The directors present the strategic report for the 9 month period ended 31 March 2025.

The principal activity of the company is the service, maintenance and installation of domestic and commercial heating and hot water systems within the affordable housing sector.

The company has a shortened accounting period following a change in reporting date. The purpose of this is to align the company's financial reporting with other members of the Daikin group.

Turnover for the financial period to 31 March 2025 was £25.4 million (2024: £42.5 million) and gross profit was £7.6 million (2024: £14 million). The shortening of the accounting period to 9 months, and also a movement in the customer base, have been the most significant drivers for the charge in turnover and gross profit.

The gross profit margin for the period was 29.8% (2024: 32.8%), attributable to competitive pressures.

The business generated profit before tax of £1.2 million (2024: £4.9 million).

The net assets position at the period end date was £21.5 million (2024: £20.6million). This improvement is attributable to profit retained for the period.

Some highlights of the business from the period include;

• A continuation of its investment into staff training & upskilling in renewable technologies

• Achieving high levels of customer satisfaction and compliance across all clients

• Securing and onboarding new client contracts

The number of employees reduced slightly during the period with an average of 260 staff members (2024: 284). The health, safety and wellbeing of our staff and end customers remained a priority for the period and we worked to ensure all those engaged and affected by our services did so in a safe working environment.

The principal risks to the business include the competitive marketplace in which it operates, and the general uncertainty within the UK economy.

Please refer to the conclusions relating to going concern in the Directors' Report.

In consideration of all the events in the period, the directors were pleased with performance and remain positive for the outlook of the business.

The principal risks and uncertainties facing the company include the following:

Market risk

The company operates in a highly competitive market but the quality and consistency of the company's product and services minimises the risk of losing sales to its key competitors. The company manages this risk by providing innovative products to its customers, having fast response times to customer enquiries and maintaining strong relationships with its customers.

Credit risk

Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in financial loss to the company. The company's credit risk is primarily attributable to its trade receivables. The amounts presented in the balance sheet are net of allowances for doubtful receivables. In the event that a loss has been identified or occurred a provision has been made for impairment. The company's management further mitigates the risk by obtaining credit insurance against the majority of its customers. The company has low credit risk, due to the exposure being spread over a large number of customers.

Liquidity risk

In order to maintain liquidity to ensure sufficient funds are available for ongoing operations and future developments, the company uses its own cash reserves and manages the payment of funds to fellow group companies.

The key financial indicators are:

Period end              Year end

31 March 2025            30 June 2024        % movement

Turnover             £25,376,392             £42,488,470        (40.3%)

Gross Profit             £7,571,363             £13,958,903        (45.8%)

Gross Profit margin         29.8%      32.8%

The analysis of the movement in the key performance indicators can be seen in the Review of the business section.

The directors of the company must act in accordance with a set of general duties. These duties are detailed in section 172 of the Companies Act 2006, which is summarised below.

A director of a company must act in a way they consider in good faith, would be most likely to promote the success of the company for the benefit of its shareholders as a whole, and in doing so, have regard amongst other matters to

• the likely consequences of any decision in the long term,

• the interests of the company's employees,

• the need to foster the company's business relationships with suppliers, customers and others,

• the impact of the company's operations on the community and the environment,

• the desirability of the company maintaining a reputation for high standards of business conduct; and

• the need to act fairly as between members of the company.

The directors fulfil their duties through a governance framework that delegates day-to-day decision making to employees of the company.

Overview of how the board performs its duties

Likely consequences of any decisions in the long term

Strategy is designed to have a long-term beneficial impact on the company. Strategy is geared towards ensuring success in the delivery of the most efficient and safe solutions to the company's customers for their heating, ventilation and climate control needs.

The interest of the company's employees

The directors value the involvement of company employees and keep them informed on matters affecting them as employees and factors affecting company performance. This is achieved through formal and informal meetings and also through a staff newsletter.

During the period the company has built on the use of periodic staff webinars to which all the workforce are invited. These are used to communicate key issues. Management team members lead the webinar and questions are invited via a Chat mechanism to enable a follow up Q&A discussion. These webinars were initially trialled after Daikin acquired the Robert Heath Group companies and are now proving valuable in improving communication and understanding across the whole workforce. Webinars are not planned to be time specific but to explain and communicate important issues as required to the wider workforce.

Business relationships with customers, suppliers and others

The company commits to relationships based on trust and openness with all customers, colleagues, business, partners and communities.

Community and the environment

The company is aware of its responsibility to protect the environment and its policies and practices strive to keep environmental sustainability high. The company is committed to reducing carbon gas emissions, improving energy efficiency and making use of sustainable energy sources. Several initiatives have been undertaken to reduce emissions and improve efficiencies.

Maintaining a reputation for high standards of business conduct

The company aims to maintain high standards by directing a strategy that aims to anticipate the future needs of customers. It is committed to building growth through the initiative and excellence of its employees.

The need to act fairly as between members of the company

The board is committed to acting fairly between members of the group and actively engages with shareholders and encourages feedback as part of this engagement process.

Approved by the Board and signed on its behalf by:

The results for the 9 month period are set out on page 13.

No ordinary dividends were paid (2024: nil). The directors do not recommend payment of a final dividend.

The directors who held office during the 9 month period and up to the date of signature of the financial statements were as follows:

Going concern

The directors have carried out a review of the company's expected performance in conjunction with budgets and cash flow requirements of the business to assess going concern. Whilst the directors recognise that the company remains exposed to the risk of an uncertain environment and its impact on the global economy, they continue to review the business performance regularly throughout the going concern period.

The directors have assumed that operations remain open and that the company will continue to service its customers.  Further, the directors believe there will be sufficient cash reserves to enable the company to meet its obligations as they fall due, for a period not less than 12 months from approval of these financial statements. The company has access to a group cash pooling arrangement with Daikin Europe Coordination Center N.V, as disclosed in Note 15, and can draw down amounts from this arrangement without restriction and on demand if required for operational needs. Thus, the directors continue to adopt the going concern basis of accounting in preparing the financial statements.

The company has made qualifying third party indemnity provisions for the benefit of its directors during the 9 month period. These provisions remain in force at the reporting date.

The discussion of financial risk management objectives and policies has been promoted to the Strategic report within the 'Principal risks and uncertainties' section and forms part of this report by cross reference.

The company's policy is to give full and fair consideration to applications for employment by the company made by disabled persons, having regard to their particular aptitudes and abilities. It is the policy of the company that the training, career development and promotion of disabled persons should, as far as possible, be identical to that of other employees.

Arrangements are made, wherever possible, for continuing the employment of, and for arranging appropriate training for, employees of the company who have become disabled persons during the period when they were employed by the company, to enable them to perform work identified as appropriate to their aptitudes and abilities.

The company's policy is to consult and discuss with employees matters likely to affect employees' interests.

Information of matters of concern to employees is given through information bulletins and reports which seek to achieve a common awareness on the part of all employees of the financial and economic factors affecting the group's performance.

Please also refer to the Section 172 statement within the Strategic Report for considerations.

The company's approach to stakeholder engagement is set out in the Strategic report in the "Business relationships with customers, suppliers and others" section.

There have been no significant post balance sheet events.

Following the acquisition of the Robert Heath Group, the company's immediate parent, by Daikin Industries Limited in the previous period, the directors look forward to working within the Daikin group to further build on the growth and successes of recent years.

Deloitte LLP were appointed as auditor to the company and in accordance with section 485 of the Companies Act 2006, a resolution proposing that they be re-appointed will be put at a General Meeting.

We are committed to achieving net zero emissions by 2040. We are conscious of the positive impact achieving this will have on the environment and for future generations and the company has a formal carbon reduction plan in place.

The directors set out below details of the company's carbon and energy use as required under the Companies Act 2006 - The Companies (Directors’ Report) and Limited Liability Partnerships (Energy and Carbon Report) Regulations 2018).

The amounts below represent quantities of emissions from the company's operations across the UK for the 9 month period ended 31 March 2025. Emissions in the prior period represent annual emissions for the year ended 30 June 2024.

We have followed the 2019 HM Government Environmental Reporting Guidelines. We have also used the GHG Reporting Protocol – Corporate Standard and have used the 2025 UK Government’s Conversion Factors for Company Reporting.

The chosen intensity measurement ratio are total gross emissions in tonnes CO2e per £m sales revenue and tonnes CO2e per employee.

We have taken various actions to support our transition to net zero carbon by 2040. Measures implemented in the prior period are ongoing and as follows:

ISO:14001

We have maintained our ISO 14001 standard for Environmental Management Systems and are proactively and consistently looking to improve our environmental performance.

Information technology

In addition to using 100% renewable energy tariffs, our in-house programming team have developed software using fast and efficient coding to reduce CPU time. Where possible, high intensity work has been rescheduled to off peak hours to smooth demand on the energy grid.

Servers have been moved to the cloud and been scaled back or shut down outside of key demand periods.

Balanced energy is achieved at our information solutions facility in Wales by load shifting energy demand to off peak periods and also by using a battery bank to store electricity. This energy is then released at times when demand is higher, both supporting the grid and reducing the company's carbon emissions.

Fleet and transportation

Our entire fleet are now fully compliant with ultra-low emissions zone requirements. We require our engineers to perform vehicle checks on their PDAs, including tyre pressure and vehicle cleanliness to minimise drag and rolling resistance and maintain optimal fuel economy.

Reducing mileage is a key part of our carbon reduction strategy for our engineers. As part of this we have introduced video enabled soft fix to support residents to resolve simple issues and negate the need for physical attendance to site and in turn reducing the carbon impact of our fleet.

To decarbonise our commercial fleet we are planning to trial hybrid vans alongside our parent company Daikin. When available we plan to trial hydrogen vans.

We have introduced a hybrid flexible working model to reduce the need for commuting to company sites and improve the work life balance for our employees.

We have introduced virtual toolbox talks to negate the requirement for engineers to travel to a site for operational and technical updates.

Offices and company locations

We work with our energy broker to review annually and identify the best energy tariff to reduce the carbon intensity of the energy supplies to our offices ensuring that our selection is optimal for our net zero carbon commitment.

To support our staff and visitors in the adoption of electric vehicles, four electric vehicle chargers have been installed at our head office in New Malden. Whilst we recognise that this could negatively impact our scope two emissions, supporting the transition to electrification of transportation will positively impact our scope one and three emissions.

Waste

We are focused in reducing the amount of waste we send to landfill and aim to reduce the amount of waste we generate in line with government strategy.

Data

We continue to gather data on our carbon emissions and work closely with our supply chain partners on our scope 3 emissions to identify areas for improvement, for example:

- working with our waste contractors to minimise waste to landfill and maximise recycling;

- improving data accuracy for commuting whilst identifying opportunities to reduce emissions such as hybrid working with the utilisation of technology;

- working with our procurement team and suppliers to understand emissions around delivery and collection of materials.

So far as each person who was a director at the date of approving this report is aware, there is no relevant audit information of which the company’s auditor is unaware. Additionally, the directors individually have taken all the necessary steps that they ought to have taken as directors in order to make themselves aware of all relevant audit information and to establish that the company’s auditor is aware of that information. This confirmation is given and should be interpreted in accordance with the provisions of section 418 of the Companies Act 2006.

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 with 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.

In our opinion the financial statements of Robert Heath Heating 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 profit for the period 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 balance sheet;

• the statement of changes in equity; and

• the related notes 1 to 23.

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, UK GAAP 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 employment law, the Pension Act, General Data Protection Regulation (GDPR) and health and safety law.

We discussed among the audit engagement team regarding the 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 area, and our procedures performed to address it are described below:

• Revenue recognition pinpointed to cut-off risk.

- We obtained a listing of sales transactions pre-year end and post year-end. For a sample of transactions, we compared the revenue recognition date to the supporting documents to verify that revenue was recorded in the correct period.

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; and

• enquiring of management concerning actual and potential litigation and claims, and instances of non-compliance with laws and regulations.

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 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 any material misstatements in the strategic report or 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 statement of comprehensive income has been prepared on the basis that all operations are continuing operations.

Robert Heath Heating Limited is a private company limited by shares incorporated in England and Wales. The registered office is Heath House, 264 Burlington Road, New Malden, Surrey, United Kingdom, KT3 4NN. The company's principal activity is stated in the Strategic report on page 1.

These financial statements cover the 9 month period ended 31 March 2025. This follows a change in reporting date with the purpose of aligning the company's financial reporting with other members of the Daikin group going forward. The comparatives represent the previous 12 month period ended 30 June 2024 and are not directly comparable.

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 33 ‘Related Party Disclosures’: Compensation for key management personnel;

• Section 29 'Income Tax': Deferred tax arising from Pillar Two legislation.

The financial statements of the company are consolidated in the financial statements of Daikin Europe N.V. These consolidated financial statements are available from its registered office address at Zandvoordestraat 300, B-8400 Oostende, Belgium.

The directors have carried out a review of the company's expected performance in conjunction with budgets and cash flow requirements of the business to assess going concern. Whilst the directors recognise that the company remains exposed to the risk of an uncertain environment and its impact on the global economy, they continue to review the business performance regularly throughout the going concern period. true

The directors have assumed that operations remain open and that the company will continue to service its customers.  Further, the directors believe there will be sufficient cash reserves to enable the company to meet its obligations as they fall due, for a period not less than 12 months from approval of these financial statements. The company has access to a group cash pooling arrangement with Daikin Europe Coordination Center N.V, as disclosed in Note 15, and can draw down amounts from this arrangement without restriction and on demand if required for operational needs. Thus, the directors continue to adopt the going concern basis of accounting in preparing the financial statements.

Turnover is measured at the fair value of the consideration received or receivable and represents amounts receivable for goods and services provided in the normal course of business, net of discounts, VAT and other sales related taxes.

The total turnover for the company for the period has been derived from its principal activity wholly undertaken in the United Kingdom.

Revenue from the sale of goods and services is recognised when the significant risks and rewards of ownership of the goods and services have passed to the buyer (usually on dispatch of the goods or completion of service), the amount of revenue can be measured reliably, it is probable that the economic benefits associated with the transaction will flow to the entity and the costs incurred or to be incurred in respect of the transaction can be measured reliably. Where payments are received in advance of the goods or services being delivered, they are recorded as deferred income and the amounts are included as part of creditors within one year.

Interest income is recognised when it is probable that the economic benefits will flow to the company and the amount of income can be measured reliably. Interest income is accrued on a time basis, by reference to the principal outstanding and the effective interest rate applicable.

Income in respect of government incentives for apprenticeship schemes is recognised on a systematic basis over the periods in which the entity recognises expenses for the related costs for which the grants are intended to compensate. Income is only recognised once all conditions and contingencies have been satisfied in full.

Research expenditure is written off against profits in the period in which it is incurred. Identifiable development expenditure is capitalised to the extent that the technical, commercial and financial feasibility can be demonstrated.

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 of assets less their residual values over their useful lives on the following bases:

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 of assets less their residual values over their useful lives on the following bases:

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 profit and loss account.

At each reporting end date fixed assets are reviewed to determine whether there is any indication that those assets have suffered an impairment loss. If there is an indication of possible impairment, the recoverable amount of any affected asset is estimated and compared with its carrying amount. If estimated recoverable amount is lower, the carrying amount is reduced to its estimated recoverable amount, and an impairment loss is recognised immediately in profit and loss.

If an impairment loss subsequently reverses, the carry amount of the asset is increased to the revised estimate of its recoverable amount, but not in excess of the amount that would have been determined had no impairment loss been recognised for the asset in prior periods. A reversal of an impairment loss is recognised immediately in profit and loss.

Stocks are stated at the lower of cost and net realisable value.

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

Cost is based on the initial cost of purchase on a first in, first out basis where appropriate.

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 and cash equivalents are basic financial assets and 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.

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

Financial assets are classified into specified categories. The classification depends on the nature and purpose of the financial assets and is determined at the time of recognition.

Basic financial assets, which include trade and other receivables and cash and bank balances, are measured at transaction price, less any impairment.

Loans and receivables are measured initially at fair value, net of transaction costs, and are measured subsequently at amortised cost using the effective interest method, less any 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. The impairment loss is recognised in profit or loss.

If there is a decrease in the impairment loss arising from an event occurring after the impairment was recognised, the impairment is reversed. The reversal is such that the current carrying amount does not exceed what the carrying amount would have been, had the impairment not previously been recognised. The impairment reversal 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.

Basic financial liabilities, including trade and other payables, bank loans and loans from fellow group companies, are measured at transaction price.

Trade payables are obligations to pay for goods and services that have been acquired in the ordinary course of business from suppliers. Amounts payable are classified as current liabilities if payment is due within one year or less. If not, they are presented as non-current liabilities.

Other financial liabilities, including bank loans, are measured initially at fair value, net of transaction costs, and are measured subsequently at amortised cost using the effective interest method.

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 period. Taxable profit differs from net profit as reported in the profit and loss account because it excludes items of income or expense that are taxable or deductible in other periods 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 profit and loss account, 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.

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.

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

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.

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 current period the directors have changed the accounting policy in relation to derecognition of financial liabilities owed to suppliers and settled via electronic payments. The previous accounting policy was to derecognise at the time the payment was submitted, but going forward amounts will not be derecognised until the payment clears the bank. This change in policy will provide more reliable information about amounts owed as at the balance sheet date.

The impact on the comparative period at 30 June 2024 is as follows:

For 31 March 2025, there is a balance of £1,049,554 held within Trade Creditors relating to an electronic payment not derecognised.

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.

Critical accounting judgements

In the process of applying the entity’s accounting policies, no critical judgements have been made that are considered to have a significant effect on the amounts recognised in the financial statements.

Key sources of estimation uncertainty

There are no key assumptions concerning the future, or other key sources of estimation uncertainty at the reporting date, that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities.

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

The total turnover for the company for the period has been derived from its principal activity wholly undertaken in the United Kingdom.

Other income consists of government grants received in respect of an apprenticeship scheme.

The average monthly number of persons (including directors) employed by the company during the 9 month period was:

Their aggregate remuneration comprised:

The number of directors for whom retirement benefits are accruing under defined contribution schemes amounted to 1 (2024 - 2).

As total directors' remuneration was less than £200,000 in the current 9 month period, no disclosure is provided for that 9 month period.

During the period, the company did not pay any compensation to directors or past directors in respect of loss of office (2024: £nil).

Other interest comprises interest paid to HMRC on corporation tax.

Tax rate changes

From 1 April 2023 the corporation tax rate increased to 25%. There has been no change to corporation tax rates during the financial period ended 31 March 2025. Deferred taxes at the balance sheet date have been measured using these enacted tax rates and reflected in these financial statements.

OECD Pillar Two model rules

The company is a member of a multinational enterprise (MNE) group whose consolidated revenue exceeds €750 million. As such, the company is within the scope of the OECD Pillar Two model rules, which came into effect from 1 January 2024.

Per Pillar Two rules, the company is liable to pay a top-up tax on adjusted jurisdictional profits on the difference between its GloBE effective tax rate per jurisdiction where the group operates and the 15% minimum tax rate. These rules apply to qualifying groups at the consolidated level.

The company is not the ultimate parent entity and is not responsible for calculating or reporting Pillar Two tax liabilities. The group’s compliance obligations are being addressed at the parent entity level.

The company applies the exception to recognising and disclosing information about deferred tax assets and liabilities related to Pillar Two income taxes, as provided in the amendments to FRS 102 section 29 issued in July 2023.

The actual charge for the 9 month period can be reconciled to the expected charge for the 9 month period based on the profit or loss and the standard rate of tax as follows:

Trade debtors disclosed above are measured at amortised cost.

Amounts owed by group undertakings comprise £12,871,982 (2024: £12,487,726) relating to a group cash pooling arrangement which is repayable on demand and accumulates interest at GBP SONIA less intercompany margin calculated by Daikin Europe Coordination Center N.V, a fellow group undertaking, from time to time.

Amounts due to group undertakings are unsecured, do not attract interest and are repayable under normal business trading terms.

The following are the major deferred tax liabilities and assets recognised by the company and movements thereon:

The amount of the net reversal of deferred tax expected to occur next year is £67,947 (2024: £47,836) relating to the reversal of existing timing differences on tangible fixed assets.

There are no unused tax losses nor tax credits.

Deferred tax assets and liabilities are offset where the company has a legally enforceable right to do so.

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 were no commitments for defined contribution liabilities at the period end.

The company has one class of ordinary shares which carry no right to fixed income.

The total authorised share capital is 1,000 shares of £1 each.

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:

The company occupies a building that is leased by an intermediate parent on a rolling basis.

The company has taken advantage of the exemption conferred by FRS102 section 33 from the requirement to disclose transactions with group companies on the grounds that consolidated financial statements are prepared.

The immediate parent company is Robert Heath Group Limited, company no. 06713680, registered in England and Wales.

The company's results are consolidated into group accounts prepared by Daikin Europe N.V., a company registered in Belgium. This is the parent undertaking of the smallest group to consolidate these financial statements. Copies of these group financial statements are available from their registered office address at Zandvoordestraat 300, B-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 these group financial statements are available from their registered office address at Umeda Center Bldg., 2-4-12, Nakazaki-Nishi, Kita-ku, Osaka. 530-8323, Japan.