Caseware UK (AP4) 2022.0.179 2022.0.179 2023-12-312023-12-312023-12-31324false3702023-01-01The principal activity of the Company is the design, manufacture and marketing of electronic variable speed drives for electronic motor control.falsefalse 03504834 2023-01-01 2023-12-31 03504834 2022-01-01 2022-12-31 03504834 2023-12-31 03504834 2022-12-31 03504834 2022-01-01 03504834 c:Director1 2023-01-01 2023-12-31 03504834 c:Director2 2023-01-01 2023-12-31 03504834 c:Director3 2023-01-01 2023-12-31 03504834 c:Director5 2023-01-01 2023-12-31 03504834 c:Director6 2023-01-01 2023-12-31 03504834 c:Director7 2023-01-01 2023-12-31 03504834 c:Director8 2023-01-01 2023-12-31 03504834 c:Director9 2023-01-01 2023-12-31 03504834 c:Director11 2023-01-01 2023-12-31 03504834 c:Director12 2023-01-01 2023-12-31 03504834 c:Director13 2023-01-01 2023-12-31 03504834 c:Director14 2023-01-01 2023-12-31 03504834 c:Director15 2023-01-01 2023-12-31 03504834 c:RegisteredOffice 2023-01-01 2023-12-31 03504834 d:Buildings 2023-01-01 2023-12-31 03504834 d:Buildings 2023-12-31 03504834 d:Buildings 2022-12-31 03504834 d:Buildings d:OwnedOrFreeholdAssets 2023-01-01 2023-12-31 03504834 d:PlantMachinery 2023-01-01 2023-12-31 03504834 d:PlantMachinery 2023-12-31 03504834 d:PlantMachinery 2022-12-31 03504834 d:PlantMachinery d:OwnedOrFreeholdAssets 2023-01-01 2023-12-31 03504834 d:OtherPropertyPlantEquipment 2023-01-01 2023-12-31 03504834 d:OtherPropertyPlantEquipment 2023-12-31 03504834 d:OtherPropertyPlantEquipment 2022-12-31 03504834 d:OtherPropertyPlantEquipment d:OwnedOrFreeholdAssets 2023-01-01 2023-12-31 03504834 d:OwnedOrFreeholdAssets 2023-01-01 2023-12-31 03504834 d:DevelopmentCostsCapitalisedDevelopmentExpenditure 2023-12-31 03504834 d:DevelopmentCostsCapitalisedDevelopmentExpenditure 2022-12-31 03504834 d:Goodwill 2023-01-01 2023-12-31 03504834 d:CurrentFinancialInstruments 2023-12-31 03504834 d:CurrentFinancialInstruments 2022-12-31 03504834 d:CurrentFinancialInstruments d:WithinOneYear 2023-12-31 03504834 d:CurrentFinancialInstruments d:WithinOneYear 2022-12-31 03504834 d:ShareCapital 2023-01-01 2023-12-31 03504834 d:ShareCapital 2023-12-31 03504834 d:ShareCapital 2022-01-01 2022-12-31 03504834 d:ShareCapital 2022-12-31 03504834 d:ShareCapital 2022-01-01 03504834 d:SharePremium 2023-01-01 2023-12-31 03504834 d:SharePremium 2023-12-31 03504834 d:SharePremium 2022-01-01 2022-12-31 03504834 d:SharePremium 2022-12-31 03504834 d:SharePremium 2022-01-01 03504834 d:RetainedEarningsAccumulatedLosses 2023-01-01 2023-12-31 03504834 d:RetainedEarningsAccumulatedLosses 2023-12-31 03504834 d:RetainedEarningsAccumulatedLosses 2022-01-01 2022-12-31 03504834 d:RetainedEarningsAccumulatedLosses 2022-12-31 03504834 d:RetainedEarningsAccumulatedLosses 2022-01-01 03504834 c:OrdinaryShareClass1 2023-01-01 2023-12-31 03504834 c:OrdinaryShareClass1 2023-12-31 03504834 c:OrdinaryShareClass1 2022-12-31 03504834 c:FRS102 2023-01-01 2023-12-31 03504834 c:Audited 2023-01-01 2023-12-31 03504834 c:FullAccounts 2023-01-01 2023-12-31 03504834 c:PrivateLimitedCompanyLtd 2023-01-01 2023-12-31 03504834 d:Subsidiary1 2023-01-01 2023-12-31 03504834 d:Subsidiary1 1 2023-01-01 2023-12-31 03504834 d:Subsidiary2 2023-01-01 2023-12-31 03504834 d:Subsidiary2 1 2023-01-01 2023-12-31 03504834 d:Subsidiary3 2023-01-01 2023-12-31 03504834 d:Subsidiary3 1 2023-01-01 2023-12-31 03504834 d:Subsidiary4 2023-01-01 2023-12-31 03504834 d:Subsidiary4 1 2023-01-01 2023-12-31 03504834 d:Subsidiary5 2023-01-01 2023-12-31 03504834 d:Subsidiary5 1 2023-01-01 2023-12-31 03504834 d:WithinOneYear 2023-12-31 03504834 d:WithinOneYear 2022-12-31 03504834 d:BetweenOneFiveYears 2023-12-31 03504834 d:BetweenOneFiveYears 2022-12-31 03504834 d:MoreThanFiveYears 2023-12-31 03504834 d:MoreThanFiveYears 2022-12-31 03504834 d:AcceleratedTaxDepreciationDeferredTax 2023-12-31 03504834 d:AcceleratedTaxDepreciationDeferredTax 2022-12-31 03504834 d:OtherDeferredTax 2023-12-31 03504834 d:OtherDeferredTax 2022-12-31 03504834 c:Consolidated 2023-12-31 03504834 c:ConsolidatedGroupCompanyAccounts 2023-01-01 2023-12-31 03504834 d:DevelopmentCostsCapitalisedDevelopmentExpenditure d:ExternallyAcquiredIntangibleAssets 2023-01-01 2023-12-31 03504834 6 2023-01-01 2023-12-31 03504834 d:DevelopmentCostsCapitalisedDevelopmentExpenditure d:OwnedIntangibleAssets 2023-01-01 2023-12-31 xbrli:shares iso4217:GBP xbrli:pure

Registered number: 03504834










INVERTEK DRIVES LIMITED










ANNUAL REPORT AND FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2023

 
INVERTEK DRIVES LIMITED
 
 
COMPANY INFORMATION


Directors
Joris Felicitas Francois Blommaerts 
Florian Butzmann 
Toshihiko Chijiiwa 
Shaun Dean 
Adrian David Ellam 
Nicola Guarino 
Dr David Mark Jones 
Glyn Owen Jones 
Shoko Takita 
Makoto Tamaki 
Tommy Tighe 
Rhydian Craig Welson 
Akira Yamamoto 




Registered number
03504834



Registered office
Offa's Dyke Business Park

Welshpool

Powys

SY21 8JF




Independent auditors
WR Partners
Chartered Accountants & Statutory Auditors

Hafren House

10 St Giles Business Park

Newtown

Powys

SY16 3AJ





 
INVERTEK DRIVES LIMITED
 

CONTENTS



Page
Group strategic report
 
1 - 8
Directors' report
 
9 - 15
Independent auditors' report
 
16 - 19
Consolidated statement of comprehensive income
 
20
Consolidated statement of financial position
 
21 - 22
Company statement of financial position
 
23 - 24
Consolidated statement of changes in equity
 
25
Company statement of changes in equity
 
26
Consolidated Statement of cash flows
 
27 - 28
Notes to the financial statements
 
29 - 53


 
INVERTEK DRIVES LIMITED
 
 
GROUP STRATEGIC REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023

Business review
 
The Directors of Invertek Drives are pleased to announce the following highlights for the financial year ended 31 December 2023:
ole5e15.png
As a result of very strong sales growth of 27% (which is on top of exceptionally strong prior year growth of 45%), and of further increases in the UK production efficiency and capacity, the Group yielded a pre-tax profit of £15.7m (16% of turnover).
Due to a market adjustment and customer correction to stockholding levels, the Group’s order book, having been at unsuitably high levels throughout much of 2022 and 2023, finally returned by the year end to a more normal level representing the standard and desired customer lead time of 4 weeks.
We continue to invest in our manufacturing and warehouse capacity, increasing it in line with current sales growth. During 2023 construction work began on a 2,750sq metre extension to our manufacturing and warehouse facilities which will increase output capacity by 60-70%. This is expected to be complete in Q2 2024. 
We are also on track for the construction of a dedicated standalone Innovation Centre and HQ within the next 12-24 months, which will enhance and optimise our R&D capability, including software technology to support our business growth and help us to attract and retain highly competitive engineering talent.
Innovation remains at the heart of our business, serving as a key driver for future growth. This year, we proudly launched the new Optidrive Elevation Core VFD at Interlift, a major international elevator exposition held in Augsburg, Germany. The launch garnered significant international media attention and endorsements from leading industry figures and senior media editors. The VFD is due for release in Q2 2024, eventually replacing our current Optidrive Elevator VFD.
Once again our Field Failure Rate was further reduced to our lowest ever, helping to increase our reputation for manufacturing reliable products and remaining a positive reason for our customer base to choose us.
The Directors would like to place on record their thanks and appreciation to our dedicated workforce and acknowledge that this would not be possible without their valued support.
 
Page 1

 
INVERTEK DRIVES LIMITED
 

GROUP STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023

Marketing Communications Activity
2023 saw Invertek Drives celebrate its 25th anniversary with a Welsh themed event in June incorporating the official opening of our world-class Application & Training Centre. In attendance were customers and sales partners from around the world, along with VIPs such as The Japanese Ambassador to the UK, His Excellency Mr Hajime Hayashi, and the then UK Foreign Secretary, the Right Honourable James Cleverly MP.
We attended 6 trade shows throughout the year including countries such as Germany, Italy, Brazil and the USA. These shows continue to promote our excellent range of products to the market as well as continuing to grow our brand awareness globally.
A key marketing campaign was focused on the Refrigeration sector where we continue to have an excellent product offering with products such as the E3, Eco and specifically the Coolvert drive. Variable speed compressor control in applications such as heat pumps is proving more and more popular with the demand for greater energy efficiencies. We continue to promote our products in this particular sector using social media, video content, application success stories, PR and focused trade shows.
We increased our media and communications activity during the year, focused on developing increased media coverage, particularly in vertical markets, such as elevators, pumping, refrigeration, and ventilation. We also placed greater emphasis on our brand reputation and public affairs activity. 
Q4 of 2023 saw the launch of our next generation elevator product called Elevator Core. The official unveiling to the public took place at the Interlift trade show in Augsburg, Germany. The lead up to the trade show consisted of a multi-channel marketing campaign to generate interest and intrigue in this new drive.
We were named Manufacturer of the Year 2023 at the Made in Wales Awards in Cardiff in November and have been shortlisted for the UK Manufacturer of the Year 2024.

Page 2

 
INVERTEK DRIVES LIMITED
 

GROUP STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023

Principal risks and uncertainties
 
The risks facing the Group are constantly monitored and assessed. The Group’s business activities, financial condition and trading results could be affected by any or all of the following risks and uncertainties:
General business conditions and the economy
The Directors are of the opinion that the principal risks facing the Group relate to the wider global economic conditions which influence raw material cost, pricing and the demand for products. A continuing short-term deterioration in economic conditions should not have a significant adverse impact on the business, but a continued downturn over a period of years would result in weaker profits in this area. The Group seeks to manage these risks by maintaining appropriate market segments, product range, supplier base and production systems.
Supply of components
The supply of components remained a challenge in the first half of 2023, with the largest financial impact coming from a shortage of power modules. However, by the second half of the year, this constraint eased, and no significant shortages of any components are present as we enter 2024.
Information systems
The Group is reliant upon several business systems which, if disrupted for any length of time due to damage or interruption from loss of power, failure of telecommunications, sabotage or vandalism could have an adverse effect on the efficiency running of the Group’s business. The board has put in place a number of contingency plans to manage the impact of such system failures, including during 2023 the installation of a secondary server in separate premises to the first.
Innovation and development
The VFD industry is extremely competitive and there is a risk that failure to keep up to date with latest technology and processes could result in the Group becoming uncompetitive, hence the Group continues to invest in research and development and product innovation.
Competition
The Group completes in the variable frequency drives market with other manufacturers and distributors on a global basis. The Group manages these risks through its emphasis on innovation, the quality of its products and customer service combined with a competitive pricing policy.
 
Page 3

 
INVERTEK DRIVES LIMITED
 

GROUP STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023

Dependence on key members of management and staff
The Group is reliant on key members of the management team and specialist trained personnel in several areas. The loss of a number of key staff would have a material adverse effect on the business. Furthermore, should the Group fail to recruit and retain key staff this would impact on the future financial condition of the Group. Efforts have come to fruition during the year to identify the senior management personnel across the Company departments, to reduce reliance on the Directors.
Regulatory compliance
The Group is subject to regulatory compliance risk which could arise from a failure to comply with relevant law, regulation or codes of practice. Failure to comply would result in fines, cessation of some business activities or a public reprimand. The Group manages this risk through close monitoring of regulatory compliance.
Health and safety
In common with all manufacturing businesses the factory environment exposes the Group to health and safety risk. The Directors take the health and safety of its employees and any third party on its sites very seriously and are mindful of health and safety regulatory compliance. Consequently they have in place stringent policies and procedures which are appropriate communicated and monitored by a designated Health and Safety Officer. The Directors are pleased with the Group’s excellent health and safety record.
Financial risk management
The Group’s operations expose is to a variety of financial risks that include the effects of pricing risk, credit risk, currency risk, liquidity risk and interest rate risk. The Group has in place a risk management program that seeks to limit any adverse effects on the financial performance of the Group by monitoring levels of debt finance and the related finance costs.
Pricing risk
The Group operates in competitive markets and as such it monitors and manages its costs and continually reviews its pricing strategy which allows it to quote competitive prices.
Credit risk
The Group operates procedures that require appropriate credit checks on potential customers before sales are made. Credit insurance is taken out on all debtors, where available, and credit limits are set in accordance with that insurance. The amount of exposure to any uninsured individual counterparty is also subject to an appropriate limit, which is reassessed on an ongoing basis.
Currency risk
The Group’s principal currency exposures are to the Euro, US Dollar and Yuan. In particular the Group generates a substantial part of its profits from the Eurozone, and as such is exposed to the economic uncertainty of its member states. The Group continues to monitor potential exposures and risks, and consider effective risk management solutions.
Balance sheet Euro translation exposure is currently hedged by maintaining a proportion of the Group’s debt in Euro. It is the Group’s policy not to hedge the translation of overseas earnings into Sterling.
 
Page 4

 
INVERTEK DRIVES LIMITED
 

GROUP STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023

Liquidity risk
Liquidity risk relates to the Group’s having sufficient financing and borrowing to pay for the goods and services required to operate. The Group is financed by HSBC through term loans, stocking loans and overdraft facilities. The Group is also dependent on trade credit from suppliers.
The Group actively maintains a mixture of long term and short term debt finance that is designed to ensure that it has sufficient available funds for operations and any planned expansions.
Interest rate risk
All of the Group’s borrowing facilities are linked to Euribor, Finance House Base Rate and Bank Base Rate. No financial instruments are used to hedge exposure to interest rate risk. The Group continues to review on a quarterly bases the appropriateness of interest rate hedging in the light of current and anticipated Money Market movements.

Financial key performance indicators
 
Certain financial key performance indicators have been provided in the Business review section of this report. Broadly, the balance sheet of the business remains strong and profits have increased over the period. The statement of comprehensive income, statement of financial position, statement of cash flows and associated notes (as detailed on the following pages) adequately show the development, performance and position of the Group over the course of the year.

Other key performance indicators
 
The Group uses a suite of non-financial KPIs to monitor and measure success on a weekly basis which cover the whole business operating spectrum reflecting the changing needs of the business.
The Group has a policy to protect the environment wherever we operate or source materials.
In addition, other non-financial areas of the business such as customer service, staff productivity and wellbeing indicators considered key to the business are also monitored using KPIs.

Page 5

 
INVERTEK DRIVES LIMITED
 

GROUP STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023

Directors' statement of compliance with duty to promote the success of the Group
 
Section 172(1) statement and Statements on engagement with employees, suppliers, customers and others
This Section acts as the Group’s Section 172(1) statement. In accordance with the Large and Medium sized Companies and Groups (Accounts and Reports) Regulations 2008 (as amended by the Companies (Miscellaneous Reporting) Regulations 2018), this section also constitutes the Group’s statements on engagement with, and having due regard to the interest of our employees, suppliers, customers and other key stakeholders.
The Directors consider, both individually and together, that they have acted in the way they consider, in good faith, would be most likely to promote the success of the Group for the benefit of its members as a whole in the decisions taken during the year ended 31 December 2023.
Decision-making at the Board
All matters which are reserved for decision by the Directors are presented at Board meetings. Directors are briefed on any potential impacts and risks for our customers, employees and other stakeholders including our suppliers, the community and the environment and how they are to be managed. The Directors take these factors into account before making a final decision which together they believe is in the best interests of the Group.
Stakeholders
Our key stakeholders are our employees, who are the heart of our purposes and work in service of our customers. We are focused on responding to the needs of, and building long-term relationships with, our customers. Other key stakeholders are the producers and suppliers from whom we purchase goods and services, and the communities in which we operate.
Employees
Our team members are key to our success.  We aim to be a responsible employer in our approach to the pay and benefits our team members receive, and the health, safety and well-being of our team members is one of our primary considerations in the way we do business. 
We seek to communicate fully with employees so that they understand and support the Group’s objectives and goals and how they can assist in the delivery of this, and to enable us to retain, develop and acquire the talent required to continue to grow and remain successful. Employees are informed of matters affecting them and the overall development of the Group, with communication being made through a new Intranet introduced in 2023 as well as as formal and informal meetings, or through information bulletins which seek to achieve a common awareness on the part of all employees of the financial and economic factors affecting the Group’s performance. The formal appraisal system in place is a two-way system which encourages employees to discuss business operations and invites their views and comments. 
Training and career development are actively encouraged and are available to all employees based on their ability and the requirements of the Group. The Group maintains a policy of equal opportunities and is committed to ensuring that all individuals are treated fairly, with respect and are valued. Policies for recruitment, selection, training, development and promotion are designed to ensure that no job applicant or employee receives less favourable treatment on the grounds of race, colour, nationality, ethnic or national origin, religion, political beliefs, sex or marital status.
 
Page 6

 
INVERTEK DRIVES LIMITED
 

GROUP STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023

Customers and suppliers
Engagement with suppliers and customers is key to our success. We work closely with our supply chain and take the appropriate action, when necessary, to prevent involvement in modern slavery, corruption, bribery and breaches of competition law.
The Board recognises the importance of building strong relationships with suppliers. Our suppliers provide products and services that helps us to execute our strategy. We source from across the world and have internal and external suppliers in many countries with whom we work collaboratively to build strong relationships.
We have critical suppliers with which our procurement team is regularly in touch, seeking regular updates on their situation and any potential supply impacts. Supply chain risk from various factors including global conflict and COVID-19 now encompasses the global supply chain and impacts both products and services. Our critical suppliers have been able to deliver products and services to the extent that our broad infrastructure and operations have not been drastically affected.
We recognise that developing a strong understanding of customers’ needs and putting this into our product development, our business and strategy is critical. Meeting the needs of customers takes many forms. This has included, for instance, providing drive solutions to help customers to significantly reduce energy costs and improve operating efficiency.
Modern Slavery responsibilities
We recognise that our biggest exposure to Modern Slavery is in our product supply chain. We believe that we are a low risk employer, but that there is always room for improvement and education. Our aim is to eliminate, as far as is possible, the risk of modern slavery within the supply chain and to trade both ethically and with integrity throughout our entire business, and we are committed to ensuring that there is no modern slavery or human trafficking in our supply chains or in any part of our business. 
Corporate Social Responsibility
Invertek Drives is committed to conducting its business responsibly and sustainably, recognising our impact on the environment and the wider community. We injected more than £20 million directly into the local economy during the year through payroll and supply chains. 
We are proud to have achieved ISO 26000, underscoring our dedication to ethical practices across all areas of operation. 
This year, we continued to focus on reducing our environmental footprint through eco-design principles and energy-efficient product development, including the introduction of additional PV technology that will help us achieve Net Positive and Zero on some days, reducing our reliance on mains grid electricity.
Additionally, we actively support local communities through charitable partnerships and fundraising. We believe that responsible business practices contribute not only to long-term success but also to building a more positive and sustainable future.
Long-term sustainability
We aim to make sufficient profits to sustain the Group’s commercial vitality. This is balanced against the needs of our customers, employees and other stakeholders and the community to ensure we are conducting all our business relationships with integrity. The long-term sustainability of the Group is at the forefront of decision-making, particularly in response to the challenging conditions caused by the COVID-19 pandemic and its continued potential for significant adverse impact on the global economy.
 
Page 7

 
INVERTEK DRIVES LIMITED
 

GROUP STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023

Community and environment
The Directors recognise that engagement with local communities, local government, regulators and others is important to our physical presence and to foster positive relationships with them. 
We have increased our Public Affairs activity and we use a variety of mechanisms to engage with these stakeholders, including face-to-face meetings, conferences, facility tours and hosting groups for workshops and educational sessions. We use the media and social media to also engage with local and regional audiences.
Updates on these mechanisms and initiatives for engagement are then used to inform decision making, where relevant.
The Group takes all reasonable steps to minimise any detrimental impact that its operations may have on the environment. Directors routinely assess the impact of the Group’s operations on the community and environment and wider social responsibilities, and in particular how we comply with environmental legislation and pursue waste-saving opportunities and react promptly to local community concerns. 
It is now the Company’s policy that all new company cars must be fully electric, and free on-site charging is offered for all employee electric cars, whether company-owned or privately-owned. The majority of the electricity required for this is generated from the Company’s Solar PV equipment.
Financial stakeholders
The Group seeks to make information available to financial stakeholders, including our relationship bank, as part of information provided about and by the Group.
Business conduct
As the Board of Directors, our intention is to behave responsibly and ensure that the management operate the business in a responsible manner, operating within the high standards of business conduct and governance. We seek to conduct all business relationships with integrity and courtesy, and scrupulously to honour every business agreement.


This report was approved by the board and signed on its behalf.





Adrian David Ellam
Director

Date: 29 February 2024

Page 8

 
INVERTEK DRIVES LIMITED
 
 
 
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023

The Directors present their report and the financial statements for the year ended 31 December 2023.

Directors' responsibilities statement

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

 In preparing these financial statements, the Directors are required to:


select suitable accounting policies for the Group's financial statements and then apply them consistently;

make judgments 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;

prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Group 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 the Group and to enable them to ensure that the financial statements comply with the Companies Act 2006They are also responsible for safeguarding the assets of the Company and the Group and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

Results and dividends

The profit for the year, after taxation, amounted to £13,500,285 (2022 - £7,612,484).

No dividends have been paid during the year (2022: £nil).

Page 9

 
INVERTEK DRIVES LIMITED
 
 
 
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023


Directors

The Directors who served during the year were:

Joris Felicitas Francois Blommaerts 
Florian Butzmann 
Toshihiko Chijiiwa 
Shaun Dean 
Adrian David Ellam 
Nicola Guarino 
Dr David Mark Jones 
Glyn Owen Jones 
Shoko Takita 
Makoto Tamaki 
Tommy Tighe 
Rhydian Craig Welson 
Akira Yamamoto 

Future developments

The strategy of the Group is to maintain recent growth and margin levels. Overall 2023 has been a fantastic period and the Group’s projections suggest that 2024 will be a year of consolidation with results broadly in line with 2023, before sharp growth resumes in 2025, aided by the substantial ongoing £10m investment in the UK manufacturing and distribution centre.

Research and development activities

The Group is actively engaged in research and development activities through continuous new product development. The development of a new and dedicated Innovation Centre through 20204/2025 will support this.

Disabled employees

It is our policy to give full and fair consideration to the employment of disabled persons in jobs suited to their individual circumstances and, as appropriate, to consider them for recruitment opportunities, career development and training. Where possible, arrangements are made for the continuing employment of employees who have become disabled whilst in our employment.

Page 10

 
INVERTEK DRIVES LIMITED
 
 
 
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023


Greenhouse gas emissions, energy consumption and energy efficiency action

The reporting period that this submission covers is 1 January 2023 to 31 December 2023.

Reporting Methodology
We have followed the HM Government Environmental Reporting Guidelines: including streamlined energy and reporting guidance March 2019.
We have used data collected specifically for the purpose of SECR reporting.
We have used the 2023 UK Conversion Factors for Company Reporting.
Organisational Boundary
We have used the financial control approach, but as our organisation is a single entity, there are no other businesses to consider.
Operational Scopes
We have measured our Scope 1 and Scope 2 emissions and also included scope 3 emissions related to hire car/vehicle usage and employee usage of their own vehicles, where they reclaim fuel costs, together with voluntary reporting of air miles flown and associated emissions.
We have also reported on the renewable energy generated and consumed on site.
As per 2022, we have expanded our voluntary emissions reporting to include data associated with kilometres (km) travelled on commercial flights associated with business travel.
 
Page 11

 
INVERTEK DRIVES LIMITED
 
 
 
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023

ole390b.png

Page 12

 
INVERTEK DRIVES LIMITED
 
 
 
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023

Intensity Ratio
The intensity ratio chosen was tCO2e per drive produced, as per previous reporting periods. For this reporting period a total of 375,834 drives were produced, an increase of 3,791 (1%) on the 2022 production level of 372,043 drives. As a result, the intensity metric for the period equated to 0.0003958 tCO2e (or 0.3958 kgCO2e) per drive produced in 2023. This intensity metric was initially chosen as it was deemed to be the best metric which could be utilised over time in order to reflect changes in our energy consumption, but also reflect changes in production volume. This metric is broadly comparable with the recognised intensity metric of tCO2e per total tonnes of production for the manufacturing industry sector. For the previous year, the equivalent metric equated to 0.0005552 tCO2e. As a result, 2023’s intensity metric reflects a 0.0001594 tCO2e (0.1594 kgCO2e) or 29% improvement year on year, which is commendable and supports the original decision to adopt this intensity metric. This is even more noteworthy on account that this improvement was achieved against the backdrop of a year-on-year improvement in 2022 of 21%.
Energy Efficiency Actions
As an BS EN 14001 registered company, we place environmental management at the heart of our business operations and operate an Environmental Policy. Whilst the Environmental Team meets to review the effectiveness of the Environmental Management System at six monthly intervals, an annual Environmental Management Review acts as the director attended forum to both review past performance and set new annual targets including electricity, water and gas consumption and company vehicle emissions. In 2023 we had intended to re-align our reporting to enable measurement and validation of energy efficiency measures implemented to be recorded in our SECR report; however, due to other operational priorities taking precedence, we have been forced to further delay this until 2024.
In 2023 the first phase of a major investment to implement a further 175 kWp on-site solar Pv generation capacity was completed and made operational by end of July, resulting in 51,707 kWh of on-site electricity generation and consumption by year end. As a result of this level of on-site generated electricity consumption, we were able to displace 10.7 tCO2e of GHG emissions that would have arisen with imported electricity. As overall imported electricity consumption increased in 2023, there was a corresponding rise in resultant CO2e emissions. Conversely the reduction in gas consumption at the site, predominantly attributed to periods of non-production during the year, supplemented by heating degree day reduction in 2023, resulted in a dramatic fall in Scope 1 emissions associated with combustion of gas.
By the end of November 2023 a further 184.5 kWp of solar Pv capacity was installed, however not yet commissioned. This is expected to be commissioned in early 2024 with the majority of additional generation being consumed on site. The total potential capacity of solar Pv approved by Scottish Power Energy Networks (SPEN) for grid connection at the site amounts to 570 kWp. A further 184.5 kWp expansion of solar Pv generation capacity on site during 2024 has been submitted for Capex approval. On the basis that this additional capacity is added, the total site capacity will reach 544 kWp against the 570 kWp limit prescribed.
Redevelopment of Unit 3, as part of which of upgrading to insulation levels was completed in November 2023. Verification of reductions in gas consumption resulting from the improvement in thermal performance will be undertaken in 2024. Expansion to the production and warehouse building progressed significantly in 2023 and is on track to complete in February 2024 and production to commense shortly thereafter.
 
Page 13

 
INVERTEK DRIVES LIMITED
 
 
 
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023

By the end of 2023, all bar two company cars have been migrated to electric vehicles (EVs), with the remaining two petrol hybrids. A petrol on site van has also been replaced with an electric van. Offsite EV charging increased year on year. This is reflected in an increase in offsite/public charging network EV charging to 16,860 kWh 13,041 kWh (13,041 kWh in 2022), an increase of 29% year on year. In contrast, during 202 combined petrol and diesel kWh equivalent usage reduced to 101,591 kWh from 118,426 kWh in 2022, a decrease of 14%. The continued migration of company vehicles to electric (EV) variants is reflected in a 8.54 tCO2e reduction in transport fuel combustion emissions compared to 2022.
Whilst during 2023 the site underwent redevelopment to Unit 3 and additional production/warehouse construction, including the expansion of on-site electricity generation via solar Pv to circa 360 kWp, for 2024 there are a range of additional initiatives targeted to combat GHG emissions; namely:
 - Implementation of additional 184.5 kWp on site solar Pv electricity generation capacity with the     majority of generation to be consumed on site
 - Implementation of plastic compactors within production, warehouse and service centre is expected   to dramatically reduce waste volumes at the site
 - Supply chain procurement 3 year project continues (Year 2) – under a project being led by     purchasing, the aim is to source more parts required in our manufacturing process from
  Europe rather than China. This will reduce air/sea miles associated with goods travelling from     China and pallets are more likely to be euro pallets which we can reuse for the dispatch of finished   goods
 - The building extension on Production and Warehouse due to complete in Q1 of 2024, will reduce    the requirement for van travel to the Service Centre

Matters covered in the Group Strategic Report

Disclosure of principal risks and uncertainties, financial risk management policies, and engagement with employees, suppliers, customers and others are included in the Strategic Report.

Disclosure of information to auditors

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 and the Group's auditors are 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 and the Group's auditors are aware of that information.

Post balance sheet events

There have been no significant events affecting the Group since the year end.

Page 14

 
INVERTEK DRIVES LIMITED
 
 
 
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023


Auditors

The auditorsWR Partnerswill be proposed for reappointment in accordance with section 485 of the Companies Act 2006.

This report was approved by the board and signed on its behalf.
 





................................................
Adrian David Ellam
Director

Date: 29 February 2024

Page 15

 
INVERTEK DRIVES LIMITED
 
 
 
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF INVERTEK DRIVES LIMITED
 

Opinion


We have audited the financial statements of Invertek Drives Limited (the 'parent Company') and its subsidiaries (the 'Group') for the year ended 31 December 2023, which comprise the Group Statement of comprehensive income, the Group and Company Statements of financial position, the Group Statement of cash flows, the Group and Company Statement of changes in equity and the related notes, including a summary of significant accounting policiesThe financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 ‘The Financial Reporting Standard applicable in the UK and Republic of Ireland' (United Kingdom Generally Accepted Accounting Practice).


In our opinion the financial statements:


give a true and fair view of the state of the Group's and of the parent Company's affairs as at 31 December 2023 and of the Group's profit for the year then ended;
have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and
have been prepared in accordance with the requirements of the Companies Act 2006.


Basis for opinion


We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditors' responsibilities for the audit of the financial statements section of our report. We are independent of the Group in accordance with the ethical requirements that are relevant to our audit of the financial statements in the United Kingdom, including the Financial Reporting Council'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 Group's or the parent 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.


Page 16

 
INVERTEK DRIVES LIMITED
 
 
 
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF INVERTEK DRIVES LIMITED (CONTINUED)


Other information


The other information comprises the information included in the Annual Report other than the financial statements and  our Auditors' 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.


Opinion 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 Group 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 Group strategic report and the Directors' report have been prepared in accordance with applicable legal requirements.


Matters on which we are required to report by exception
 

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


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


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


Page 17

 
INVERTEK DRIVES LIMITED
 
 
 
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF INVERTEK DRIVES LIMITED (CONTINUED)


Responsibilities of directors
 

As explained more fully in the Directors' responsibilities statement set out on page 9, 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 Group's and the parent 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 Group or the parent Company or to cease operations, or have no realistic alternative but to do so.


Auditors' responsibilities for the audit of the financial statements
 

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an Auditors' 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 Group financial statements.


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

The audit team obtained an understanding of the legal and regulatory frameworks that are applicable to the Company and the Group and determined that the most significant are those that relate to the reporting framework (FRS102 and the Companies Act 2006), the relevant tax compliance regulations, employment law, Health and Safety Regulations and the EU General Data Protection Regulation (GDPR). 
We understood how the Company and the Group are complying with these frameworks by making enquiries of management and those responsible for legal and compliance procedures. We also reviewed board minutes to identify any recorded instances of irregularity or non compliance that might have a material impact on the financial statements. 
We assessed the susceptibility of the Company and Group's financial statements to material misstatement, including how fraud might occur by meeting with key management to understand where they considered there was susceptibility to fraud. Based on our understanding our procedures involved enquiries of management and those charged with governance, manual journal entry testing, cashbook reviews for large and unusual items and the challenge of significant accounting estimates used in preparing the financial statements.


Because of the inherent limitations of an audit, there is a risk that we will not detect all irregularities, including those leading to a material misstatement in the financial statements or non-compliance with regulation. This risk increases the more that compliance with a law or regulation is removed from the events and transactions reflected in the financial statements, as we will be less likely to become aware of instances of non-compliance.  The risk is also greater regarding irregularities occurring due to fraud rather than error, as fraud involves intentional concealment, forgery, collusion, omission or misrepresentation.


Page 18

 
INVERTEK DRIVES LIMITED
 
 
 
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF INVERTEK DRIVES LIMITED (CONTINUED)


A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council's website at: www.frc.org.uk/auditorsresponsibilities. This description forms part of our Auditors' report.


Use of our report
 

This report is made solely to the Company's members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006Our 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 Auditors' 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.





John Fletcher BA (Hons) FCA (Senior statutory auditor)
  
for and on behalf of
WR Partners
 
Chartered Accountants
Statutory Auditors
  
Hafren House
10 St Giles Business Park
Newtown
Powys
SY16 3AJ

 
Date: 
29 February 2024
Page 19

 
INVERTEK DRIVES LIMITED
 
 
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2023

2023
2022
Note
£
£

  

Turnover
 4 
96,960,682
76,273,282

Cost of sales
  
(47,347,779)
(41,530,251)

Gross profit
  
49,612,903
34,743,031

Administrative expenses
  
(33,171,833)
(25,390,355)

Other operating income
 5 
-
280,880

Operating profit
 6 
16,441,070
9,633,556

Income from participating interests
  
-
6,000

Interest payable and similar expenses
 10 
(708,757)
(258,623)

Profit before taxation
  
15,732,313
9,380,933

Tax on profit
 11 
(2,232,028)
(1,768,449)

Profit for the financial year
  
13,500,285
7,612,484

  

Foreign exchange gains/(losses)
  
(149,121)
54,193

  

Total comprehensive income for the year
  
13,351,164
7,666,677

Profit for the year attributable to:
  

Owners of the parent Company
  
13,500,285
7,612,484

  
13,500,285
7,612,484

Total comprehensive income for the year attributable to:
  

Owners of the parent Company
  
13,351,164
7,666,677

  
13,351,164
7,666,677

There were no recognised gains and losses for 2023 or 2022 other than those included in the consolidated statement of comprehensive income.

The notes on pages 29 to 53 form part of these financial statements.

Page 20

 
INVERTEK DRIVES LIMITED
REGISTERED NUMBER: 03504834

CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 31 DECEMBER 2023

2023
2022
Note
£
£

Fixed assets
  

Intangible assets
 12 
4,183,220
4,189,683

Tangible assets
 13 
16,209,748
12,313,272

Investments
 14 
160,877
281,348

  
20,553,845
16,784,303

Current assets
  

Stocks
 15 
32,079,740
23,373,593

Debtors: amounts falling due within one year
 16 
16,776,345
16,513,914

Cash at bank and in hand
 17 
15,859,418
7,099,886

  
64,715,503
46,987,393

Creditors: amounts falling due within one year
 18 
(32,262,287)
(24,528,588)

Net current assets
  
 
 
32,453,216
 
 
22,458,805

Total assets less current liabilities
  
53,007,061
39,243,108

Creditors: amounts falling due after more than one year
 19 
(9,160)
(15,848)

Provisions for liabilities
  

Deferred taxation
 21 
(2,160,599)
(1,741,122)

  
 
 
(2,160,599)
 
 
(1,741,122)

Net assets
  
50,837,302
37,486,138

Page 21

 
INVERTEK DRIVES LIMITED
REGISTERED NUMBER: 03504834
    
CONSOLIDATED STATEMENT OF FINANCIAL POSITION (CONTINUED)
AS AT 31 DECEMBER 2023

2023
2022
Note
£
£

Capital and reserves
  

Called up share capital 
 22 
60,601
60,601

Share premium account
 23 
470,017
470,017

Profit and loss account
 23 
50,306,684
36,955,520

  
50,837,302
37,486,138


The financial statements were approved and authorised for issue by the board and were signed on its behalf by: 



Adrian David Ellam
Director

Date: 29 February 2024

The notes on pages 29 to 53 form part of these financial statements.

Page 22

 
INVERTEK DRIVES LIMITED
REGISTERED NUMBER: 03504834

COMPANY STATEMENT OF FINANCIAL POSITION
AS AT 31 DECEMBER 2023

2023
2022
Note
£
£

Fixed assets
  

Intangible assets
 12 
2,448,094
2,244,238

Tangible assets
 13 
16,076,335
12,196,740

Investments
 14 
2,772,634
2,779,766

  
21,297,063
17,220,744

Current assets
  

Stocks
 15 
24,988,428
16,865,799

Debtors: amounts falling due within one year
 16 
18,868,764
17,262,147

Cash at bank and in hand
 17 
13,916,172
4,679,508

  
57,773,364
38,807,454

Creditors: amounts falling due within one year
 18 
(29,972,333)
(21,277,809)

Net current assets
  
 
 
27,801,031
 
 
17,529,645

Total assets less current liabilities
  
49,098,094
34,750,389

  

Provisions for liabilities
  

Deferred taxation
 21 
(2,120,468)
(1,719,455)

  
 
 
(2,120,468)
 
 
(1,719,455)

Net assets
  
46,977,626
33,030,934

Page 23

 
INVERTEK DRIVES LIMITED
REGISTERED NUMBER: 03504834
    
COMPANY STATEMENT OF FINANCIAL POSITION (CONTINUED)
AS AT 31 DECEMBER 2023

2023
2022
Note
£
£


Capital and reserves
  

Called up share capital 
 22 
60,601
60,601

Share premium account
 23 
539,309
539,309

Profit and loss account brought forward
  
32,431,024
27,104,893

Profit for the year
  
13,946,692
5,326,131

Profit and loss account carried forward
  
46,377,716
32,431,024

  
46,977,626
33,030,934


The financial statements were approved and authorised for issue by the board and were signed on its behalf by: 


Adrian David Ellam
Director

Date: 29 February 2024

The notes on pages 29 to 53 form part of these financial statements.

Page 24

 
INVERTEK DRIVES LIMITED
 

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2023


Called up share capital
Share premium account
Profit and loss account
Non-controlling interests
Total equity

£
£
£
£
£

At 1 January 2022
60,601
539,309
29,288,489
354
29,888,753


Comprehensive income for the year

Profit for the year

-
-
7,612,484
-
7,612,484

Foreign exchange movements
-
-
54,193
-
54,193

Transfer of historic share of associate profits/losses upon acquisition to subsidiary
-
-
354
(354)
-


Other comprehensive income for the year
-
-
54,547
(354)
54,193


Total comprehensive income for the year
-
-
7,667,031
(354)
7,666,677


Contributions by and distributions to owners

Transfer upon step acquisition
-
(69,292)
-
-
(69,292)


Total transactions with owners
-
(69,292)
-
-
(69,292)


At 1 January 2023
60,601
470,017
36,955,520
-
37,486,138


Comprehensive income for the year

Profit for the year

-
-
13,500,285
-
13,500,285

Foreign exchange movements
-
-
(149,121)
-
(149,121)


Other comprehensive income for the year
-
-
(149,121)
-
(149,121)


Total comprehensive income for the year
-
-
13,351,164
-
13,351,164


Total transactions with owners
-
-
-
-
-


At 31 December 2023
60,601
470,017
50,306,684
-
50,837,302


The notes on pages 29 to 53 form part of these financial statements.

Page 25

 
INVERTEK DRIVES LIMITED
 

COMPANY STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2023


Called up share capital
Share premium account
Profit and loss account
Total equity

£
£
£
£

At 1 January 2022
60,601
539,309
27,104,893
27,704,803


Comprehensive income for the year

Profit for the year
-
-
5,326,131
5,326,131


Total transactions with owners
-
-
-
-


At 1 January 2023
60,601
539,309
32,431,024
33,030,934


Comprehensive income for the year

Profit for the year
-
-
13,946,692
13,946,692


Total transactions with owners
-
-
-
-


At 31 December 2023
60,601
539,309
46,377,716
46,977,626


The notes on pages 29 to 53 form part of these financial statements.

Page 26

 
INVERTEK DRIVES LIMITED
 

CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 DECEMBER 2023

2023
2022
£
£

Cash flows from operating activities

Profit for the financial year
13,500,285
7,612,484

Adjustments for:

Amortisation of intangible assets
659,665
599,959

Depreciation of tangible assets
1,479,459
1,202,369

(Profit)/loss on disposal of tangible assets
(46,051)
14,105

Interest paid
708,757
258,623

Taxation charge
2,232,028
1,768,449

(Increase) in stocks
(8,706,147)
(5,188,868)

(Increase) in debtors
(160,292)
(3,135,622)

(Increase)/decrease in amounts owed by groups
(157,265)
63,206

Decrease/(increase) in amounts owed by associates
55,126
(70,762)

(Decrease)/increase in creditors
(99,636)
6,588,528

Increase/(decrease)) in amounts owed to groups
11,304,296
(2,982,897)

Share of operating (loss) in associates
-
(6,000)

Corporation tax (paid)
(1,793,871)
(1,075,954)

Foreign exchange differences
(125,091)
51,780

Fair value gains on acquisition of subsidiary
-
(280,880)

Loss on disposal of investment in associate
83,338
-

Net cash generated from operating activities

18,934,601
5,418,520


Cash flows from investing activities

Purchase of intangible fixed assets
(653,202)
(336,724)

Purchase of tangible fixed assets
(5,409,685)
(4,539,947)

Sale of tangible fixed assets
85,771
3,008

Sale of unlisted and other investments
-
71,753

Purchase of fixed asset investments
-
(2,615,170)

Sale of share in associates
7,133
-

Income from investments in related companies
-
6,000

Net cash from investing activities

(5,969,983)
(7,411,080)
Page 27

 
INVERTEK DRIVES LIMITED
 

CONSOLIDATED STATEMENT OF CASH FLOWS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023


2023
2022

£
£



Cash flows from financing activities

Issue of ordinary shares
-
(69,292)

Repayment of/new finance leases
(6,268)
(59,004)

Interest paid
(708,757)
(258,623)

Net cash used in financing activities
(715,025)
(386,919)

Net increase/(decrease) in cash and cash equivalents
12,249,593
(2,379,479)

Cash and cash equivalents at beginning of year
206,260
2,585,739

Cash and cash equivalents at the end of year
12,455,853
206,260


Cash and cash equivalents at the end of year comprise:

Cash at bank and in hand
15,859,418
7,099,886

Bank overdrafts
(3,403,565)
(6,893,626)

12,455,853
206,260


The notes on pages 29 to 53 form part of these financial statements.

Page 28

 
INVERTEK DRIVES LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

1.


General information

Invertek Drives Limited ('the Company) and its subsidiaries (together 'the Group') design, manufacture and market electronic variable speed drives for electronic motor control in the UK, Europe and Asia. 
The Company is a private company limited by shares and is incorporated in England and Wales. The address of its registered office is noted on the company information page.

2.Accounting policies

 
2.1

Basis of preparation of financial statements

The financial statements have been prepared under the historical cost convention unless otherwise specified within these accounting policies and in accordance with Financial Reporting Standard 102, the Financial Reporting Standard applicable in the UK and the Republic of Ireland and the Companies Act 2006.

The preparation of financial statements in compliance with FRS 102 requires the use of certain critical accounting estimates. It also requires Group management to exercise judgment in applying the Group's accounting policies (see note 3).

The Company has taken advantage of the exemption allowed under section 408 of the Companies Act 2006 and has not presented its own Statement of comprehensive income in these financial statements.

The following principal accounting policies have been applied:

 
2.2

Basis of consolidation

The consolidated financial statements present the results of the Company and its own subsidiaries ("the Group") as if they form a single entity. Intercompany transactions and balances between group companies are therefore eliminated in full.
The consolidated financial statements incorporate the results of business combinations using the purchase method. In the Balance sheet, the acquiree's identifiable assets, liabilities and contingent liabilities are initially recognised at their fair values at the acquisition date. The results of acquired operations are included in the Consolidated statement of comprehensive income from the date on which control is obtained. They are deconsolidated from the date control ceases.
An associate is an entity, being neither a subsidiary nor a joint venture, in which the group holds a long-term interest and where the group has significant influence. The group considers that it has significant influence where it has the power to participate in the financial and operating decisions of the associate. The financial results of the associates are accounted for using the equity method of accounting. 

 
2.3

Going concern

After making enquires, the Directors have a reasonable expectation that the Company and the  Group have adequate resources to continue in operational existence for the foreseeable future. The Company and Group therefore continues to adopt the going concern basis in preparing its financial statements. 

Page 29

 
INVERTEK DRIVES LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

2.Accounting policies (continued)

 
2.4

Foreign currency translation

Functional and presentation currency

The Company's functional and presentational currency is GBP.

Transactions and balances

Foreign currency transactions are translated into the functional currency using the spot exchange rates at the dates of the transactions.

At each period end foreign currency monetary items are translated using the closing rate. Non-monetary items measured at historical cost are translated using the exchange rate at the date of the transaction and non-monetary items measured at fair value are measured using the exchange rate when fair value was determined.

Foreign exchange gains and losses resulting from the settlement of transactions and from the translation at period-end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in profit or loss except when deferred in other comprehensive income as qualifying cash flow hedges.

Foreign exchange gains and losses that relate to borrowings and cash and cash equivalents are presented in the Consolidated statement of comprehensive income within 'finance income or costs'. All other foreign exchange gains and losses are presented in profit or loss within 'other operating income'.

On consolidation, the results of overseas operations are translated into Sterling at rates approximating to those ruling when the transactions took place. All assets and liabilities of overseas operations are translated at the rate ruling at the reporting date. Exchange differences arising on translating the opening net assets at opening rate and the results of overseas operations at actual rate are recognised in other comprehensive income.

Page 30

 
INVERTEK DRIVES LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

2.Accounting policies (continued)

 
2.5

Revenue

Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Group and the revenue can be reliably measured. Revenue is measured as the fair value of the consideration received or receivable, excluding discounts, rebates, value added tax and other sales taxes. The following criteria must also be met before revenue is recognised:

Sale of goods

Revenue from the sale of goods is recognised when all of the following conditions are satisfied:
the Group has transferred the significant risks and rewards of ownership to the buyer;
the Group 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 Group will receive the consideration due under the transaction; and
the costs incurred or to be incurred in respect of the transaction can be measured reliably.

Rendering of services

Revenue from a contract to provide services is recognised in the period in which the services are provided in accordance with the stage of completion of the contract when all of the following conditions are satisfied:
the amount of revenue can be measured reliably;
it is probable that the Group will receive the consideration due under the contract;
the stage of completion of the contract at the end of the reporting period can be measured reliably; and
the costs incurred and the costs to complete the contract can be measured reliably.

 
2.6

Operating leases: the Group as lessee

Rentals paid under operating leases are charged to profit or loss on a straight-line basis over the lease term.

Benefits received and receivable as an incentive to sign an operating lease are recognised on a straight-line basis over the lease term, unless another systematic basis is representative of the time pattern of the lessee's benefit from the use of the leased asset.

Page 31

 
INVERTEK DRIVES LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

2.Accounting policies (continued)

 
2.7

Research and development

In the research phase of an internal project it is not possible to demonstrate that the project will generate future economic benefits and hence all expenditure on research shall be recognised as an expense when it is incurred. Intangible assets are recognised from the development phase of a project if and only if certain specific criteria are met in order to demonstrate the asset will generate probable future economic benefits and that its cost can be reliably measured. The capitalised development costs are subsequently amortised on a straight line basis over their useful economic lives, of 10 years.
If it is not possible to distinguish between the research phase and the development phase of an internal project, the expenditure is treated as if it were all incurred in the research phase only.

 
2.8

Finance costs

Finance costs are charged to profit or loss over the term of the debt using the effective interest method so that the amount charged is at a constant rate on the carrying amount. Issue costs are initially recognised as a reduction in the proceeds of the associated capital instrument.

 
2.9

Borrowing costs

All borrowing costs are recognised in profit or loss in the year in which they are incurred.

 
2.10

Pensions

Defined contribution pension plan

The Group operates a defined contribution plan for its employees. A defined contribution plan is a pension plan under which the Group pays fixed contributions into a separate entity. Once the contributions have been paid the Group has no further payment obligations.

The contributions are recognised as an expense in profit or loss when they fall due. Amounts not paid are shown in accruals as a liability in the Statement of financial position. The assets of the plan are held separately from the Group in independently administered funds.

Page 32

 
INVERTEK DRIVES LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

2.Accounting policies (continued)

 
2.11

Current and deferred taxation

The tax expense for the year comprises current and deferred tax. Tax is recognised in profit or loss except that a charge attributable to an item of income and expense recognised as other comprehensive income or to an item recognised directly in equity is also recognised in other comprehensive income or directly in equity respectively.

The current income tax charge is calculated on the basis of tax rates and laws that have been enacted or substantively enacted by the reporting date in the countries where the Company and the Group operate and generate income.

Deferred tax balances are recognised in respect of all timing differences that have originated but not reversed by the reporting date, except that:
The recognition of deferred tax assets is limited to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits;
Any deferred tax balances are reversed if and when all conditions for retaining associated tax allowances have been met; and
Where they relate to timing differences in respect of interests in subsidiaries, associates, branches and joint ventures and the Group can control the reversal of the timing differences and such reversal is not considered probable in the foreseeable future.

Deferred tax balances are not recognised in respect of permanent differences except in respect of business combinations, when deferred tax is recognised on the differences between the fair values of assets acquired and the future tax deductions available for them and the differences between the fair values of liabilities acquired and the amount that will be assessed for tax. Deferred tax is determined using tax rates and laws that have been enacted or substantively enacted by the reporting date.

Page 33

 
INVERTEK DRIVES LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

2.Accounting policies (continued)

 
2.12

Intangible assets

Goodwill

Goodwill represents the difference between amounts paid on the cost of a business combination and the acquirer’s interest in the fair value of the Group's share of its identifiable assets and liabilities of the acquiree at the date of acquisition. Subsequent to initial recognition, goodwill is measured at cost less accumulated amortisation and accumulated impairment losses. Goodwill is amortised on a straight-line basis to the Consolidated statement of comprehensive income over its useful economic life.

Other intangible assets

Intangible assets are initially recognised at cost. After recognition, under the cost model, intangible assets are measured at cost less any accumulated amortisation and any accumulated impairment losses.

At each reporting date the company assesses whether there is any indication of impairment. If such indication exists, the recoverable amount of the asset is determined which is the higher of its fair value less costs to sell and its value in use. An impairment loss is recognised where the carrying amount exceeds the recoverable amount.

All intangible assets are considered to have a finite useful life. If a reliable estimate of the useful life cannot be made, the useful life shall not exceed ten years.

Page 34

 
INVERTEK DRIVES LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

2.Accounting policies (continued)

 
2.13

Tangible fixed assets

Tangible fixed assets under the cost model are stated at historical cost less accumulated depreciation and any accumulated impairment losses. Historical cost includes expenditure that is directly attributable to bringing the asset to the location and condition necessary for it to be capable of operating in the manner intended by management.

Land is not depreciated. Depreciation on other assets is charged so as to allocate the cost of assets less their residual value over their estimated useful lives, using the straight-line method.

Depreciation is provided on the following basis:

Freehold property
-
2%
Plant and machinery
-
15-33%
Other fixed assets
-
15%

The assets' residual values, useful lives and depreciation methods are reviewed, and adjusted prospectively if appropriate, or if there is an indication of a significant change since the last reporting date.

Gains and losses on disposals are determined by comparing the proceeds with the carrying amount and are recognised in profit or loss.

 
2.14

Valuation of investments

Investments in subsidiaries are measured at cost less accumulated impairment.

 
2.15

Associates and joint ventures

An entity is treated as a joint venture where the Group is a party to a contractual agreement with one or more parties from outside the Group to undertake an economic activity that is subject to joint control.

An entity is treated as an associated undertaking where the Group exercises significant influence in that it has the power to participate in the operating and financial policy decisions.
In the consolidated accounts, interests in associated undertakings are accounted for using the equity method of accounting. Under this method an equity investment is initially recognised at the transaction price (including transaction costs) and is subsequently adjusted to reflect the investors share of the profit or loss, other comprehensive income and equity of the associate. The Consolidated statement of comprehensive income includes the Group's share of the operating results, interest, pre-tax results and attributable taxation of such undertakings applying accounting policies consistent with those of the Group. In the Consolidated statement of financial position, the interests in associated undertakings are shown as the Group's share of the identifiable net assets, including any unamortised premium paid on acquisition.
Any premium on acquisition is dealt with in accordance with the goodwill policy.

Page 35

 
INVERTEK DRIVES LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

2.Accounting policies (continued)

 
2.16

Stocks

Stocks are stated at the lower of cost and net realisable value, being the estimated selling price less costs to complete and sell. Cost is based on the cost of purchase on a first in, first out basis. Work in progress and finished goods include labour and attributable overheads.

At each reporting date, stocks are assessed for impairment. If stock is impaired, the carrying amount is reduced to its selling price less costs to complete and sell. The impairment loss is recognised immediately in profit or loss.

 
2.17

Debtors

Short-term debtors are measured at transaction price, less any impairment. Loans receivable 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.

 
2.18

Cash and cash equivalents

Cash is represented by cash in hand and deposits with financial institutions repayable without penalty on notice of not more than 24 hours. Cash equivalents are highly liquid investments that mature in no more than three months from the date of acquisition and that are readily convertible to known amounts of cash with insignificant risk of change in value.

In the Consolidated statement of cash flows, cash and cash equivalents are shown net of bank overdrafts that are repayable on demand and form an integral part of the Group's cash management.

 
2.19

Creditors

Short-term creditors are measured at the transaction price. 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.

 
2.20

Provisions for liabilities

Provisions are made where an event has taken place that gives the Group a legal or constructive obligation that probably requires settlement by a transfer of economic benefit, and a reliable estimate can be made of the amount of the obligation.
Provisions are charged as an expense to profit or loss in the year that the Group becomes aware of the obligation, and are measured at the best estimate at the reporting date of the expenditure required to settle the obligation, taking into account relevant risks and uncertainties.
When payments are eventually made, they are charged to the provision carried in the Statement of financial position.

Page 36

 
INVERTEK DRIVES LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

2.Accounting policies (continued)

 
2.21

Financial instruments

The Group only enters into basic financial instrument transactions that result in the recognition of financial assets and liabilities like trade and other debtors and creditors, loans from banks and other third parties, loans to related parties and investments in ordinary shares.

Debt instruments (other than those wholly repayable or receivable within one year), including loans and other accounts receivable and payable, are initially measured at present value of the future cash flows and subsequently at amortised cost using the effective interest method. Debt instruments that are payable or receivable within one year, typically trade debtors and creditors, are measured, initially and subsequently, at the undiscounted amount of the cash or other consideration expected to be paid or received. However, if the arrangements of a short-term instrument constitute a financing transaction, like the payment of a trade debt deferred beyond normal business terms or in case of an out-right short-term loan that is not at market rate, the financial asset or liability is measured, initially at the present value of future cash flows discounted at a market rate of interest for a similar debt instrument and subsequently at amortised cost, unless it qualifies as a loan from a director in the case of a small company, or a public benefit entity concessionary loan.

Financial assets that are measured at cost and amortised cost are assessed at the end of each reporting period for objective evidence of impairment. If objective evidence of impairment is found, an impairment loss is recognised in the Consolidated statement of comprehensive income.

For financial assets measured at amortised cost, the impairment loss is measured as the difference between an asset's carrying amount and the present value of estimated cash flows discounted at the asset's original effective interest rate. If a financial asset has a variable interest rate, the discount rate for measuring any impairment loss is the current effective interest rate determined under the contract.

For financial assets measured at cost less impairment, the impairment loss is measured as the difference between an asset's carrying amount and best estimate of the recoverable amount, which is an approximation of the amount that the Group would receive for the asset if it were to be sold at the reporting date.

Financial assets and liabilities are offset and the net amount reported in the Statement of financial position when there is an 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.

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 income as appropriate. The company does not currently apply hedge accounting for interest rate and foreign exchange derivatives.

Page 37

 
INVERTEK DRIVES LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

3.


Judgments in applying accounting policies and key sources of estimation uncertainty

Estimates and judgments are continually evaluated and are based on historical evidence and other factors, including expectations of future events that are believed to be reasonable under the circumstances.
The Group makes estimates and assumptions concerning the future. The resulting accounting estimates will, by definition, seldom equal the related actual results. In the opinion of the Directors there are no estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amount of assets and liabilities within the next financial year.


4.


Turnover

The whole of the turnover is attributable to the sale of variable speed drives for electronic motor control.

Analysis of turnover by country of destination:

2023
2022
£
£

United Kingdom
8,910,846
6,971,581

Rest of Europe
35,124,637
29,249,706

Rest of the world
52,925,199
40,051,995

96,960,682
76,273,282



5.


Other operating income

2023
2022
£
£

Fair value gains/(losses)
-
280,880

-
280,880


Page 38

 
INVERTEK DRIVES LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

6.


Operating profit

The operating profit is stated after charging:

2023
2022
£
£

Research & development charged as an expense
579,983
386,715

Exchange differences
73,037
93,658

Other operating lease rentals
339,864
466,198

(Profit)/loss on sale of tangible assets
(46,051)
17,113

(Profit)/loss on disposal of investments in associates
83,338
-


7.


Auditors' remuneration

2023
2022
£
£

Fees payable to the Company's auditors and their associates for the audit of the consolidated and parent Company's financial statements
26,650
24,750

Fees payable to the Company's auditors and their associates in respect of:

All non-audit services not included above
5,200
4,750


8.


Employees

Staff costs, including Directors' remuneration, were as follows:


Group
Group
Company
Company
2023
2022
2023
2022
£
£
£
£


Wages and salaries
20,749,457
16,087,354
17,127,323
13,386,872

Social security costs
1,614,141
1,293,132
1,614,141
1,293,132

Cost of defined contribution scheme
277,036
216,506
277,036
216,506

22,640,634
17,596,992
19,018,500
14,896,510


The average monthly number of employees, including the Directors, during the year was as follows:



Group
Group
Company
Company
        2023
        2022
        2023
        2022
            No.
            No.
            No.
            No.









432
377
370
324

Page 39

 
INVERTEK DRIVES LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

9.


Directors' remuneration

2023
2022
£
£

Directors' emoluments
2,993,452
1,987,542

Group contributions to defined contribution pension schemes
6,274
5,280

2,999,726
1,992,822


During the year retirement benefits were accruing to 4 Directors (2022 - 4) in respect of defined contribution pension schemes.

The highest paid Director received remuneration of £665,888 (2022 - £425,919).

The value of the Group's contributions paid to a defined contribution pension scheme in respect of the highest paid Director amounted to £1,321 (2022 - £1,320).

The Directors constitute the key management personnel of the Group.


10.


Interest payable and similar expenses

2023
2022
£
£


Bank interest payable
235,011
179,992

Other loan interest payable
473,746
78,601

Finance leases and hire purchase contracts
-
30

708,757
258,623

Page 40

 
INVERTEK DRIVES LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

11.


Taxation


2023
2022
£
£

Corporation tax


Current tax on profits for the year
2,087,252
1,488,166

Adjustments in respect of previous periods
(274,701)
(164,411)


1,812,551
1,323,755


Total current tax
1,812,551
1,323,755

Deferred tax


Origination and reversal of timing differences
419,477
386,547

Changes to tax rates
-
58,147

Total deferred tax
419,477
444,694


Taxation on profit on ordinary activities
2,232,028
1,768,449
Page 41

 
INVERTEK DRIVES LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
 
11.Taxation (continued)


Factors affecting tax charge for the year

The tax assessed for the year is lower than (2022 - lower than) the standard rate of corporation tax in the UK of 23.5% (2022 - 19%). The differences are explained below:

2023
2022
£
£


Profit on ordinary activities before tax
15,732,313
9,380,933


Profit on ordinary activities multiplied by standard rate of corporation tax in the UK of 23.5% (2022 - 19%)
3,697,094
1,782,377

Effects of:


Expenses not deductible for tax purposes, other than goodwill amortisation and impairment
25,740
20,636

Timing differences net of movement in tax rates
121,090
251,944

Adjustments to tax charge in respect of prior periods
(274,701)
(164,411)

Additional deduction for R&D expenditure
(405,212)
(232,133)

Patent box additional deduction
(1,713,982)
(176,367)

Book profit on chargeable assets
8,484
2,670

Variances in tax rates applying to foreign subsidiaries
192,340
86,564

Adjustment to tax charge in relation to the change in tax rate
-
58,147

Non-taxable profit impacting eliminations
581,175
139,022

Total tax charge for the year
2,232,028
1,768,449


Factors that may affect future tax charges

There were no factors that may affect future tax charges.

Page 42

 
INVERTEK DRIVES LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

12.


Intangible assets

Group





Development costs
Goodwill
Total

£
£
£



Cost


At 1 January 2023
6,385,745
2,103,186
8,488,931


Additions
653,202
-
653,202



At 31 December 2023

7,038,947
2,103,186
9,142,133



Amortisation


At 1 January 2023
4,141,507
157,741
4,299,248


Charge for the year on owned assets
449,346
210,319
659,665



At 31 December 2023

4,590,853
368,060
4,958,913



Net book value



At 31 December 2023
2,448,094
1,735,126
4,183,220



At 31 December 2022
2,244,238
1,945,445
4,189,683



Page 43

 
INVERTEK DRIVES LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
 
           12.Intangible assets (continued)

Company




Development costs

£



Cost


At 1 January 2023
6,364,240


Additions
653,202



At 31 December 2023

7,017,442



Amortisation


At 1 January 2023
4,120,002


Charge for the year
449,346



At 31 December 2023

4,569,348



Net book value



At 31 December 2023
2,448,094



At 31 December 2022
2,244,238

Page 44

 
INVERTEK DRIVES LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

13.


Tangible fixed assets

Group






Freehold property
Plant and machinery
Other fixed assets
Total

£
£
£
£



Cost or valuation


At 1 January 2023
8,485,581
8,610,652
2,751
17,098,984


Additions
3,373,102
2,036,583
-
5,409,685


Disposals
-
(272,487)
-
(272,487)


Exchange adjustments
-
3,000
-
3,000



At 31 December 2023

11,858,683
10,377,748
2,751
22,239,182



Depreciation


At 1 January 2023
198,208
4,587,821
(317)
4,785,712


Charge for the year on owned assets
146,010
1,333,132
317
1,479,459


Disposals
-
(232,767)
-
(232,767)


Exchange adjustments
-
(2,970)
-
(2,970)



At 31 December 2023

344,218
5,685,216
-
6,029,434



Net book value



At 31 December 2023
11,514,465
4,692,532
2,751
16,209,748



At 31 December 2022
8,287,373
4,022,831
3,068
12,313,272

The net book value of assets held under finance leases or hire purchase contracts, included above, are as follows:


2023
2022
£
£



Plant and machinery
-
11,743

-
11,743

Page 45

 
INVERTEK DRIVES LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

Company






Freehold property
Plant and machinery
Other fixed assets
Total

£
£
£
£

Cost or valuation


At 1 January 2023
8,485,581
8,231,316
2,751
16,719,648


Additions
3,373,102
1,983,285
-
5,356,387


Disposals
-
(272,487)
-
(272,487)



At 31 December 2023

11,858,683
9,942,114
2,751
21,803,548



Depreciation


At 1 January 2023
198,208
4,325,017
(317)
4,522,908


Charge for the year on owned assets
146,010
1,290,745
317
1,437,072


Disposals
-
(232,767)
-
(232,767)



At 31 December 2023

344,218
5,382,995
-
5,727,213



Net book value



At 31 December 2023
11,514,465
4,559,119
2,751
16,076,335



At 31 December 2022
8,287,373
3,906,299
3,068
12,196,740

Included within freehold property is land with a cost of £1,704,947 (2022: £1,704,947) which is not depreciated. 






Page 46

 
INVERTEK DRIVES LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

14.


Fixed asset investments

Group





Investments in associates

£



Cost or valuation


At 1 January 2023
281,348


Disposals
(90,471)


Foreign exchange movement
(30,000)



At 31 December 2023
160,877




Company





Investments in subsidiary companies
Investments in associates
Total

£
£
£



Cost or valuation


At 1 January 2023
2,753,349
26,417
2,779,766


Disposals
-
(7,132)
(7,132)



At 31 December 2023
2,753,349
19,285
2,772,634





Subsidiary undertakings


The following were subsidiary undertakings of the Company:

Name

Class of shares

Holding

Invertek Drives (Shenyang) Limited
Ordinary
100%
Invertek Drives GmbH
Ordinary
100%
Invertek Drives Polska Sp.z.o.o
Ordinary
100%
Invertek Drives USA LLC
Ordinary
100%
Invertek Drives Iberica
Ordinary
100%

Page 47

 
INVERTEK DRIVES LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

15.


Stocks

Group
Group
Company
Company
2023
2022
2023
2022
£
£
£
£

Raw materials and consumables
18,925,926
15,234,894
22,736,258
16,865,799

Finished goods and goods for resale
13,153,814
8,138,699
2,252,170
-

32,079,740
23,373,593
24,988,428
16,865,799


The difference between purchase price or production cost of stocks and their replacement cost is not material.


16.


Debtors

Group
Group
Company
Company
2023
2022
2023
2022
£
£
£
£


Trade debtors
14,657,943
13,614,844
10,267,463
9,269,994

Amounts owed by group undertakings
480,449
323,184
7,394,063
5,858,974

Amounts owed by joint ventures and associated undertakings
141,169
196,295
141,169
196,295

Other debtors
1,002,477
2,013,048
571,762
1,570,340

Prepayments and accrued income
494,307
366,543
494,307
366,544

16,776,345
16,513,914
18,868,764
17,262,147


Amounts owed by group undertakings are unsecured, interest free, have no fixed date of repayment and are repayable on demand.

Page 48

 
INVERTEK DRIVES LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

17.


Cash and cash equivalents

Group
Group
Company
Company
2023
2022
2023
2022
£
£
£
£

Cash at bank and in hand
15,859,418
7,099,886
13,916,172
4,679,508

Less: bank overdrafts
(3,403,565)
(6,893,626)
(3,403,565)
(6,893,626)

12,455,853
206,260
10,512,607
(2,214,118)



18.


Creditors: Amounts falling due within one year

Group
Group
Company
Company
2023
2022
2023
2022
£
£
£
£

Bank overdrafts
3,403,565
6,893,626
3,403,565
6,893,626

Trade creditors
10,997,230
12,453,882
8,861,525
7,967,448

Amounts owed to group undertakings
13,340,167
2,035,871
14,042,389
4,104,136

Corporation tax
519,150
500,470
462,738
331,866

Other taxation and social security
566,198
303,651
389,299
303,651

Obligations under finance lease and hire purchase contracts
4,896
4,476
-
-

Other creditors
662,553
800,051
44,289
140,521

Accruals and deferred income
2,768,528
1,536,561
2,768,528
1,536,561

32,262,287
24,528,588
29,972,333
21,277,809


Net obligations under finance leases and hire purchase contracts, and proceeds of factored debts are secured on the assets to which they relate.
Overdrafts are secured by a fixed equitable charge on all debts that have been purchased, as well as on the freehold property.
Amounts owed to group undertakings are unsecured, interest free, have no fixed date of repayment and are repayable on demand.

Page 49

 
INVERTEK DRIVES LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

19.


Creditors: Amounts falling due after more than one year

Group
Group
2023
2022
£
£

Net obligations under finance leases and hire purchase contracts
9,160
15,848

9,160
15,848




20.


Hire purchase and finance leases


Minimum lease payments under hire purchase fall due as follows:

Group
Group
2023
2022
£
£

Within one year
4,896
4,476

Between 1-5 years
9,160
15,848

14,056
20,324


21.


Deferred taxation


Group



2023


£






At beginning of year
(1,741,122)


Charged to profit or loss
(419,477)



At end of year
(2,160,599)

Page 50

 
INVERTEK DRIVES LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
 
21.Deferred taxation (continued)

Company


2023


£






At beginning of year
(1,719,455)


Charged to profit or loss
(401,013)



At end of year
(2,120,468)

The provision for deferred taxation is made up as follows:

Group
Group
Company
Company
2023
2022
2023
2022
£
£
£
£

Accelerated capital allowances
(2,172,443)
(1,752,966)
(2,132,312)
(1,731,299)

Short term timing differences
11,844
11,844
11,844
11,844

(2,160,599)
(1,741,122)
(2,120,468)
(1,719,455)


22.


Share capital

2023
2022
£
£
Allotted, called up and fully paid



60,601 (2022 - 60,601) Ordinary shares of £1 each
60,601
60,601



23.


Reserves

Share premium account

The share premium reserve reflects the amount received by the Company for shares issued in excess of their nominal value.

Profit and loss account

The profit and loss account represents accumulated undistributed retained profits since incorporation.

Page 51

 
INVERTEK DRIVES LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
24.


Analysis of net debt




At 1 January 2023
Cash flows
At 31 December 2023
£

£

£

Cash at bank and in hand

7,099,886

8,759,532

15,859,418

Bank overdrafts

(6,893,626)

3,490,061

(3,403,565)

Finance leases

(20,324)

6,268

(14,056)


185,936
12,255,861
12,441,797


25.


Pension commitments

The Company operates a defined contributions pension scheme. The assets of the scheme are held separately from those of the Company in an independently administered fund. The pension cost charge represents contributions payable by the Company to the fund and amounted to £283,310 (2022: £216,506). At the year end contributions totaling £5,325 (2022: £58,853) were payable and are included in other creditors.


26.


Commitments under operating leases

At 31 December 2023 the Group and the Company had future minimum lease payments due under non-cancellable operating leases for each of the following periods:


Group
Group
Company
Company
2023
2022
2023
2022
£
£
£
£

Not later than 1 year
564,636
466,721
294,663
196,746

Later than 1 year and not later than 5 years
1,236,554
1,004,246
397,009
164,701

Later than 5 years
264,826
249,576
15,250
-

2,066,016
1,720,543
706,922
361,447
Page 52

 
INVERTEK DRIVES LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

27.


Related party transactions

Group companies
The parent company has taken advantage of the exemptions to not disclose transactions involving wholly owned group companies. 
During the period the Group made sales of £146,685 (2022: £890,220) to associates of Invertek Drives Limited. At the period end £72,372 (2022: £196,294)
 was owed from the associates and is included in debtors.
During the period sales of £48,864 (2022: £41,952) were made to entities in which the Group holds a non-controlling interest. At the period end £34,644 (2022: £28,654) was owed and included in debtors.


28.


Controlling party

Invertek Drives Limited is under the control of Sumitomo Heavy Industries Limited, who own 100% of the share capital in the Company. 

 
Page 53