
£
£
Aggregate compensation
566,321
331,337
Other information
HUBBARD PRODUCTS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
22
Related party transactions
(Continued)
- 31 -

The company has taken advantage of the exemption available in section 33.1A Financial Reporting Standard 102 whereby it has not disclosed transactions with the ultimate parent company or any wholly owned subsidiary undertaking within the group.

 

At 31 March 2024 £3,900 was owed to the company by a director in respect of employee expenses recoverable (31 March 2023: £3,900).

23
Ultimate controlling party

The immediate parent company is Zanotti Spa, a company registered in Italy. The company is under the control of an intermediate parent company Daikin Europe NV which is the smallest group to consolidate these financial statements. Copies of these group financial statements are available from the registered office, Zandvoordestraat 300, 8400 Oostende, Belgium.

 

The ultimate parent undertaking and controlling party is Daikin Industries Limited, a company registered in Japan. Daikin Industries Limited is the parent undertaking of the largest group to consolidate these financial statements. Copies of the group financial statements are available from Umeda Center Building, 2-4-12, Nakazaki-Nishi, Kita-ku, Osaka 530-8323, Japan, which is also their registered office.

24
Cash generated from/(absorbed by) operations
2024
2023
as restated
£
£
Loss for the year after tax
(3,146,642)
(1,744,864)
Adjustments for:
Taxation credited
(595,895)
(900,387)
Finance costs
1,522,498
663,114
Amortisation and impairment of intangible assets
176,019
179,187
Depreciation and impairment of tangible fixed assets
313,218
327,932
Decrease in provisions
(278,774)
(430,392)
Movements in working capital:
Decrease/(increase) in stocks
552,049
(1,660,449)
Decrease in debtors
1,639,633
247,882
Decrease in creditors
(1,088,557)
(917,533)
(Increase)/decrease in group intercompany debtors
(2,075,656)
(2,718,962)
Increase in group intercompany creditors
3,937,048
4,996,719
Cash generated from/(absorbed by) operations
954,941
(1,957,753)
HUBBARD PRODUCTS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
- 32 -
25
Analysis of changes in net debt
1 April 2023
Cash flows
Non cash movements
31 March 2024
£
£
£
£
Loans owed to group undertakings
(26,113,176)
956,836
(2,577,420)
(27,733,760)

Non-cash movements: (£1,522,498) relates to the interest expense arising on the intercompany credit facility which is not paid in cash and is credited directly to the intercompany credit facility loan account. It also includes £882,000 receivable in relation to the surrender of tax losses for group relief. The proceeds receivable were debited directly to the intercompany account. It also includes £2,145,530 in relation to intercompany debtors being settled and (£4,082,452) in relation to intercompany creditors being settled as these proceeds and payments were settled directly through the intercompany account rather than in cash.

26
Prior period adjustment
Reconciliation of changes in equity
1 April
31 March
2022
2023
Notes
£
£
Adjustments to prior year
Taxation
9,17
-
882,000
Equity as previously reported
(9,423,042)
(12,049,906)
Equity as adjusted
(9,423,042)
(11,167,906)
Analysis of the effect upon equity
Profit and loss reserves
-
882,000
Reconciliation of changes in loss for the previous financial period
2023
Notes
£
Adjustments to prior year
Taxation
9,17
882,000
Loss as previously reported
(2,626,864)
Loss as adjusted
(1,744,864)
HUBBARD PRODUCTS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
26
Prior period adjustment
(Continued)
- 33 -
Notes to reconciliation

The following prior period adjustments have been made to correct errors in the previous year.

 

Taxation

A deferred tax asset has been recognised as at 31 March 2023 of £882,000 in respect of losses which were group relieved in that year to other group companies, for which company expects to receive payment of that amount for the losses surrendered. This had not previously been recognised as an asset in error. The effect of the adjustment in 2023 and 31 March 2023 is: a credit to the tax on loss in respect of deferred tax in the income statement of £882,000; a deferred tax asset recognised of £882,000 within Debtors amounts falling due within one year.

 

The statement of changes in equity has been restated with a reduction in the reported loss and total comprehensive expense for the year of £882,000. Total equity at 31 March 2023 and the profit and loss reserves at 31 March 2023 have increased by £882,000.

 

The following notes have been restated: Note 9 (taxation); Note 13 (Debtors Amounts falling due within one year); Note 17 (deferred taxation); Note 24 (cash absorbed by operations).

 

Statement of cash flows

The statement of cash flows was incorrectly presented and has been restated as follows: Interest paid was incorrectly shown: As a cash outflow of £663,114 in arriving at cash outflow from operating activities; As a cash inflow as interest on borrowings within financing activities of £663,114. These two amounts have been amended to nil within the statement of cash flows. This is because the interest expense relates to interest on the intercompany credit facility, which is not paid in cash, rather it is credited to the intercompany loan balance/credit facility which is shown as/credit facility which is shown within creditors: amounts falling due within one year as other borrowings owed to group undertakings, and accordingly is a non-cash transaction. Net cash outflow from operating activities reduced by £663,114 and net cash generated from financing activities reduced by £663,114.

 

Turnover disclosure (note 3)

Note 3 has been restated to show a more detailed analysis of the company’s turnover by class of business as follows: Sale of goods of £21,978,455; Service and maintenance £913,664. Total turnover reported has not changed.

 

Directors’ remuneration (note 6)

Directors’ remuneration within note 6 has been restated as it did not provide a breakdown of directors remuneration and amounts paid to the highest director. This is restated to show: qualifying services of £323,087 and company pension contributions to defined contribution schemes of £8,250 separately; and to show the amounts payable to the highest paid director separately of remuneration for qualifying services of £323,087 and company pension contributions to defined contribution schemes of £8,250. The total of the directors remuneration and highest-paid director disclosures reported did not change.

 

Amounts owed (to) / from group undertakings falling due within one year

At 31 March 2023 amounts owed to group undertakings which were previously stated at £243,661 were presented on a net basis in error. As there was no legally enforceable right to set of the intercompany debtor and creditor balances with the group companies, the balances have been restated to present them on a gross basis at 31 March 2023.

 

The effect of these adjustments at 31 March 2023 was: Amounts owed to group undertakings falling due within one year increased by £203,138. Amounts owed by group undertakings falling due within one year increased by £203,138. Debtors and creditors: amounts falling due within one year on the statement of financial position have been restated. Notes 13 and 14 have been restated. There was no overall change to net current liabilities or net liabilities or to the income statement or the statement of comprehensive income.

 

HUBBARD PRODUCTS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
26
Prior period adjustment
(Continued)
- 34 -

The effect of these adjustments at 1 April 2022 (which has been explained as that impacts on working capital movements reported within note 24) was: Amounts owed to group undertakings falling due within one year increased by £275,783. Amounts owed by group undertakings falling due within one year increased by £275,783. There was no overall change to the profit and loss reserve brought forward at 1 April 2022.

 

Intercompany debtor and creditor balances falling due within one year – non-cash transactions, statement of cash flows and Cash generated from / (absorbed by) operations

Further to the adjustment above in respect of intercompany debtor and creditor balances falling due within one year, which were incorrectly presented on a net basis, these balances relate to trading receivables and payables. From a cash flow perspective some of these balances are settled as non-cash transactions through the credit facility agreement with a sister subsidiary, Daikin Europe Coordination Center NV, and the liability under that facility is shown within creditors: amounts falling due within one year as Other borrowings owed to group undertakings. In error in the prior year note 24 and the statement of cash flows did not reflect these non-cash transactions.

 

The non-cash transactions which were not properly reflected were £2,791,608 in relation to intercompany debtors and (£6,396,058) in relation to intercompany creditors, as these proceeds and payments were settled directly through the intercompany account as a non-cash transaction, rather than in cash.

 

Note 24 movements in working capital has been restated as follows: (1) decrease in creditors which was previously included at (£1,581,112) has been reduced by £663,579 to show a (decrease) in creditors of (£917,533) (2) Amounts owed by group undertakings (increase) of (£2,718,962) which was not previously presented and (3) Amounts owed to group undertakings decrease of £4,996,719 which was not previously presented. Cash (absorbed by) operations decreased by £2,941,336 and is now restated at (£1,957,753).

 

The statement of cash flows has been restated as follows: Cash (absorbed by) operations decreased by £2,941,336 and is now restated at (£1,957,753). Net cash outflow from operating activities decreased by £2,941,336 and is now restated at (£1,939,366). Proceeds from the loan owed to group undertakings and net cash generated from financing activities decreased by £2,941,336 and is now restated at £2,240,894. There was no overall change to the net movement in cash and cash equivalents.

27
Post balance sheet events

Daikin Europe Coordination Center N.V., a company registered in Belgium, is a subsidiary within the Daikin Europe N.V. group, of which Hubbard Products Ltd is also a subsidiary. Daikin Europe Coordination Center N.V. had provided the company with a credit facility of £32 million. As at 31 March 2024, £27,733,760 (2023: £26,113,176) had been drawn down under the facility (refer to note 14 and 15). That facility was due to terminate on 31 May 2024. After the year-end the facility was renewed with a facility limit of £32 million from 1 June 2024 with a termination date of 30 September 2024. A further renewal took place with a facility limit of £34 million on 1 October 2024 with a termination date of 31 May 2025. A further renewal took place with a facility limit of £34 million on 24 April 2025 with a termination date of 31 May 2026. The credit facility can be terminated at any point by one months written notice by either the company or Daikin Europe Coordination Center N.V.

28
Reserves

Called up share capital -Called up share capital reserve represents the nominal value of the shares issued.

 

Profit and loss account - Profit and loss account represents cumulative profits or losses, net of dividends paid and other adjustments.

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