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

Trading result for the year shows turnover of £23,083,445, a 6% increase on the previous year.

Results of key performance indicators:

The company envisages a move to trading profitably at operating level in the year ended 31 March 2026 under the ownership of the Daikin Group. 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 2025 a 6% increase in sales revenue is reported as a result of 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.

Hubbard Products management continued efforts to reinforce 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 committed in developing new distribution relationships to approach HoReCa [Hotels, Restaurants and Catering] and Small commercial business sectors utilizing differentiating product portfolio launched by other Group entities and promoted in UK through Hubbard Products Limited.

Efforts of management to streamline the organization have resulted in positive progress of main KPIs, with marginality, administrative costs and stock days to be reporting substantial improvement. Hubbard Products will continue the roll out of the action 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 further streamline 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 £1,638,450 (2024 – £1,522,498).

Tax on loss included an income amount being a £Nil (2024 – credit of £594,000) in relation to a deferred tax asset arising from receipts expected for the surrender of tax losses to other group companies.

Review of the business (continued)

The company has assessed its position in light of the 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.

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

Refrigeration Market in UK, EU and USA is regulated by legislation around refrigerants and energy efficiency. Hubbard Products Limited 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 (Global Warming Potential) 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 Limited.

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 15.

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 Limited 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 15.

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 Limited 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).

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

There are no events to report after the balance sheet date.

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

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.

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 2.

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

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

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

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

This confirmation is given and should be interpreted in accordance with the provisions of Section 418 of the Companies Act 2006.

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 2025, £27,276,740 (2024: £27,733,760) 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 £29.85 million at 31 August 2025. The credit facility agreement expires on 31 May 2026. The credit facility can be terminated at any point by one months’ written notice. However, Daikin Europe Coordination Center N.V. has provided written confirmation to the company of their intention to continue to provide financial support, at current levels and any additional, 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 2025 year end, as explained within note 1.2. 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. The company has confirmed that Daikin Europe Coordination Centre N.V. has sufficient funds to cover the facility ceiling. Prior to the credit facility expiring, the directors provide information to Daikin Europe Coordination Center N.V. to extend the facility, the directors expect that facility to be renewed at that point.

The directors have prepared detailed trading and cash flow forecasts through to 31 March 2027, as explained within note 1.2. These forecasts indicate the company will remain liquid within its current credit facilities of ceiling of £34million throughout that period.

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.

The directors are responsible for preparing the Annual 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 United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law), including FRS 102 ‘The Financial Reporting Standard applicable in the UK and Republic of Ireland'. Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the Company and of the profit or loss of the Company for that period. In preparing these financial statements, the directors are required to:

• select suitable accounting policies and then apply them consistently;

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

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

• prepare the financial statements on the going concern basis unless it is inappropriate to presume that the 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.

Opinion

In our opinion the financial statements of Hubbard Products Limited (the ‘company’):

• give a true and fair view of the state of the company’s affairs as at 31 March 2025 and of its loss for the year then ended;

• have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice, including Financial Reporting Standard 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland”; and

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

We have audited the financial statements which comprise:

• the statement of comprehensive income;

• the statement of financial position;

• the statement of changes in equity; and

• the related notes 1 to 24.

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 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 Financial Reporting Council’s (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.

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.

A further description of our responsibilities for the audit of the financial statements is located on the FRC’s website at: www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor’s report.

Extent to which the audit was considered 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.

We considered the nature of the company’s industry and its control environment, and reviewed the company’s documentation of their policies and procedures relating to fraud and compliance with laws and regulations. We also enquired of management and the directors about their own identification and assessment of the risks of irregularities, including those that are specific to the company’s business sector.

We obtained an understanding of the legal and regulatory framework that the company operates in, and identified the key laws and regulations that:

• had a direct effect on the determination of material amounts and disclosures in the financial statements. These included UK Companies Act, pensions legislation and tax legislation; and

• do not have a direct effect on the financial statements but compliance with which may be fundamental to the company’s ability to operate or to avoid a material penalty. These included health and safety and environmental regulations.

We discussed among the audit engagement team regarding opportunities and incentives that may exist within the organisation for fraud and how and where fraud might occur in the financial statements.

As a result of performing the above, we identified the greatest potential for fraud in the following areas, and our procedures performed to address it are described below:

Revenue recognition – We have identified the recording of revenue as a fraud risk pinpointed to the cut-off. In addressing the risk, we audited a sample of the agreements in place to ensure revenue has been recorded correctly.

In common with all audits under ISAs (UK), we are also required to perform specific procedures to respond to the risk of management override. In addressing the risk of fraud through management override of controls, we tested the appropriateness of journal entries and other adjustments; assessed whether the judgements made in making accounting estimates are indicative of a potential bias; and evaluated the business rationale of any significant transactions that are unusual or outside the normal course of business.

In addition to the above, our procedures to respond to the risks identified included the following:

• reviewing financial statement disclosures by testing to supporting documentation to assess compliance with provisions of relevant laws and regulations described as having a direct effect on the financial statements;

• performing analytical procedures to identify any unusual or unexpected relationships that may indicate risks of material misstatement due to fraud;

• enquiring of management and external legal counsel concerning actual and potential litigation and claims, and instances of non-compliance with laws and regulations; and

• reading minutes of meetings of those charged with governance.

Report on other legal and regulatory requirements

Opinions on other matters prescribed by the Companies Act 2006

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

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

• the strategic report and directors’ report has 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 any material misstatements in the strategic report and the directors’ report.

Matters on which we are required to report by exception

Under the Companies Act 2006 we are required to report in respect of the following matters 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.

We have nothing to report in respect of these matters.

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 income statement has been prepared on the basis that all operations are continuing operations. There are no items of other comprehensive income in addition to the loss stated above and therefore no separate statement of comprehensive income is produced.

The notes on pages 14 to 28 form part of these financial statements.

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

The notes on pages 14 to 28 form part of these financial statements.

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.

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.

This company is a qualifying entity for the purposes of FRS 102, being a member of a group where the parent of that group prepares publicly available consolidated financial statements, including this company, which are intended to give a true and fair view of the assets, liabilities, financial position and profit or loss of the group. The company has therefore taken advantage of exemptions from the following disclosure requirements:

• Section 7 ‘Statement of Cash Flows’: Presentation of a statement of cash flow and related notes and disclosures;

• Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instrument Issues: Interest income/expense and net gains/losses for financial instruments not measured at fair value; basis of determining fair values; details of collateral, loan defaults or breaches, details of hedges, hedging fair value changes recognised in profit or loss and in other comprehensive income;

• Section 26 ‘Share based Payment’: Share-based payment expense charged to profit or loss, reconciliation of opening and closing number and weighted average exercise price of share options, how the fair value of options granted was measured, measurement and carrying amount of liabilities for cash-settled share-based payments, explanation of modifications to arrangements;

• Section 33 ‘Related Party Disclosures’: Compensation for key management personnel.

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 2025, £27,276,740 (2024: £27,733,760) 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 £29.85 million at 31 August 2025. The credit facility agreement expires on 31 May 2026. The credit facility can be terminated at any point by one months’ written notice. However, Daikin Europe Coordination Center N.V. has provided written confirmation to the company of their intention to continue to provide financial support, at current levels and any additional, 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 2025 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. The company has confirmed that Daikin Europe Coordination Centre N.V. has sufficient funds to cover the facility ceiling. Prior to the credit facility expiring, the directors provide information to Daikin Europe Coordination Center N.V. to extend the facility, the directors expect that facility to be renewed at that point.true

The directors have prepared detailed trading and cash flow forecasts through to 31 March 2027. These forecasts indicate the company will remain liquid within its current credit facilities of ceiling of £34million throughout that period.

Following the going concern assessment made by the directors 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.

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:

• the Company has transferred to the buyer the significant risks and rewards of ownership of the goods;

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

• the amount of revenue can be measured reliably;

• it is probable that the economic benefits associated with the transaction will flow to the Company; and

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

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.

Research expenditure is written off as incurred. Development expenditure is also written off, except where the directors are satisfied as to the technical, commercial and financial viability of individual projects. In such cases, the identifiable expenditure is capitalised as an intangible asset and amortised over the period during which the company is expected to benefit. This period is between three and five years. Provision is made for any impairment.

Positive purchased goodwill arising on acquisitions is capitalised and amortised over its useful economic life of 20 years. Purchased goodwill relates to the acquisition of 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.

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:

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 2025 the remaining amortisation period of the software was 1.83 years.

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:

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.

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.

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.

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

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, 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.

Other financial assets, including investments in equity instruments which are not subsidiaries, associates or joint ventures, are initially measured at fair value, which is normally the transaction price. Such assets are subsequently carried at fair value and the changes in fair value are recognised in profit or loss, except that investments in equity instruments that are not publicly traded and whose fair values cannot be measured reliably are measured at cost less impairment.

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.

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.

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, 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.

Derivatives, including interest rate swaps and forward foreign exchange contracts, are not basic financial instruments. Derivatives are initially recognised at fair value on the date a derivative contract is entered into and are subsequently re-measured at their fair value. Changes in the fair value of derivatives are recognised in profit or loss in finance costs or finance income as appropriate, unless hedge accounting is applied and the hedge is a cash flow hedge.

Debt instruments that do not meet the conditions in FRS 102 paragraph 11.9 are subsequently measured at fair value through profit or loss. Debt instruments may be designated as being measured at fair value through profit or loss to eliminate or reduce an accounting mismatch or if the instruments are measured and their performance evaluated on a fair value basis in accordance with a documented risk management or investment strategy.

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

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.

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 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.

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.

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.

For defined contribution schemes the amount charged to the profit and loss account in respect of pension costs and other retirement benefits is the contributions payable in the year. Differences between contributions payable in the year and contributions actually paid are shown as either accruals or prepayments in the balance sheet.

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.

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.

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.

There are no critical judgements.

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.

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

There was 1 director in the Company's defined contribution pension scheme during the year (2024 : 2)

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

Their aggregate remuneration comprised:

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:

A deferred tax asset has been recognised at 31 March 2025 of £1,008,000 (2024: £594,000) in relation to the surrender of losses for group relief which the company expects to be paid for.

Amortisation of intangible fixed assets is included in administrative expenses.

Raw materials, consumables and work in progress includes an amount of £603,954 (2024 - £451,205) 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 £227,420 (2024 - loss of £21,182) 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.

Amounts owed by group undertakings of £200,590 (£133,264) relates to the sale of stock, which are payable within the month following invoice month. No interest is applied to amounts owed by group undertakings.

Amounts owed to group undertakings relates to the purchase of stock. No interest is applied to amounts owed to group undertakings.

Included within loans owed to group undertakings is a credit facility agreement with a sister subsidiary, Daikin Europe Coordination Center NV, amounting to £27,276,740 (2024: £27,733,760). 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.

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 £100,302 (2024 - £89,981) which is included within accruals and deferred income. The provision at 31 March 2025 relates to a property with a lease expiring in 2041, which is when the provision is expected to be utilised.

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:

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 £4,144,138 (2024: £6,676,352), equating to a potential deferred tax asset at 25% of £1,036,035 (2024: £1,669,088). 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.

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 £38,525 (2024 - £38,435) were payable to the pension fund at the reporting date and are included in creditors (accruals and deferred income).

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.

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:

Amounts contracted for but not provided in the financial statements:

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 2025 £3,900 was owed to the company by a director in respect of employee expenses recoverable (31 March 2024: £3,900).

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.

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.