Company registration number 01261214 (England and Wales)
HYDAC TECHNOLOGY LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
HYDAC TECHNOLOGY LIMITED
COMPANY INFORMATION
Directors
R. Huber
K. Brownlee
D. Wait
A . Dieter
Company number
01261214
Registered office
55 Station Road
Beaconsfield
Buckinghamshire
HP9 1QL
Auditor
Rouse Audit LLP
55 Station Road
Beaconsfield
Buckinghamshire
HP9 1QL
Bankers
Lloyds Bank (High Wycombe)
27-31 White Hart Street
High Wycombe
Bucks
HP11 2HL
HYDAC TECHNOLOGY LIMITED
CONTENTS
Page
Strategic report
1 - 2
Directors' report
3 - 4
Independent auditor's report
5 - 8
Statement of comprehensive income
9
Statement of financial position
10
Statement of changes in equity
11
Notes to the financial statements
12 - 24
HYDAC TECHNOLOGY LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
- 1 -
The directors present the strategic report for the year ended 31 December 2023.
Review of the business
The business continues to operate predominantly in the U.K. and Republic of Ireland, however it is also the design authority for a number of global products and as such a proportion of its business is exported accordingly. Traditionally the markets served Industrial OEM & MRO and Off-highway OEM & MRO and a proportion of our business also goes through ‘resellers’ predominantly within our distribution network. Within the off-highway market there is a growing shift for ‘e-mobility’ in a variety of forms and the company has continued to develop its product portfolio to meet the new potentials that this offers. This in turn not only opens the possibility of new product sales to existing accounts but also new customers who historically were not on our radar or are new to the market.
Traditional markets saw a downturn in the order book during the last quarter of 2023 although as can be seen turnover for the year again exceeded the previous. This may have an effect as we go through 2024 but we are confident that along with new product and continued market share growth it will have a minimal effect to 2024 sales.
The supply chain issues that were particularly challenging early in the year started to improve as we entered the third quarter of 2023 but there are still some pockets of risk which are closely monitored by our procurement teams to mitigate any possible problems.
Principal risks and uncertainties
The business has risk management processes that seek to identify, assess and manage financial risk. The following risks have been identified:
Financial instruments
Liquidity risk
The company monitors and reviews liquidity risks regularly on an ongoing basis and also as part of the planning process. The board considers short-term requirements against available sources of funding, taking into account cash flow and responds to any identified needs as necessary to support the business.
Currency, market and price risk
Exchange rate of the Pound to the Euro still impacted on purchases, however the business continues to achieve the margins expected through active management of their pricing strategy.
Credit risk
The company's credit risk relates to the recovery of amounts owed by the customers for invoiced sales. The credit risk is managed by regular monitoring of outstanding amounts and through credit checks.
Covid risk
Whilst the virus is still a threat the company feels the level of risk is now minimal with the vaccination program and general immunity within the population having lessened the effects on day-to-day business.
HYDAC TECHNOLOGY LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 2 -
Key performance indicators
Financial indicators
31 December 2023
31 December 2022
Turnover (£)
32,872,661
30,835,169
Gross Profit (%)
29%
28%
Operating Profit (%)
6%
8%
On behalf of the board
D. Wait
Director
6 August 2024
HYDAC TECHNOLOGY LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
- 3 -
The directors present their annual report and financial statements for the year ended 31 December 2023.
Principal activities
The principal activity of the company is to manufacture hydraulic components and systems primarily aimed at the OEM industry; Off Highway and Construction, Agricultural, Municipal, Oil & Gas and Industrial as well as the After Sales and MRO Markets attached to these sectors. Components comprise a wide spectrum including hydraulic accumulators, fluid filters, coolers, electro-hydraulic controls, industrial valves, sensor systems, measuring equipment, cylinders and pumps. The company principally manufactures in Germany, and also has manufacturing in global areas including the UK, USA, China, Switzerland, Sweden and Italy. The marketing of the product is global, mainly via wholly owned distribution centres.
Results and dividends
The results for the year are set out on page 9.
The directors have ratified and paid an interim dividend in the year of £25,916,534 (2022 : £1,320,573).
Directors
The directors who held office during the year and up to the date of signature of the financial statements were as follows:
W. Dieter
(Resigned 8 June 2024)
R. Huber
K. Brownlee
D. Wait
A . Dieter
Future developments
The future development of the company is discussed within the Strategic Report on page 1 in accordance with s414C (11).
Statement of directors' responsibilities
The directors are responsible for preparing the financial statements in accordance with applicable law and United Kingdom Generally Accepted Accounting Practice.
Company law requires the directors to prepare financial statements for each financial year which give a true and fair view of the state of affairs of the company and of the profit or loss of the company for that year. In preparing those financial statements, the directors are required to:
- select suitable accounting policies and then apply them consistently;
- make judgements and estimates that are reasonable and prudent;
- prepare the financial statements on the going concern basis unless it is inappropriate to presume that the company will continue in business.
The directors are responsible for keeping proper accounting records which disclose with reasonable accuracy at any time the financial position of the company and to enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
Statement of disclosure to auditor
So far as each person who was a director at the date of approving this report is aware, there is no relevant audit information of which the company’s auditor is unaware. Additionally, the directors individually have taken all the necessary steps that they ought to have taken as directors in order to make themselves aware of all relevant audit information and to establish that the company’s auditor is aware of that information.
HYDAC TECHNOLOGY LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 4 -
Going concern
Costs of materials and energy have stabilised in the last 12 months leading to more certainty in the supply chain and as always, the directors continue to closely monitor the situation and take the necessary action to ensure profitability is always maintained. New technologies play an increasing role within some of our traditional markets and the company continue to develop our product portfolio to meet these new potentials that will inevitably influence our traditional business.
Taking these factors into consideration, the directors believe the business will have sufficient resources available in order to meet its obligations as they fall due for a period of at least 12 months from the date of approval of these financial statements. Consequently, the directors are satisfied that the company has adequate resources to continue in operational existence for the foreseeable future and for this reason they continue to adopt the going concern basis for preparing the financial statements.
On behalf of the board
D. Wait
Director
6 August 2024
HYDAC TECHNOLOGY LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF HYDAC TECHNOLOGY LIMITED
- 5 -
Opinion
We have audited the financial statements of Hydac Technology Limited (the 'company') for the year ended 31 December 2023 which comprise the statement of comprehensive income, the statement of financial position, the statement of changes in equity and notes to the financial statements, including significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice).
In our opinion the financial statements:
give a true and fair view of the state of the company's affairs as at 31 December 2023 and of its 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.
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditor's responsibilities for the audit of the financial statements section of our report. We are independent of the company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC’s Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Conclusions relating to going concern
In auditing the financial statements, we have concluded that the directors' use of the going concern basis of accounting in the preparation of the financial statements is appropriate.
Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the company's ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.
Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.
The other information comprises the information included in the annual report other than the financial statements and our auditor's report thereon. The directors are responsible for the other information contained within the annual report. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the course of the audit, or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.
We have nothing to report in this regard.
Opinions on other matters prescribed by the Companies Act 2006
In our opinion, based on the work undertaken in the course of our audit:
the information given in the strategic report and the directors' report for the financial year for which the financial statements are prepared is consistent with the financial statements; and
the strategic report and the directors' report have been prepared in accordance with applicable legal requirements.
HYDAC TECHNOLOGY LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF HYDAC TECHNOLOGY LIMITED
- 6 -
Matters on which we are required to report by exception
In the light of the knowledge and understanding of the company and its environment obtained in the course of the audit, we have not identified material misstatements in the strategic report or the directors' report.
We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to report to you if, in our opinion:
adequate accounting records have not been kept, or returns adequate for our audit have not been received from branches not visited by us; or
the financial statements are not in agreement with the accounting records and returns; or
certain disclosures of remuneration specified by law are not made; or
we have not received all the information and explanations we require for our audit.
Responsibilities of directors
As explained more fully in the directors' responsibilities statement, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. In preparing the financial statements, the directors are responsible for assessing the company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the company or to cease operations, or have no realistic alternative but to do so.
Auditor's responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.
The extent to which our procedures are capable of detecting irregularities, including fraud, is detailed below.
HYDAC TECHNOLOGY LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF HYDAC TECHNOLOGY LIMITED
- 7 -
Our approach to identifying and assessing the risks of material misstatement in respect of irregularities, including fraud and non-compliance with laws and regulations, was as follows:
The engagement team collectively had the appropriate competence, capabilities and skills to identify or recognise non-compliance with applicable laws and regulations;
Through discussions with the directors and other management and from our commercial knowledge and experience of the manufacturing sector, we identified the laws and regulations applicable to the company; and
Focusing on the specific laws and regulations which we considered may have a direct material effect on the financial statements or the operations of the company, we assessed the extent of compliance with those laws and regulations identified above through making enquiries of management and inspecting relevant correspondence.
We assessed the susceptibility of the company’s financial statements to material misstatement, including obtaining an understanding of how fraud might occur, by:
making enquiries of management as to where they considered there was susceptibility to fraud, their knowledge of actual, suspected and alleged fraud; and
considering the internal controls in place to mitigate risks of fraud and non-compliance with laws and regulations;
To address the risk of fraud through management bias and override of controls, we:
performed analytical procedures to identify any unusual or unexpected relationships;
tested journal entries to identify unusual transactions;
assessed whether judgements and assumptions made in determining the accounting estimates detailed in the accounting policies were indicative of potential bias; and
investigated the rationale behind significant or unusual bank transactions;
In response to the risk of irregularities and non-compliance with laws and regulations, we designed procedures which included, but were not limited to:
There are inherent limitations in our audit procedures described above. The more removed that laws and regulations are from financial transactions, the less likely it is that we would become aware of non-compliance. Auditing standards also limit the audit procedures required to identify non-compliance with laws and regulations to enquiry of the directors and other management and the inspection of regulatory and legal correspondence, if any.
Material misstatements that arise due to fraud can be harder to detect than those that arise from error as they may involve deliberate concealment or collusion.
A further description of our responsibilities is available on the Financial Reporting Council’s website at: https://www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor's report.
HYDAC TECHNOLOGY LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF HYDAC TECHNOLOGY LIMITED
- 8 -
This report is made solely to the company's members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the company's members those matters we are required to state to them in an auditor's report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company's members as a body, for our audit work, for this report, or for the opinions we have formed.
Leighton Bower
Senior Statutory Auditor
For and on behalf of Rouse Audit LLP
6 August 2024
Chartered Accountants
Statutory Auditor
55 Station Road
Beaconsfield
Buckinghamshire
HP9 1QL
HYDAC TECHNOLOGY LIMITED
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2023
- 9 -
2023
2022
Notes
£
£
Revenue
3
32,872,661
30,835,169
Cost of sales
(23,445,221)
(22,183,629)
Gross profit
9,427,440
8,651,540
Distribution costs
(4,344,800)
(3,967,673)
Administrative expenses
(3,147,882)
(2,299,583)
Operating profit
4
1,934,758
2,384,284
Investment income
7
25,960,706
1,321,474
Profit before taxation
27,895,464
3,705,758
Tax on profit
8
(505,494)
(470,489)
Profit for the financial year
27,389,970
3,235,269
The income statement has been prepared on the basis that all operations are continuing operations.
HYDAC TECHNOLOGY LIMITED
STATEMENT OF FINANCIAL POSITION
AS AT 31 DECEMBER 2023
31 December 2023
- 10 -
2023
2022
Notes
£
£
£
£
Non-current assets
Property, plant and equipment
10
7,761,028
7,741,493
Investments
11
2,835,582
2,835,582
10,596,610
10,577,075
Current assets
Inventories
13
5,414,045
4,626,984
Trade and other receivables
14
5,730,471
7,418,751
Cash and cash equivalents
7,606,554
5,966,814
18,751,070
18,012,549
Current liabilities
15
(4,361,842)
(5,125,765)
Net current assets
14,389,228
12,886,784
Total assets less current liabilities
24,985,838
23,463,859
Provisions for liabilities
Provisions
16
59,000
59,000
Deferred tax liability
17
407,030
358,487
(466,030)
(417,487)
Net assets
24,519,808
23,046,372
Equity
Called up share capital
20
1,000,000
1,000,000
Retained earnings
23,519,808
22,046,372
Total equity
24,519,808
23,046,372
The financial statements were approved by the board of directors and authorised for issue on 6 August 2024 and are signed on its behalf by:
D. Wait
Director
Company registration number 01261214 (England and Wales)
HYDAC TECHNOLOGY LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2023
- 11 -
Share capital
Retained earnings
Total
Notes
£
£
£
Balance at 1 January 2022
1,000,000
20,131,676
21,131,676
Year ended 31 December 2022:
Profit and total comprehensive income
-
3,235,269
3,235,269
Dividends
9
-
(1,320,573)
(1,320,573)
Balance at 31 December 2022
1,000,000
22,046,372
23,046,372
Year ended 31 December 2023:
Profit and total comprehensive income
-
27,389,970
27,389,970
Dividends
9
-
(25,916,534)
(25,916,534)
Balance at 31 December 2023
1,000,000
23,519,808
24,519,808
HYDAC TECHNOLOGY LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
- 12 -
1
Accounting policies
Company Information
Hydac Technology Limited is a limited company domiciled and incorporated in England and Wales. The registered office is 55 Station Road, Beaconsfield, Buckinghamshire, HP9 1QL. Its principal place of business is De Havilland Way, Windrush Park, Witney, Oxfordshire, OX29 0YG.
1.1
Accounting convention
These financial statements have been prepared in accordance with FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” (“FRS 102”) and the requirements of the Companies Act 2006.
The financial statements have been prepared under the historical cost convention, modified to include the revaluation for some of the freehold properties and to include certain financial instruments at fair value. The principal accounting policies adopted are set out below.
In these financial statements, the company is considered to be a qualifying entity (for the purposes of this FRS) and has applied the exemptions available under FRS 102 in respect of the following disclosures:
Section 4 ‘Statement of Financial Position’ – Reconciliation of the opening and closing number of shares
Section 7 ‘Statement of Cash Flows’ – Presentation of a statement of cash low and related notes and disclosures;
Section 33 ‘Related Party Disclosures’ – Compensation for key management personnel
1.2
Going concern
Costs of materials and energy have stabilised in the last 12 months leading to more certainty in the supply chain and as always, the directors continue to closely monitor the situation and take the necessary action to ensure profitability is always maintained. New technologies play an increasing role within some of our traditional markets and the company continue to develop our product portfolio to meet these new potentials that will inevitably influence our traditional business.true
Taking these factors into consideration, the directors believe the business will have sufficient resources available in order to meet its obligations as they fall due for a period of at least 12 months from the date of approval of these financial statements. Consequently, the directors are satisfied that the company has adequate resources to continue in operational existence for the foreseeable future and for this reason they continue to adopt the going concern basis for preparing the financial statements.
1.3
Revenue
Turnover represents amounts receivable for goods and services net of VAT and trade discounts. Revenue is recognised on despatch of goods.
1.4
Long term contracts
Turnover is recognised on the basis of the level of completion of the contract. Revenue is recognised using the “percentage complete” method, as work is completed against the project. The percentage complete is determined through the costs incurred to date over the total expected costs. Costs therefore drive the percentage complete. Revenue follows costs under this method and any differences from the amounts invoiced are recognised as either deferred or accrued income as appropriate.
Projects are reviewed on a annual basis and profit is recognised based on percentage stage of completion (based on costs incurred to date). Any losses will be identified as part of the review against budget so that losses are provided for as soon as management are aware of them.
HYDAC TECHNOLOGY LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 13 -
1.5
Property, plant and equipment
Property, plant and equipment are initially measured at cost and subsequently measured at cost net of depreciation and any impairment losses.
Depreciation is provided at rates calculated to write off the cost less estimated residual value of each asset over its expected useful life, as follows:
Freehold land and buildings
Land Nil/Buildings 2% on cost/10% reducing balance
Plant and equipment
25% reducing balance
Motor vehicles
25% reducing balance
The gain or loss arising on the disposal of an asset is determined as the difference between the sale proceeds and the carrying value of the asset, and is credited or charged to profit or loss.
1.6
Impairment of tangible assets
At each reporting end date, the company reviews the carrying amounts of its tangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where it is not possible to estimate the recoverable amount of an individual asset, the company estimates the recoverable amount of the cash-generating unit to which the asset belongs.
1.7
Inventories
Inventories are stated at the lower of cost and net realisable value. Net realisable value is the estimated selling price less all estimated costs of completion and costs to be incurred in marketing, selling and distribution. A provision is made for slow moving inventories. The cost of finished goods and work in progress comprises raw materials, direct labour, and other direct costs.
1.8
Financial assets
Financial instruments are recognised in the company's statement of financial position when the company becomes party to the contractual provisions of the instrument.
Financial assets and liabilities are offset, with the net amounts presented in the financial statements, when there is a legally enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously.
Trade receivables, loans and other receivables that have fixed or determinable payments that are not quoted in an active market are measured at amortised cost using the effective interest method, less any impairment.
Interest is recognised by applying the effective interest rate, except for short-term receivables when the recognition of interest would be immaterial. The effective interest method is a method of calculating the amortised cost of a debt instrument and of allocating the interest income over the relevant period. The effective interest rate is the rate that exactly discounts estimated future cash receipts through the expected life of the debt instrument to the net carrying amount on initial recognition.
Impairment of financial assets
Financial assets, other than those held at fair value are assessed for indicators of impairment at each reporting end date.
Financial assets are impaired where there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial asset, the estimated future cash flows have been affected.
HYDAC TECHNOLOGY LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 14 -
Derecognition of financial assets
Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire or are settled, or when the company transfers the financial asset and substantially all the risks and rewards of ownership to another entity, or if some significant risks and rewards of ownership are retained but control of the asset has transferred to another party that is able to sell the asset in its entirety to an unrelated third party.
1.9
Financial liabilities
Basic financial liabilities, including trade and other payables and loans from fellow group companies that are classified as debt, are initially recognised at transaction price unless the arrangement constitutes a financing transaction, where the debt instrument is measured at the present value of the future receipts discounted at a market rate of interest.
Debt instruments are subsequently carried at amortised cost, using the effective interest rate method.
Trade payables are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Accounts payable are classified as current liabilities if payment is due within one year or less. If not, they are presented as non-current liabilities. Trade payables are recognised initially at transaction price and subsequently measured at amortised cost using the effective interest method.
Derecognition of financial liabilities
Financial liabilities are derecognised when the company’s contractual obligations expire or are discharged or cancelled.
1.10
Equity instruments
Equity instruments issued by the company are recorded at the proceeds received, net of transaction costs. Dividends payable on equity instruments are recognised as liabilities once they are no longer at the discretion of the company.
1.11
Taxation
The tax expense represents the sum of the tax currently payable and deferred tax.
Current tax
The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the income statement because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The company’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.
Deferred tax
Deferred tax liabilities are generally recognised for all timing differences and deferred tax assets are recognised to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits. Such assets and liabilities are not recognised if the timing difference arises from goodwill or from the initial recognition of other assets and liabilities in a transaction that affects neither the tax profit nor the accounting profit.
The carrying amount of deferred tax assets is reviewed at each reporting end date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realised. Deferred tax is charged or credited in the income statement, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity. Deferred tax assets and liabilities are offset when the company has a legally enforceable right to offset current tax assets and liabilities and the deferred tax assets and liabilities relate to taxes levied by the same tax authority.
HYDAC TECHNOLOGY LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 15 -
1.12
Provisions
Provisions are recognised when the company has a legal or constructive present obligation as a result of a past event, it is probable that the company will be required to settle that obligation and a reliable estimate can be made of the amount of the obligation.
The amount recognised as a provision is the best estimate of the consideration required to settle the present obligation at the reporting end date, taking into account the risks and uncertainties surrounding the obligation. Where the effect of the time value of money is material, the amount expected to be required to settle the obligation is recognised at present value. When a provision is measured at present value, the unwinding of the discount is recognised as a finance cost in profit or loss in the period in which it arises.
1.13
Employee benefits
The company contributes to a defined contribution scheme for the benefit of its employees. Contributions payable are charged to the profit and loss account in the year they are payable.
1.14
Leases
Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessees. All other leases are classified as operating leases.
Assets held under finance leases are recognised as assets at the lower of the assets fair value at the date of inception and the present value of the minimum lease payments. The related liability is included in the statement of financial position as a finance lease obligation. Lease payments are treated as consisting of capital and interest elements. The interest is charged to profit or loss so as to produce a constant periodic rate of interest on the remaining balance of the liability.
Rentals payable under operating leases, including any lease incentives received, are charged to profit or loss on a straight line basis over the term of the relevant lease except where another more systematic basis is more representative of the time pattern in which economic benefits from the leases asset are consumed.
1.15
Foreign exchange
Transactions in currencies other than pounds sterling are recorded at the rates of exchange prevailing at the dates of the transactions. At each reporting end date, monetary assets and liabilities that are denominated in foreign currencies are retranslated at the rates prevailing on the reporting end date. Gains and losses arising on translation in the period are included in profit or loss.
1.16
The company has taken advantage of the exemption under section 401 of the Companies Act 2006 not to prepare consolidated accounts. The financial statements present information about the company as an individual entity and not about its group.
Hydac Technology Limited is a wholly owned subsidiary of INTHOL Beteiligungs-und-Verwaltungs GmbH and the results of Hydac Technology Limited are included in the consolidated financial statements of INTHOL Beteiligungs-und-Verwaltungs GmbH which are publicly available.
HYDAC TECHNOLOGY LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 16 -
2
Judgements and key sources of estimation uncertainty
In the application of the company’s accounting policies, the directors are required to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised where the revision affects only that period, or in the period of the revision and future periods where the revision affects both current and future periods.
Key sources of estimation uncertainty
The estimates and assumptions which have a significant risk of causing a material adjustment to the carrying amount of assets and liabilities are as follows.
Inventory Provision
A provision for slow moving inventory is included in order to provide for slow moving items in line with group policy and is based upon usage levels.
Deferred and accrued income
Revenue on long term projects is recognised based on level of completion of the project. The percentage complete is determined through the costs incurred to date over the total expected costs.
3
Revenue
An analysis of the company's revenue is as follows:
2023
2022
£
£
Revenue analysed by class of business
Industrial
13,603,098
11,924,239
Mobile
16,358,297
15,955,497
Export
2,911,266
2,955,433
32,872,661
30,835,169
2023
2022
£
£
Revenue analysed by geographical market
United Kingdom
26,140,816
24,810,684
Europe
5,320,901
4,901,185
Rest of World
1,410,944
1,123,300
32,872,661
30,835,169
HYDAC TECHNOLOGY LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 17 -
4
Operating profit
2023
2022
Operating profit for the year is stated after charging/(crediting):
£
£
Exchange losses/(gains)
123,825
(295,471)
Fees payable to the company's auditor for the audit of the company's financial statements
43,035
39,259
Depreciation of owned property, plant and equipment
434,922
394,446
(Profit)/loss on disposal of property, plant and equipment
(935)
1,185
Operating lease charges
334,401
301,139
5
Employees
The average monthly number of persons (including directors) employed by the company during the year was:
2023
2022
Number
Number
Administration
30
28
Warehouse and production
42
51
Selling and technical
85
79
Total
157
158
Their aggregate remuneration comprised:
2023
2022
£
£
Wages and salaries
6,332,431
5,772,958
Social security costs
676,679
622,680
Pension costs
484,107
419,920
7,493,217
6,815,558
6
Directors' remuneration
2023
2022
£
£
Remuneration for qualifying services
252,806
243,689
Company pension contributions to defined contribution schemes
9,775
9,180
262,581
252,869
HYDAC TECHNOLOGY LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
6
Directors' remuneration
(Continued)
- 18 -
Remuneration disclosed above include the following amounts paid to the highest paid director:
2023
2022
£
£
Remuneration for qualifying services
178,223
168,272
Company pension contributions to defined contribution schemes
9,775
9,180
7
Investment income
2023
2022
£
£
Interest income
Interest on bank deposits
43,951
901
Other interest income
221
Total interest revenue
44,172
901
Income from fixed asset investments
Income from shares in group undertakings
25,916,534
1,320,573
Total income
25,960,706
1,321,474
8
Taxation
2023
2022
£
£
Current tax
UK corporation tax on profits for the current period
456,951
446,798
Deferred tax
Origination and reversal of timing differences
48,543
23,691
Total tax charge
505,494
470,489
HYDAC TECHNOLOGY LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
8
Taxation
(Continued)
- 19 -
The actual charge for the year can be reconciled to the expected charge for the year based on the profit or loss and the standard rate of tax as follows:
2023
2022
£
£
Profit before taxation
27,895,464
3,705,758
Expected tax charge based on the standard rate of corporation tax in the UK of 25.00% (2022: 19.00%)
6,973,866
704,094
Tax effect of expenses that are not deductible in determining taxable profit
4,497
2,130
Effect of change in corporation tax rate
(28,742)
Permanent capital allowances in excess of depreciation
29,412
9,488
Deferred tax adjustments in respect of prior years
5,595
5,686
Dividend income
(6,479,134)
(250,909)
Taxation charge for the year
505,494
470,489
9
Dividends
2023
2022
2023
2022
Per share
Per share
Total
Total
£
£
£
£
Ordinary shares
Interim paid
2.59
1.32
25,916,534
1,320,573
HYDAC TECHNOLOGY LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 20 -
10
Property, plant and equipment
Freehold land and buildings
Plant and equipment
Motor vehicles
Total
£
£
£
£
Cost or valuation
At 1 January 2023
8,450,138
4,172,212
3,541
12,625,891
Additions
113,917
343,866
457,783
Disposals
(41,435)
(41,435)
At 31 December 2023
8,564,055
4,474,643
3,541
13,042,239
Depreciation and impairment
At 1 January 2023
1,593,765
3,287,722
2,911
4,884,398
Depreciation charged in the year
153,940
280,824
157
434,921
Eliminated in respect of disposals
(38,108)
(38,108)
At 31 December 2023
1,747,705
3,530,438
3,068
5,281,211
Carrying amount
At 31 December 2023
6,816,350
944,205
473
7,761,028
At 31 December 2022
6,856,373
884,490
630
7,741,493
The company took advantage of the transitional arrangements under FRS15 and later FRS 102 and in the financial statements for the year ended 31 December 2001, the company retained the book amounts as deemed cost at that date of the land and buildings that had previously been revalued in accordance with the company's accounting policies. The land and buildings concerned were independently valued in 1987 and are carried at their valuation at that date, being £621,389.
If the land and buildings had not been revalued, they would have been included at the following amounts:
Land and buildings
2023
2022
£
£
Cost
721,389
721,389
Accumulated depreciation
(508,153)
(493,725)
Carrying value
213,236
227,664
11
Fixed asset investments
2023
2022
Notes
£
£
Investments in subsidiaries
12
2,835,582
2,835,582
HYDAC TECHNOLOGY LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
11
Fixed asset investments
(Continued)
- 21 -
Fair value of financial assets carried at amortised cost
The directors consider that the carrying amounts of financial assets carried at amortised cost in the financial statements approximate to their fair values.
12
Subsidiaries
These financial statements are separate company financial statements for Hydac Technology Limted.
Details of the company's subsidiaries at 31 December 2023 are as follows:
Name of undertaking
Registered office
Nature of business
Class of
% Held
shares held
Direct
Indirect
Hydac Technology Corporation
USA
Hydraulic components
Ordinary
100.00
-
Hydac International Corporation
USA
Hydraulic components
Ordinary
100.00
-
Hydac International SADECV
Mexico
Hydraulic components
Ordinary
-
99.00
Hydac Corporation
Canada
Hydraulic components
Ordinary
-
100.00
13
Inventories
2023
2022
£
£
Work in progress
376,211
360,761
Finished goods and goods for resale
5,037,834
4,266,223
5,414,045
4,626,984
14
Trade and other receivables
2023
2022
Amounts falling due within one year:
£
£
Trade receivables
4,955,877
6,454,236
Amounts owed by group undertakings
533,912
545,587
Prepayments and accrued income
240,682
418,928
5,730,471
7,418,751
HYDAC TECHNOLOGY LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 22 -
15
Current liabilities
2023
2022
Notes
£
£
Payments received on account
233,815
169,898
Trade payables
440,950
689,098
Amounts owed to group undertakings
2,096,941
2,398,638
Corporation tax
45,641
295,262
Other taxation and social security
830,546
1,064,315
Deferred income
18
469,802
290,301
Other payables
9,837
27,252
Accruals and deferred income
234,310
191,001
4,361,842
5,125,765
16
Provisions for liabilities
2023
2022
£
£
Specific product defect reserve
59,000
59,000
Movements on provisions:
Specific product defect reserve
£
At 1 January 2023 and 31 December 2023
59,000
The defect reserve is in respect of the probable cost of rectification of defects which relate to specific products. These provisions have been made on an individual product basis.
17
Deferred taxation
The following are the major deferred tax liabilities and assets recognised by the company and movements thereon:
Liabilities
Liabilities
2023
2022
Balances:
£
£
Accelerated capital allowances
407,030
358,487
HYDAC TECHNOLOGY LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
17
Deferred taxation
(Continued)
- 23 -
2023
Movements in the year:
£
Liability at 1 January 2023
358,487
Charge to profit or loss
48,543
Liability at 31 December 2023
407,030
18
Deferred income
2023
2022
£
£
Other deferred income
469,802
290,301
19
Retirement benefit schemes
2023
2022
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
484,107
419,920
The company contributes to a defined contribution pension scheme for all qualifying employees. The assets of the scheme are held separately from those of the company in an independently administered fund.
20
Share capital
2023
2022
2023
2022
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary shares of £1 each
1,000,000
1,000,000
1,000,000
1,000,000
HYDAC TECHNOLOGY LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 24 -
21
Operating lease commitments
Lessee
Amounts recognised in profit or loss as an expense during the period in respect of operating lease arrangements are as follows:
At the reporting end date the company had outstanding commitments for future minimum lease payments under non-cancellable operating leases, which fall due as follows:
2023
2022
£
£
Within one year
321,699
141,804
Between two and five years
588,735
235,524
910,434
377,328
22
Ultimate controlling party
The ultimate parent undertaking in the current and previous financial year is INTHOL Beteiligungs-und-Verwaltungs GmbH, a company registered in Germany.
The company's immediate parent undertaking in the current and previous financial year is Hydac Limited, a company registered in England and Wales.
The smallest and largest group into which the company is consolidated is headed up by INTHOL Beteiligungs-und-Verwaltungs GmbH. These group accounts are available from The Registrar, Companies House, Cardiff, CF4 3UZ.
23
Related party transactions
During the year, the company entered into transactions with other companies in the Hydac group as follows:
1) Sales of £2,731,290 (2022 : £2,385,695)
2) Purchases of £16,646,129 (2022 : £16,449,696)
The amounts due from these companies at the year end was £533,912 (2022 : £545,587)
The amounts due to these companies at the year end was £2,096,941 (2022 : £2,398,638)
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