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

Munters Limited provides a broad range of dehumidification and cooling solutions, including service and maintenance, for various industries allowing its customers to benefit from the “perfect climate” they need.

The key performance indicators used by the Company to monitor performance are turnover, operating profit and average headcount.

The company turnover increased by 21% from the 2023 results with increased sales from the battery segment. Operating profit has been negatively impacted by import duties. The average head count increased by 8 partly due to temporary staff for a specific Group project, additional global employees and to increase capacity within the business.

The key performance indicators are shown below:

                        2024    2023

£000 £000

Turnover (Continuing operations)            25,177    20,722

Operating profit                    997    449

Average head count                104    96

The operating profit for the year was £996,725 (2023: £448,874). A net profit of £842,964 (2023: £434,522) has been carried to reserves.

The principal risks and uncertainties facing the company are as below.

• Competitive risks: The company is very dependent on major customers. Future performance would be affected by either the loss of a customer, or the loss of a key account to a competitor. The company is also dependent on continuing product development to maintain its competitive advantage.

• Credit risk: Credit risk is the risk that customers will be unable to settle amounts due to the company. The company operates a management control of reviewing the credit worthiness of all customers that are judged as uncertain. Details of the company's debtors are shown in the notes to the financial statements.

• Liquidity risk: Participant in a group cash pooling arrangement and hence is able when needed to obtain funds from the group.

• Foreign exchange risk: At a local level most of the transactions are in local currency (GBP) and when dealing in the Irish market, purchases are made in the same currency as the sales, which mitigates the risk. The company purchases from the Munters Group in the same currency that the corresponding sales are denominated.

• United Kingdom ('UK') leaving the European Union ('EU') ('Brexit'): The UK left the EU on the 1 January 2021. There is no local manufacturer for desiccant equipment sold by the company in the UK, as such we don't foresee any competitive disadvantage from this situation and the company passes on any price increase to the customers. As present, there is limited impact on the import of equipment and spare parts but there is increased administrative and customs regulations for the company.

• Russia/Ukraine conflict: When Russia invaded Ukraine in early 2022, all business by the Group in Russia and Ukraine was halted. As the company's customer base in within the UK, there was no impact on projects. The Group has also established greater trade compliance reporting to highlight any areas of concern.

On behalf of the board

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

The results for the year are set out on page 9.

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

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

The company has granted an indemnity to one or more of its directors against liability in respect of proceedings brought by third parties, subject to the conditions set out in the Companies Act 2006. Such qualifying third party indemnity provisions remain in force as at the date of approving the directors' report.

The company's current policy concerning the payment of trade creditors is to follow the CBI's Prompt Payers Code (copies are available from the CBI, Centre Point, 103 New Oxford Street, London WC1A 1DU).

The company's current policy concerning the payment of trade creditors is to:

• settle the terms of payment with suppliers when agreeing the terms of each transaction;

• ensure that suppliers are made aware of the terms of payment by inclusion of the relevant terms in contracts; and

• pay in accordance with the company's contractual and other legal obligations.

Trade creditors of the company at the year end were equivalent to 10 day's purchases, based on the average daily amount invoiced by suppliers during the year.

The flow of orders received since the beginning of 2025 has maintained at high levels. The directors are confident that a strong backlog of orders combined with various actions engaged to reduce the overhead costs should result in an increase of the operating profit this year.

So far as each person who was a director at the date of approving this report is aware, there is no relevant audit information, being information needed by the auditor in connection with preparing its report, of which the company’s auditor is unaware. Having made enquiries of fellow directors and the company’s auditor, each director has taken all the steps that he is obliged to take as a director in order to make himself aware of any relevant audit information and to establish that the auditor is aware of that information.

The Company's business activity along with the factors likely to affect future development and position are set out in the Strategic report.

The directors have prepared a cash flow forecast to 30 September 2026, being the going concern review period which takes account of possible changes in trading performance.

The Company's cash funding is provided by a group cash pooling arrangement. The Company is therefore reliant on parental support. Munters AB. has confirmed that it will provide such financial support and other support as necessary to enable the company to meet its liabilities for at least the going concern review period. The directors have a reasonable expectation that Munters AB. has adequate resources and liquidity to continue in operational existence for this period. Accordingly, the directors consider it appropriate to adopt the going concern basis in preparing these financial statements.

This report has been prepared in accordance with the provisions applicable to companies entitled to the medium-sized companies exemption.

The directors are responsible for preparing the annual report and 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) and in accordance with Financial Reporting Standard 101 "Reduced Disclosure Framework" (FRS 101). 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 or 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;

• state whether applicable UK Accounting Standards including FRS101 have been followed, subject to any material departures disclosured and explained in the financial statements; and

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

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

We have audited the financial statements of Munters Limited for the year ended 31 December 2024 which comprise the income statement, the statement of financial position, the statement of changes in equity and notes to the financial statements, including a summary of significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including FRS 101 Reduced Disclosure Framework (United Kingdom Generally Accepted Accounting Practice).

In our opinion the financial statements:

• give a true and fair view of the state of the company's affairs as at 31 December 2024 and of its for the year then ended;

• have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice including FRS 101 Reduced Dislosure Framework; and

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

Basis for opinion

We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditor's responsibilities for the audit of the financial statements section of our report. We are independent of the company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the 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 other information comprises the information included in the annual report other than the financial statements and our auditor's report thereon. The directors are responsible for the other information contained within the annual report. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the course of the audit, or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.

We have nothing to report in this regard.

Opinions on other matters prescribed by the Companies Act 2006

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

• the information given in the strategic report and the directors' report for the financial year for which the financial statements are prepared is consistent with the financial statements; and

• the strategic report and the directors' report have been prepared in accordance with applicable legal requirements.

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

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

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

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

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

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

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.

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

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

The objectives of our audit in respect of fraud, are; to identify and assess the risks of material misstatement 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 to those assessed risks; and to respond appropriately to instances of fraud or suspected fraud identified during the audit. However, the primary responsibility for the prevention and detection of fraud rests with both management and those charged with governance of the company.

Our approach was as follows:

• We obtained an understanding of the legal and regulatory requirements applicable to the company and considered that the most significant are the Companies Act 2006, International Financial Reporting Standards as adopted by the UK, and UK taxation legislation.

• We obtained an understanding of how the company complies with these requirements by discussions with management and those charged with governance.

• We assessed the risk of material misstatement of the financial statements, including the risk of material misstatement due to fraud and how it might occur, by holding discussions with management and those charged with governance.

• We inquired of management and those charged with governance as to any known instances of non-compliance or suspected non-compliance with laws and regulations.

• Based on this understanding, we designed specific appropriate audit procedures to identify instances of non-compliance with laws and regulations. This included making enquiries of management and those charged with governance and obtaining additional corroborative evidence as required.

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.

The company has no comprehensive income other than the profit attributable to the shareholders of the company of £435,000 in the year ended 31 December 2024 (2023 - £145,000).

All of the activities of the company are classified as continuing.

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

The financial statements of Munters Limited (the "Company") for the year ended 31 December 2024 were authorised for issue by the board of directors on 30 September 2025 and the balance sheet was signed on the board's behalf by N Torkelsson. Munters Limited is a private company limited by shares, incorporated and domiciled in England and Wales. The registered office Knowledge Centre, Wyboston Lakes Great North Road, Wyboston, Bedford, England, MK44 3BY.

These financial statements were prepared in accordance with Financial Reporting Standard 101 Reduced Disclosure Framework (FRS101) and in accordance with applicable accounting standards. The company has applied a true and fair view override in respect of non amortisation of goodwill.

The Company's financial statements were present in Sterling (the company's functional currency) and all values are rounded to the nearest £. The results of Munters Limited are included in the consolidated financial statements of Munters AB which are available from Post Box 1188, Kista, Stockholm, 164 26, Sweden.

The financial statements are prepared under the historical cost convention and in accordance with applicable accounting standards. The company is itself a subsidiary company and is exempt from the requirement to prepare group accounts by virtue of section 401 of the Companies Act 2006. These financial statements therefore present information about the company as an individual undertaking and not about its group.

The accounting policies which follow set out those policies which apply in preparing the financial statements for the year ended 31 December 2024. The Company has taken advantage of the following disclosure exemptions under FRS101:

• The requirements of IFRS 7, Financial Instruments: Disclosures

• The requirements of paragraphs 91 to 99 of IFRS 13 Fair Value Measurement

• The requirements of the second sentence of paragraph 110 and paragraphs 113(a),

• 114, 115, 118, 119(a) to (c), 120 to 127 and 129 of IFRS 15 Revenue from Contracts with Customers

• The requirements of IAS 7 Statement of Cash Flows

• The requirement in paragraph 38 of IAS 1 Presentation of Financial Statements to present comparative information in respect of:

  • paragraph 79 (a) of IAS 1 Presentation of Financial Statements

  • paragraph 73(e) of IAS 16 Property, Plant and Equipment

  • paragraph 118(e) of IAS 38 Intangible Assets

• The requirements of paragraphs 10(d), 10(f), 39(c), 111 and 134-136 of IAS 1 Presentation of Financial Statements

• The requirements of paragraphs 30 and 31 of IAS 8 Accounting Policies, Changes in Accounting Estimates and Errors

• The requirements of paragraphs 130(f)(ii), 130(f)(iii), 134(d) – 134(f) and 135(c) – 135(e) of IAS 36 Impairment of Assets

• The requirements of IAS 24 Related Party Disclosures to disclose related party transactions entered into between two or more members of a group, provided that any subsidiary, which is a party to the transaction, is wholly owned by such a member and to disclose key management personnel compensation

• The requirements of paragraphs 52, paragraph 58, the second sentence of paragraph 89, and paragraphs 90, 91 and 93 of IFRS 16 Leases

The Company's business activity along with the factors likely to affect future development and position are set outtrue in the Strategic Report.

The directors have prepared a cash flow forecast to 30 September 2026, being the going concern review period which takes account of possible changes in trading performance.

The Company's cash funding is provided by a group cash pooling arrangement. The Company is therefore reliant on parental support. Munters AB. has confirmed that it will provide such financial support as necessary to enable the company to meet its liabilities for at least the going concern review period. The directors have a reasonable expectation that Munters AB. has adequate resources and liquidity to continue in operational existence for this period. Accordingly, the directors consider it appropriate to adopt the going concern basis in preparing these financial statements.

Revenue comprises sales of goods or services provided to customers net of value added tax and other sales taxes, less an appropriate deduction for actual and expected returns and discounts. Revenue is recognised when performance obligations are satisfied and the control of goods or services is transferred to the buyer. Where the performance obligation is satisfied over time, revenue is recognised in accordance with its progress towards complete satisfaction of that performance obligation.

When cash inflows are deferred and represent a financing arrangement, the promised consideration is adjusted for the effects of the time value of money, which is recognised as interest income.

The company recognises revenue from the following major sources:

• Sale of equipment

• Installation and commissioning services

The nature, timing of satisfaction of performance obligations and significant payment terms of the company's major sources of revenue are as follows:

Revenue from sale of equipment is recognised at the point in time when control of the asset is transferred to the customer, generally on delivery of the equipment. The company considers whether there are other promises in the contract that are separate performance obligations to which a portion of the transaction price needs to be allocated. In determining the transaction price, the company considers the effects of variable consideration, the existence of significant financing components, non cash consideration and consideration payable to the customer if any.

The company provides installation and commissioning services that are either sold separately or bundled together with the sale of equipment to a customer. The installation services can be obtained from other providers and do not significantly customise or modify the equipment. The commissioning services is to make sure that the equipment works as intended.

Contracts for bundled sales are analysed by the company for separate performance obligation by checking for items that are capable of being distinct and separately identifiable. Accordingly, the company allocates the transaction price based on the relative stand-alone selling prices of the performance obligations.

The company recognises revenue from installation and commissioning services at a point in time, when the service has been completed. Revenue from the sale of equipment are recognised at a point in time, generally upon delivery of the equipment.

The UK Companies Act requires goodwill to be reduced by provisions for amortisation on a systematic basis over a period chosen by the directors, its useful economic life. However, under IFRS 3 Business Combinations goodwill is not amortised. Consequently, the company does not amortise goodwill, but reviews it for impairment on an annual basis or whenever there are indicators of impairment. The company is therefore invoking a 'true and fair view override' to overcome the prohibition on the non-amortisation of goodwill in the Companies Act.

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:

• Customer relationships - 3.6 years

All fixed assets are initially recorded at cost.

Depreciation is calculated to write off the cost of fixed assets, in equal instalments, over management’s estimate of their useful economic lives as follows:

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 recognised in the income statement.

At each reporting 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.

If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (or cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the impairment loss is treated as a revaluation decrease.

Where an impairment loss subsequently reverses, the carrying amount of the asset (or cash-generating unit) is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset (or cash-generating unit) in prior years. A reversal of an impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the reversal of the impairment loss is treated as a revaluation increase.

Stocks are stated at the lower of cost and net realisable value. Cost includes all costs incurred in bringing each product to its present location and condition as follows:

Raw materials - purchase cost on a first-in, first out basis

Work in progress - cost of direct materials and labour plus attributable overheads based on a normal level of activity.

Finished goods - completely manufactured products which are ready for sale and delivery to the market place.

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

Cash and cash equivalents include cash in hand, deposits held at call with banks, other short-term liquid investments with original maturities of three months or less, and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities.

Financial assets and liabilities are recognised when the company becomes party to the contractual provisions of the instrument. Financial assets are derecognised when the company transfers the financial asset or when the contractual rights expire. Financial liablities are derecognised when the obligation is discharged, cancelled or expires. The measurement of particular financial assets or liabilities is set out below:

Non derivative financial instruments

The treatment of non-derivative financial instruments is set out below:

When any of the above-mentioned conditions for classification of financial assets is not met, a financial asset is classified as measured at fair value through profit or loss. Financial assets measured at fair value through profit or loss are recognized initially at fair value and any transaction costs are recognised in profit or loss when incurred. A gain or loss on a financial asset measured at fair value through profit or loss is recognised in profit or loss, and is included within finance income or finance costs in the statement of income for the reporting period in which it arises.

Financial instruments are classified as financial assets measured at amortised cost where the objective is to hold these assets in order to collect contractual cash flows, and the contractual cash flows are solely payments of principal and interest. They arise principally from the provision of goods and services to customers (eg trade receivables). They are initially recognised at fair value plus transaction costs directly attributable to their acquisition or issue, and are subsequently carried at amortised cost using the effective interest rate method, less provision for impairment where necessary.

Debtors are classified as financial assets at amortised cost and recognised initially at their fair value and subsequently recorded at amortised cost using the effective interest method as reduced by allowances for estimated irrecoverable amounts. The company recognises an allowance for expected credit losses (ECLs) for all debt instruments not held at fair value through profit or loss. ECLs are based on the difference between the contractual cash flows due in accordance with the contract and all the cash flows that the company expects to receive, discounted at an approximation of the original effective interest rate. The expected cash flows will include cash flows from the sale of collateral held or other credit enhancements that are integral to the contractual terms. The amount of allowance is the difference between the assets' carrying amount and the present value of estimated future cash flows.

Debt instruments are classified as financial assets measured at fair value through other comprehensive income where the financial assets are held within the company’s business model whose objective is achieved by both collecting contractual cash flows and selling financial assets, and the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.

A debt instrument measured at fair value through other comprehensive income is recognised initially at fair value plus transaction costs directly attributable to the asset. After initial recognition, each asset is measured at fair value, with changes in fair value included in other comprehensive income. Accumulated gains or losses recognised through other comprehensive income are directly transferred to profit or loss when the debt instrument is derecognised.

The company has made an irrevocable election to recognize changes in fair value of investments in equity instruments through other comprehensive income, not through profit or loss. A gain or loss from fair value changes will be shown in other comprehensive income and will not be reclassified subsequently to profit or loss. Equity instruments measured at fair value through other comprehensive income are recognized initially at fair value plus transaction cost directly attributable to the asset. After initial recognition, each asset is measured at fair value, with changes in fair value included in other comprehensive income. Accumulated gains or losses recognized through other comprehensive income are directly transferred to retained earnings when the equity instrument is derecognized or its fair value substantially decreased. Dividends are recognized as finance income in profit or loss.

Financial assets carried at amortised cost and FVOCI are assessed for indicators of impairment at each reporting end date.

The expected credit losses associated with these assets are estimated on a forward-looking basis. A broad range of information is considered when assessing credit risk and measuring expected credit losses, including past events, current conditions, and reasonable and supportable forecasts that affect the expected collectability of the future cash flows of the instrument.

Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire, or when it transfers the financial asset and substantially all the risks and rewards of ownership to another entity.

The company recognises financial debt when the company becomes a party to the contractual provisions of the instruments. Financial liabilities are classified as either 'financial liabilities at fair value through profit or loss' or 'other financial liabilities'.

Other financial liabilities, including borrowings, trade payables and other short-term monetary liabilities, are initially measured at fair value net of transaction costs directly attributable to the issuance of the financial liability. They are subsequently measured at amortised cost using the effective interest method. For the purposes of each financial liability, interest expense includes initial transaction costs and any premium payable on redemption, as well as any interest or coupon payable while the liability is outstanding.

Financial liabilities are derecognised when, and only when, the company’s obligations are discharged, cancelled, or they expire.

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

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

Deferred tax is the tax expected to be payable or recoverable on differences between the carrying amounts of assets and liabilities in the financial statements and the corresponding tax bases used in the computation of taxable profit, and is accounted for using the balance sheet liability method. Deferred tax liabilities are generally recognised for all taxable temporary differences and deferred tax assets are recognised to the extent that it is probable that taxable profits will be available against which deductible temporary differences can be utilised. Such assets and liabilities are not recognised if the temporary 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, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity. 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.

Provisions are recognised when the company has a legal or constructive present obligation as a result of a past event and 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 a provision is measured using the cash flows estimated to settle the present obligation, its carrying amount is the present value of those cash flows.

When some or all of the economic benefits required to settle a provision are expected to be recovered from a third party, a receivable is recognised as an asset if it is virtually certain that reimbursement will be received and the amount of the receivable can be measured reliably.

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 inventories or non-current 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.

Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.

At inception, the company assesses whether a contract is, or contains, a lease within the scope of IFRS 16. A contract is, or contains, a lease if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration. Where a tangible asset is acquired through a lease, the company recognises a right-of-use asset and a lease liability at the lease commencement date. Right-of-use assets are included within property, plant and equipment, apart from those that meet the definition of investment property.

The right-of-use asset is initially measured at cost, which comprises the initial amount of the lease liability adjusted for lease payments made at or before the commencement date plus any initial direct costs and an estimate of the cost of obligations to dismantle, remove, refurbish or restore the underlying asset and the site on which it is located, less any lease incentives received.

The right-of-use asset is subsequently adjusted for remeasurements of the lease liability and applies the relevant cost model, fair value model or revaluation model as set out within the accounting policies for the applicable asset class. Where the cost model is applied, the asset is depreciated from the commencement date to the earlier of the end of the useful life of the right-of-use asset or the end of the lease term, and is periodically reduced by impairment losses, if any.

The lease liability is initially measured at the present value of the lease payments that are unpaid at the commencement date, discounted using the interest rate implicit in the lease or, if that rate cannot be readily determined, the company's incremental borrowing rate. Lease payments included in the measurement of the lease liability comprise fixed payments, variable lease payments that depend on an index or a rate, amounts expected to be payable under a residual value guarantee, and the cost of any options that the company is reasonably certain to exercise, such as the exercise price under a purchase option, lease payments in an optional renewal period, or penalties for early termination of a lease.

The lease liability is measured at amortised cost using the effective interest method. It is reassessed at each financial period end to reflect lease modifications and any changes to the factors considered at initial measurement, as set out above. When the lease liability is remeasured in this way, a corresponding adjustment is made to the carrying amount of the right-of-use asset, or is recorded in profit or loss if the carrying amount of the right-of-use asset has been reduced to zero.

The company has elected not to recognise right-of-use assets and lease liabilities for short-term leases of machinery that have a lease term of 12 months or less, or for leases of low-value assets including IT equipment. The payments associated with these leases are recognised in profit or loss on a straight-line basis over the lease term.

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, if the revision affects only that period, or in the period of the revision and future periods if the revision affects both current and future periods.

The estimates and assumptions which have a significant risk of causing a material adjustment to the carrying amount of assets and liabilities are outlined below.

The company applied the following judgements that significantly affect the determination of the amount and timing of revenue from contracts with customers:

The company provides installation and/or commissioning services that are either sold separately or bundled together with the sale of equipment to a customer. The installation services are a promise to transfer services in the future and are part of the negotiated exchange between the company and the customer on which the customer can take or not, while the commissioning services normally is part of the contract with the customers.

The company determined that both the equipment, installation and commissioning are capable of being distinct. The fact that the company regularly sells both equipment, installation and commissioning on a stand-alone basis indicates that the customer can benefit from both products on their own. The company also determined that the promises to transfer the equipment and to provide installation are distinct within the context of the contract. The equipment, installation are not inputs to a combined item in the contract. The company is not providing a significant integration service because the presence of the equipment and installation together in this contract do not result in any additional or combined functionality and neither the equipment not the installation modify or customise the other . In addition, the equipment and installation are not highly interdependent or highly interrelated, because the company would be able to transfer the equipment even if the customer declined installation and would be able to provide installation in relation to products sold by other distributors.

The company has certain contracts with customers to acquire equipment produced by foreign suppliers. The company concluded that, based on the existence of credit and inventory risk, it had an exposure to the significant risks and rewards associated with the sale of equipment to its customers, and accounted for the contracts as a principal.

The company is required to test, at lease annually, whether goodwill has suffered any impairment. The recoverable amount is determined based on value-in-use calculations. The use of this method requires the estimation of future cash flows and the choice of a suitable discount rate in order to calculate the present value of these cash flows (refer to note 10). Actual outcomes could vary such that, in future, carrying values could be impaired.

The company provides warranties for general repairs of defects that existed at the time of sale. Provisions related to these assurance-type warranties are recognised when the product is sold, or the service is provided to the customer. Initial recognitiion is based on historical experience. The initial estimate of warranty-related costs is revised annually. Refer to note 20 for the book value of the warranty provision.

Turnover represents the amounts derived from the company’s principal activities, stated net of value added tax. Turnover is analysed below into geographical markets.

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

Their aggregate remuneration comprised:

The number of directors for whom retirement benefits are accruing under defined contribution schemes amounted to 1 (2023 - 1).

No director exercised share options or received shares for qualifying services during the year of the prior year.

J P Leesi and MB Hallmark are also directors of other group companies and are remunerated by other entities of the Munters group. The directors do not believe it is practical to apportion their total remuneration for their services as directors of Munters Limited, the parent undertaking and fellow subsidiary companies. Therefore no amounts in respect of their services as directors to Munters Limited are include in the total directors' remuneration above as it is not possible to separately identify them.

The charge for the year can be reconciled to the profit per the income statement as follows:

Goodwill relates to the acquisition of trade and assets in 2010 being the current on-going trade of the business. The recoverable amount of the goodwill has been determined based on a value in use calculation using the cash flow projections based on the finance budgets approved by the board covering a five year period.

Customer relationships relates to the acquisition of Humi-Tech Services Ltd and its trade and assets in 2018.

Property, plant and equipment includes right-of-use assets, as follows:

There is no significant difference between the replacement cost of stock and their carrying amounts. Stock is stated after provisions for impairment of £84,958 (2023: £84,437).

Lease liabilities are effectively secured as the rights to the leased asset revert to the lessor in the event of default.

A debenture is held by Swedbank AB over the present and future assets and undertaking of the company.

The company has lease contracts for offices, vehicles and office equipment. The office leases are between 3 and 4 years, the vehicles generally have a lease term of 3 years and the office equipment is between 3 and 5 years. The office equipment leases are deemed to be low value (less than £5,000) and the company has applied the low value exemption to expense these leases through the income statement on a straight line basis over the term of the lease. The company's obligations under its leases are secured by the lessor's title to the leased assets. Generally, the company is restricted from assigning and subleasing the leased assets.

The following are the major deferred tax liabilities and assets recognised by the company and movements thereon during the current and prior reporting period.

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.

There is a potential claim (estimated currently at £4.5m) in connection with a 2019 apartment fire against the company in relation to equipment supplied in 2012, which is currently under investigation. Based on the current status of investigation, the directors do no believe any economic outflow associated with this potential issues is probable at the current time. In the event that an economic outflow becomes more likely than not, the directors believe, based on discussions with the company's insurers, that any resulting outflow would be fully covered by the company's product liability insurance.

Amounts recognised in profit or loss as an expense during the period in respect of lease arrangements are as follows:

The company has taken advantage of paragraph 8(k) of FRS101 not to disclose transactions with entities that are part of Munters AB group on the grounds that it is a wholly owned subsidiary and the group financial statements of the group are publicly available.

The company's immediate parent company Munters AB a company registered in Sweden with organisation number 55606041-0606, prepares consolidated financial statements which include the result of the company. Copies of the group's financial statements can be obtained from the Company Secretary of Munters AB. The ultimate parent controlling party is regarded as Munters Topholding AB with organisation number 556819-2321.