REGISTERED NUMBER: |
Strategic Report, Report of the Director and |
Financial Statements for the Year Ended 31 December 2023 |
for |
Swarco Hitex Ltd |
REGISTERED NUMBER: |
Strategic Report, Report of the Director and |
Financial Statements for the Year Ended 31 December 2023 |
for |
Swarco Hitex Ltd |
Swarco Hitex Ltd (Registered number: 04371466) |
Contents of the Financial Statements |
for the Year Ended 31 December 2023 |
Page |
Company Information | 1 |
Strategic Report | 2 |
Report of the Director | 10 |
Report of the Independent Auditors | 12 |
Statement of Comprehensive Income | 15 |
Balance Sheet | 16 |
Statement of Changes in Equity | 17 |
Notes to the Financial Statements | 18 |
Swarco Hitex Ltd |
Company Information |
for the Year Ended 31 December 2023 |
DIRECTOR: |
REGISTERED OFFICE: |
REGISTERED NUMBER: |
AUDITORS: |
Statutory Auditor |
3rd Floor Pacific Chambers |
11-13 Victoria Street |
Liverpool |
Merseyside |
L2 5QQ |
Swarco Hitex Ltd (Registered number: 04371466) |
Strategic Report |
for the Year Ended 31 December 2023 |
The director presents his strategic report for the year ended 31 December 2023. |
Swarco Hitex Ltd is an independent market leader in the manufacture of innovative road marking materials. |
REVIEW OF BUSINESS |
A summary of the results of the business is shown below. |
The key financial highlights are as below |
31.12.23 | 31.12.22 | 31.12.21 |
£ |
Turnover | 22,806,409 | 19,305,766 | 12,611,527 |
Gross profit margin | 26.1% | 20.3% | 29.0% |
Profit before tax | 3.318.548 | 1,279,112 | 2,298,388 |
Operating across numerous countries and regions worldwide, the company engages in diverse international trade. Despite operating within an intensely competitive market, we experienced an increase in sales volume, reflecting the robustness of our global operations. However, amidst this growth, we remain vigilant in managing our operating costs, recognizing the persistent challenges posed by escalating energy expenses and raw material costs. Additionally, we navigate the impact of ongoing pressure on public spending, underscoring the importance of prudent financial management and strategic decision-making in maintaining our competitive edge and sustaining profitability. |
The increase in turnover is a combination of several factors: |
- increase in sales quantities across the entire portfolio, this relates to UK sales as well to overseas; |
- increase in average sales price, which was related to cover increased costs of raw materials, increased energy costs and general increases due to high inflation; |
- larger product offering of SWARCO products. |
The increase in net profit is due to: |
- the non-occurrence of one-time effects related to post-acquisition costs; |
- non-occurrence of employee settlements; |
- optimization of supply; |
- knowhow exchange between SWARCO group companies. |
PERFORMANCE MANAGEMENT |
The Director spearheads the development of long-term financial plans aimed at enhancing performance across all facets of the business. Monthly performance reviews are conducted meticulously, during which the Director meticulously evaluates the Company's performance by juxtaposing actual results against both prior year and budgetary benchmarks. This analysis is comprehensive, with a particular focus on scrutinizing turnover, operating costs, cash flows, and working capital levels to ensure optimal financial health and operational efficiency. Through this rigorous performance management process, we continuously strive for improvement and alignment with strategic objectives, fostering a culture of accountability and excellence throughout the organization. |
Swarco Hitex Ltd (Registered number: 04371466) |
Strategic Report |
for the Year Ended 31 December 2023 |
PRINCIPAL RISKS AND UNCERTAINTIES |
In our strategic report, we recognize that there exist a multitude of potential risks and uncertainties that could significantly influence the long-term performance of Swarco Hitex Ltd. Our risk management process is designed to facilitate early identification, evaluation, and effective management of these risks, ensuring the preservation of value and the realization of strategic objectives. The Director has identified the following as the principal risks and uncertainties that could have the most significant impact on the Company's value generation: |
Market and Competitive Dynamics: Fluctuations in market conditions and intense competition within our industry pose significant risks to our business. Changes in consumer preferences or aggressive pricing strategies by competitors could erode our market share and undermine our financial performance. |
Supply Chain Disruptions: Dependencies on suppliers and logistical networks expose us to supply chain disruptions, including shortages of raw materials, transportation delays, or geopolitical instability. Any disruption to the supply chain could disrupt production schedules, increase costs, and adversely affect our ability to meet customer demand. |
Regulatory and Compliance Risks: Evolving regulatory requirements and compliance obligations present ongoing challenges for our operations. Non-compliance with regulations pertaining to product safety, environmental standards, or data protection could result in legal liabilities, fines, or reputational damage. |
Financial Risks: Economic uncertainties, currency fluctuations, and liquidity constraints pose financial risks to our business. Volatility in financial markets, changes in interest rates, or credit risks associated with customers and counterparties could impact our cash flows, profitability, and financial stability. |
Operational Resilience: Operational disruptions, including equipment failures, IT outages, or workforce disruptions, pose operational risks to our business continuity. Inadequate disaster recovery plans, insufficient redundancies, or human errors could result in downtime, production losses, and reputational harm. |
Mitigation Strategies |
To address these principal risks and uncertainties effectively, Swarco Hitex Ltd. implements a comprehensive risk management framework, encompassing the following mitigation strategies: |
Risk Identification and Assessment: Regular risk assessments and scenario analyses enable us to identify and evaluate potential risks, prioritizing those with the highest likelihood and impact on our business objectives. |
Control Implementation: Robust internal controls and governance structures are implemented to mitigate identified risks effectively. These controls encompass operational procedures, compliance measures, and technological safeguards to minimize risk exposure. |
Monitoring and Review: Ongoing monitoring and review mechanisms ensure the effectiveness of risk mitigation measures and enable timely adjustments in response to changing risk profiles or emerging threats. |
The company remains vigilant in assessing and managing the principal risks and uncertainties that could impact our long-term performance and value generation. Through proactive risk management practices, stringent controls, and continuous monitoring, we strive to mitigate risks effectively, preserve shareholder value, and ensure the resilience and sustainability of our business in an ever-evolving operating environment. |
Swarco Hitex Ltd (Registered number: 04371466) |
Strategic Report |
for the Year Ended 31 December 2023 |
COMPETITOR ENVIRONMENT AND CUSTOMER RISK |
In the market landscape where Hitex Traffic Safety Ltd. operates, strong competition poses inherent risks of potential customer attrition to competitors. However, our strategic approach focuses on mitigating these risks through robust customer and supplier relationships, prioritizing high levels of support, quality, and innovation. |
Competitor Environment: |
Intense Market Competition: The market in which the company operates is characterized by intense competition, with numerous players vying for market share and customer attention, each striving to differentiate their offerings and capture market leadership. |
Market Dynamics: Market dynamics such as changing technological advancements, and regulatory shifts contribute to the competitive landscape. Continuous monitoring of market trends and competitor strategies is essential to anticipate and respond effectively to market developments. |
Customer Risk Management: |
Strong Customer Relationships: The company mitigates the risk of customer attrition by fostering strong relationships with customers. Through regular communication, personalized service, and attentive support, we aim to build trust and loyalty, ensuring that customers choose to remain engaged with our brand despite competitive pressures. |
Supplier Relationships: Equally important are our relationships with suppliers, as they directly impact our ability to deliver quality products and services to customers. By cultivating collaborative partnerships with reliable suppliers, we mitigate supply chain risks and ensure timely delivery of goods to meet customer demand. |
Focus on Customer Service and Quality: |
The company places a strong emphasis on delivering exceptional customer service and high-quality products. By consistently exceeding customer expectations and maintaining stringent quality standards, we differentiate ourselves from competitors and strengthen customer loyalty. |
Key Performance Indicators (KPIs): |
Service Levels: Monitoring service levels, including response times, order fulfilment rates, and resolution times, allows us to gauge our performance in meeting customer expectations and identify areas for improvement. |
Customer Complaints: Tracking and analysing customer complaints provide valuable insights into areas of dissatisfaction and opportunities for service enhancement. By addressing customer concerns promptly and effectively, we demonstrate our commitment to customer satisfaction and retention. |
While the competitive environment presents inherent risks of customer attrition, we adopt a proactive approach to managing these risks through strong customer and supplier relationships, superior customer service, quality products, and innovative products. By closely monitoring key performance indicators and continuously refining our strategies, we position ourselves for sustained success and competitiveness in the market. |
Swarco Hitex Ltd (Registered number: 04371466) |
Strategic Report |
for the Year Ended 31 December 2023 |
STATE OF THE ECONOMY |
The state of the UK economy has both opportunities and challenges for Hitex Traffic Safety Ltd. as a road marking material manufacturer. While economic recovery and infrastructure investments drive demand for road marking products, inflationary pressures, supply chain disruptions, and regulatory requirements pose challenges to operational efficiency and profitability. By closely monitoring economic trends, adapting to market dynamics, and implementing proactive strategies, we are well-positioned to navigate the evolving economic landscape and sustain long-term growth and resilience in our industry. |
Growth and Recovery: The UK economy has been experiencing a period of recovery following the disruptions caused by the COVID-19 pandemic. Government stimulus measures, vaccination efforts, and easing restrictions have contributed to a rebound in economic activity across various sectors. |
Inflation and Supply Chain Pressures: Despite the recovery, inflationary pressures and supply chain disruptions remain key challenges. Rising energy costs, global supply chain bottlenecks, and shortages of raw materials have led to inflationary pressures, impacting production costs and sales prices. |
Labour Market Dynamics: Labour market dynamics continue to evolve, with shifts in workforce participation, remote working trends, and skills shortages influencing employment patterns. Recruitment challenges and wage pressures are prevalent in our industry, affecting overall labour costs and productivity. |
Implications for Road Marking Material Manufacturing: |
Construction Sector Activity: The performance of the construction sector directly impacts demand for road marking materials. As economic conditions improve, infrastructure investment and construction projects are expected to drive demand for road marking products, particularly in road maintenance and new construction projects. |
Input Cost Volatility: Fluctuations in input costs, including raw materials, energy prices, and transportation expenses, pose challenges for cost management and pricing strategies. Effective supply chain management and strategic procurement practices are essential to mitigate the impact of input cost volatility on profitability. |
Regulatory Environment: Regulatory developments and sustainability initiatives play a significant role in shaping the road marking materials industry. Compliance with environmental regulations, adoption of eco-friendly materials, and innovation in sustainable road marking solutions are increasingly important considerations for market competitiveness. |
Swarco Hitex Ltd (Registered number: 04371466) |
Strategic Report |
for the Year Ended 31 December 2023 |
FINANCIAL RISK MANAGEMENT |
We prioritize prudent financial risk management to safeguard our operations and optimize shareholder value. In our strategic report, we address two significant financial risks: credit risk and currency risk, emphasizing our proactive measures to mitigate these risks effectively. |
Credit Risk Management: |
Long-standing Customer Relationships: Our longstanding relationships with customers provide us with invaluable insights into their creditworthiness and payment behaviours. We leverage this knowledge to assess credit risk accurately and make informed decisions regarding credit extensions. These relationships also facilitate open communication channels, allowing us to address any potential credit issues promptly. |
Credit Control Procedures and Checks: We have implemented robust credit control procedures and checks to mitigate credit risk effectively. These procedures include thorough credit assessments of new customers, periodic reviews of existing credit arrangements, and monitoring of payment performance. By maintaining stringent credit control measures, we minimize the likelihood of credit defaults and ensure the stability of our receivables portfolio. |
Currency Risk Management: |
Support from Parent Group Treasury Department: Our currency risk management strategy is fully supported by the expertise and resources of our parent group treasury department. Leveraging their extensive experience in foreign exchange markets and hedging strategies, we implement proactive measures to mitigate the impact of currency fluctuations on our financial performance. |
Hedging Instruments: We utilize a range of hedging instruments, such as forward contracts to manage currency risk exposure effectively. These instruments enable us to lock in favourable exchange rates and mitigate the adverse effects of currency volatility on our revenue, expenses, and cash flows. |
Our proactive approach to financial risk management underscores our commitment to preserving the stability and resilience of our business operations. Through long-standing customer relationships, rigorous credit control procedures, and support from our parent group treasury department, we effectively mitigate credit risk and currency risk, ensuring the continued financial health and sustainability of the company. |
Swarco Hitex Ltd (Registered number: 04371466) |
Strategic Report |
for the Year Ended 31 December 2023 |
DEVELOPMENTS AND PERFORMANCE |
We maintain a steadfast commitment to innovation and continuous improvement to ensure that we deliver the best performing and most competitive product range to our customers. Our focus on new product developments serves as a cornerstone of our strategic approach, driving growth and differentiation in the market. |
New Product Developments: |
Market Research and Customer Insights: We invest in comprehensive market research and gather valuable customer insights to identify emerging trends, unmet needs, and areas for product innovation. By understanding our customers' evolving preferences and challenges, we can tailor our product development efforts to deliver solutions that truly resonate with their requirements. |
Cross-Functional Collaboration: Our product development process is characterized by cross-functional collaboration, bringing together teams from research and development, engineering, marketing, and sales. By fostering interdisciplinary teamwork and knowledge sharing, we leverage diverse perspectives and expertise to ideate and execute innovative product concepts. |
Technological Advancements: We harness the latest technological advancements and industry best practices to drive innovation in materials, and manufacturing processes. By staying at the forefront of technological innovation, we are able to develop products that offer superior performance, durability, and reliability compared to traditional offerings in the market. |
Quality Assurance and Testing: Rigorous quality assurance and testing protocols are integral to our product development process, ensuring that our products meet the highest standards of quality, safety, and reliability. By conducting thorough testing and validation procedures, we instil confidence in our customers and uphold our reputation for delivering premium-quality products. |
Performance: |
Market Penetration and Growth: Our focus on new product developments has enabled us to expand our market presence and penetrate new customer segments. By introducing innovative products that address evolving market needs, we have achieved sustained growth and captured market share in competitive environments. |
Customer Satisfaction and Loyalty: The performance of our product range is reflected in the high levels of customer satisfaction and loyalty we have consistently achieved. By delivering products that exceed customer expectations in terms of performance, quality, and value, we have built enduring relationships with our customers and earned their trust and loyalty. |
Competitive Positioning: Our commitment to offering the most competitive product range in the market has strengthened our competitive positioning and differentiated us from competitors. By continuously innovating and staying ahead of industry trends, we remain agile and responsive to market dynamics, enabling us to maintain a competitive edge and sustain long-term success. |
In conclusion, our strategic focus on new product developments underscores our dedication to providing our customers with the best performing and most competitive product range in the industry. Through innovation, collaboration, and a relentless pursuit of excellence, we remain poised for continued growth, profitability, and success in the marketplace. |
Swarco Hitex Ltd (Registered number: 04371466) |
Strategic Report |
for the Year Ended 31 December 2023 |
EMPLOYMENT POLICY |
We recognize that our employees are our most valuable asset, essential to achieving our strategic objectives and maintaining our competitive edge in the market. Our employment policy is crafted with a dual focus on staff retention and training, ensuring the development and retention of a skilled and motivated workforce. |
Staff Retention: |
Competitive Compensation and Benefits: We offer competitive compensation packages and comprehensive benefits to attract and retain top talent within the industry. Our remuneration structure is regularly benchmarked against industry standards to ensure competitiveness. |
Career Development Opportunities: We are committed to providing our employees with ample opportunities for career growth and advancement within the organization. Through ongoing performance evaluations and development discussions, we identify individual career aspirations and provide the necessary support and resources to help employees achieve their goals. |
Training and Development: |
Continuous Learning Culture: We foster a culture of continuous learning and skill development, recognizing that the rapid pace of change in our industry necessitates ongoing upskilling and reskilling. Through both internal and external training programs, employees have access to opportunities to enhance their professional knowledge and expertise. |
Tailored Training Programs: Our training initiatives are tailored to the specific needs and career aspirations of our employees. Whether through technical skill-building workshops, leadership development programs, or mentorship opportunities, we strive to provide targeted training experiences that align with individual career paths and organizational goals. |
Knowledge Sharing and Collaboration: We encourage knowledge sharing and collaboration among employees through cross-functional projects, communities of practice, and internal communication channels. By fostering an environment of collaboration and collective learning, we harness the diverse talents and perspectives of our workforce to drive innovation and excellence. |
Our employment policy underscores our commitment to nurturing a supportive and engaging work environment where employees feel valued, empowered, and motivated to contribute their best. Through strategic investments in staff retention and training initiatives, we aim to cultivate a high-performing workforce capable of driving our company's success both now and in the future. |
RISK OF BUSINESS INTERRUPTION |
The company maintains a robust operational framework designed to mitigate risks and ensure continuity in business operations. Our strategic focus on resilience and proactive risk management strategies significantly minimizes the likelihood of business interruption. |
Diverse Supply Chain: Our supply chain is diversified across multiple regions and suppliers, reducing dependency on any single source and mitigating the impact of potential disruptions. |
Continuity Planning: Comprehensive business continuity plans are in place to address various scenarios, ensuring swift response and minimal disruption in the event of unforeseen circumstances such as natural disasters, cyber threats, or other emergencies. |
Technology Infrastructure: Investments in robust technology infrastructure, including redundant systems and data backups, bolster our ability to maintain operations even during technological challenges or cyber incidents. |
Financial Resilience: Strong financial reserves and risk management practices provide a buffer against economic volatility, enabling the company to weather downturns without significant interruption to core business activities. |
Swarco Hitex Ltd (Registered number: 04371466) |
Strategic Report |
for the Year Ended 31 December 2023 |
Regulatory Compliance: Adherence to regulatory requirements and industry standards not only safeguards against potential disruptions due to non-compliance but also enhances our ability to anticipate and address emerging regulatory risks. |
In conclusion, the company's proactive approach to risk management, coupled with strategic investments in resilience-building measures, positions us favourably with a very low risk of business interruption. We remain committed to continuously monitoring and adapting our strategies to uphold operational stability and deliver value to stakeholders. |
ON BEHALF OF THE BOARD: |
Swarco Hitex Ltd (Registered number: 04371466) |
Report of the Director |
for the Year Ended 31 December 2023 |
The director presents his report with the financial statements of the company for the year ended 31 December 2023. |
CHANGE OF NAME |
The company passed a special resolution on 2 January 2024 changing its name from |
PRINCIPAL ACTIVITY |
The principal activity of the company is to manufacture and sell specialist road surfacing paint. |
DIVIDENDS |
No dividends will be distributed for the year ended 31 December 2023. |
RESEARCH AND DEVELOPMENT |
A main focus of the business is R&D and we have taken on additional staff to support this effort. The results are demonstrated by the increased product range and the reputation for the company in supplying reliable, good quality products at competitive prices. |
FUTURE DEVELOPMENTS |
Future developments continue to be finding sustainable export business, expanding the product range particularly in the growing area of road crack and pothole repair materials. By joining SWARCO RMS' "Center of Competence" knowledge sharing between Hitex and all pool partners will be fostered to broaden SWARCOs product range in all markets. |
DIRECTOR |
EMPLOYEES |
The company carries out ongoing internal training courses for all members of staff on new and improved products. |
Full internal training courses are given to all staff on new systems to ensure Continued Professional Development is on going. |
The staff are involved in regular team building exercises to create a positive workforce. |
STATEMENT OF DIRECTOR'S RESPONSIBILITIES |
The director is responsible for preparing the Report of the Director and the financial statements in accordance with applicable law and regulations. |
Company law requires the director to prepare financial statements for each financial period. Under that law the director has elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). Under company law the director must not approve the financial statements unless he is satisfied that they give a true and fair view of the state of affairs of the company and of the profit or loss of the company for that period. In preparing these financial statements, the director is required to: |
- | select suitable accounting policies and then apply them consistently; |
- | make judgements and accounting 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 director is responsible for keeping adequate accounting records that are sufficient to show and explain the company's transactions and disclose with reasonable accuracy at any time the financial position of the company and enable him to ensure that the financial statements comply with the Companies Act 2006. He is 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. |
Swarco Hitex Ltd (Registered number: 04371466) |
Report of the Director |
for the Year Ended 31 December 2023 |
STATEMENT AS TO DISCLOSURE OF INFORMATION TO AUDITORS |
So far as the director is aware, there is no relevant audit information (as defined by Section 418 of the Companies Act 2006) of which the company's auditors are unaware, and he has taken all the steps that he ought to have taken as a director in order to make himself aware of any relevant audit information and to establish that the company's auditors are aware of that information. |
AUDITORS |
The auditors, Haines Watts, will be proposed for re-appointment at the forthcoming Annual General Meeting. |
ON BEHALF OF THE BOARD: |
Report of the Independent Auditors to the Members of |
Swarco Hitex Ltd |
Opinion |
We have audited the financial statements of Swarco Hitex Ltd (the 'company') for the year ended 31 December 2023 which comprise the Statement of Comprehensive Income, Balance Sheet, Statement of Changes in Equity and Notes to the Financial Statements, including a summary of significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including 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. |
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 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 director's 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 director with respect to going concern are described in the relevant sections of this report. |
Other information |
The director is responsible for the other information. The other information comprises the information in the Strategic Report and the Report of the Director, but does not include the financial statements and our Report of the Auditors thereon. |
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. |
In connection with our audit of the financial statements, 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 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 the audit: |
- | the information given in the Strategic Report and the Report of the Director for the financial year for which the financial statements are prepared is consistent with the financial statements; and |
- | the Strategic Report and the Report of the Director have been prepared in accordance with applicable legal requirements. |
Report of the Independent Auditors to the Members of |
Swarco Hitex Ltd |
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 Report of the Director. |
We have nothing to report in respect of the following matters where 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 director's remuneration specified by law are not made; or |
- | we have not received all the information and explanations we require for our audit. |
Responsibilities of director |
As explained more fully in the Statement of Director's Responsibilities set out on page ten, the director is 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 director determines 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 director is 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 director either intends to liquidate the company or to cease operations, or has 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 a Report of the Auditors 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: |
- | Identifying and assessing the design effectiveness of controls management has in place to prevent and detect fraud; |
- | Understanding how those charged with governance considered and addressed the potential for override of controls or other inappropriate influence over the financial reporting process; |
- | Reviewing financial statements disclosures and testing to supporting documentation to assess compliance with applicable law and regulations; |
- | Challenging assumptions and judgements made by management in its significant accounting estimates; |
- | Identifying and testing journal entries, in particular any journal entries posted with unusual account combinations. |
Our audit did not identify any significant matters relating to the detection of irregularities including fraud. However, despite the audit being planned and conducted in accordance with ISAs (UK) there remains an unavoidable risk that material misstatements in the financial statements may not be detected owing to inherent limitations of the audit, and that by their very nature, any such instances of fraud or irregularity likely involve collusion, forgery, intentional misrepresentations, or the override of internal controls. |
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 Report of the Auditors. |
Report of the Independent Auditors to the Members of |
Swarco Hitex Ltd |
Use of our report |
This report is made solely to the company's members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the company's members those matters we are required to state to them in a Report of the Auditors 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. |
for and on behalf of |
Statutory Auditor |
3rd Floor Pacific Chambers |
11-13 Victoria Street |
Liverpool |
Merseyside |
L2 5QQ |
Swarco Hitex Ltd (Registered number: 04371466) |
Statement of Comprehensive Income |
for the Year Ended 31 December 2023 |
31.12.23 | 31.12.22 |
Notes | £ | £ |
TURNOVER | 3 |
Cost of sales |
GROSS PROFIT |
Administrative expenses |
OPERATING PROFIT | 5 |
Interest receivable and similar income | 6 |
PROFIT BEFORE TAXATION |
Tax on profit | 7 |
PROFIT FOR THE FINANCIAL YEAR |
OTHER COMPREHENSIVE INCOME | - | - |
TOTAL COMPREHENSIVE INCOME FOR THE YEAR |
Swarco Hitex Ltd (Registered number: 04371466) |
Balance Sheet |
31 December 2023 |
31.12.23 | 31.12.22 |
Notes | £ | £ | £ | £ |
FIXED ASSETS |
Tangible assets | 9 |
CURRENT ASSETS |
Stocks | 10 |
Debtors | 11 |
Cash at bank and in hand |
CREDITORS |
Amounts falling due within one year | 12 |
NET CURRENT ASSETS |
TOTAL ASSETS LESS CURRENT LIABILITIES |
PROVISIONS FOR LIABILITIES | 13 |
NET ASSETS |
CAPITAL AND RESERVES |
Called up share capital | 14 |
Retained earnings | 15 |
SHAREHOLDERS' FUNDS |
The financial statements were approved by the director and authorised for issue on |
Swarco Hitex Ltd (Registered number: 04371466) |
Statement of Changes in Equity |
for the Year Ended 31 December 2023 |
Called up |
share | Retained | Total |
capital | earnings | equity |
£ | £ | £ |
Balance at 1 January 2022 |
Changes in equity |
Dividends | - | ( |
) | ( |
) |
Total comprehensive income | - |
Balance at 31 December 2022 |
Changes in equity |
Total comprehensive income | - |
Balance at 31 December 2023 |
Swarco Hitex Ltd (Registered number: 04371466) |
Notes to the Financial Statements |
for the Year Ended 31 December 2023 |
1. | STATUTORY INFORMATION |
Swarco Hitex Ltd is a |
2. | ACCOUNTING POLICIES |
Basis of preparing the financial statements |
These financial statements have been prepared in accordance with FRS102 "The Financial Reporting Standard applicable in the UK and Republic of Ireland" ("FRS 102") and the requirements of the Companies Act 2006, including the provisions of the Large and Medium sized Companies and Groups (Accounts and Reports) Regulations 2008.. The financial statements have been prepared under the historical cost convention. |
The financial statements are prepared in sterling, which is the functional currency of the company. Monetary amounts in these financial statements are rounded to the nearest £. |
Financial Reporting Standard 102 - reduced disclosure exemptions |
The company has taken advantage of the following disclosure exemption in preparing these financial statements, as permitted by FRS 102 "The Financial Reporting Standard applicable in the UK and Republic of Ireland": |
• | the requirements of Section 7 Statement of Cash Flows. |
Significant judgements and estimates |
There are no key assumptions concerning the future, and other key sources of estimation uncertainty at the reporting date, that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year. |
Turnover |
Turnover is measured at the fair value of the consideration received or receivable, excluding discounts, rebates, value added tax and other sales taxes. |
Swarco Hitex Ltd (Registered number: 04371466) |
Notes to the Financial Statements - continued |
for the Year Ended 31 December 2023 |
2. | ACCOUNTING POLICIES - continued |
Tangible fixed assets |
Tangible fixed assets are stated at cost less accumulated depreciation. 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: |
Land and buildings | 2% & 12.5% straight line |
Plant and machinery | 12.5% straight line |
Fixtures, fittings & equipment | 12.5% & 25% straight line |
Motor vehicles | 25% straight line |
Both the useful life and residual value of the assets within the financial statements have been reviewed. The entity have changed the above accounting estimates from reducing balance to a straight line basis of depreciation and have applied the change with effect from 1st January 2022. |
An assessment is made at each reporting date of whether there are indications that a fixed asset may be impaired or that an impairment loss previously recognised has fully or partially reversed. If such indications exist, the Company estimates the recoverable amount of the asset or, for goodwill, the recoverable amount of the cash-generating unit to which the goodwill belongs. |
Shortfalls between the carrying value of fixed assets and their recoverable amounts, being the higher of fair value less costs to sell and value-in-use, are recognised as impairment losses. Impairments of revalued assets are treated as a revaluation loss. All other impairment losses are recognised in the Profit and Loss Account. |
Recognised impairment losses are reversed if, and only if, the reasons for the impairment loss have ceased to apply. Reversals of impairment losses are recognised in the Profit and Loss Account or, for revalued assets, as a revaluation gain. On reversal of an impairment loss, the depreciation or amortisation is adjusted to allocate the asset's revised carrying amount (less any residual value) over its remaining useful life. |
Stocks |
Stocks are valued at the lower of cost and net realisable value, after making due allowance for obsolete and slow moving items. |
Taxation |
Taxation for the year comprises current and deferred tax. Tax is recognised in the Statement of Comprehensive Income, except to the extent that it relates to items recognised in other comprehensive income or directly in equity. |
Current or deferred taxation assets and liabilities are not discounted. |
Current tax is recognised at the amount of tax payable using the tax rates and laws that have been enacted or substantively enacted by the balance sheet date. |
Swarco Hitex Ltd (Registered number: 04371466) |
Notes to the Financial Statements - continued |
for the Year Ended 31 December 2023 |
2. | ACCOUNTING POLICIES - continued |
Deferred tax |
Deferred tax is recognised in respect of all timing differences that have originated but not reversed at the balance sheet date. |
Timing differences arise from the inclusion of income and expenses in tax assessments in periods different from those in which they are recognised in financial statements. Deferred tax is measured using tax rates and laws that have been enacted or substantively enacted by the year end and that are expected to apply to the reversal of the timing difference. |
Unrelieved tax losses and other deferred tax assets are recognised only to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits. |
Research and development |
Expenditure on long term research & development activities, where research findings are applied to a plan or design for the production of new or substantially improved products and processes, is capitalised if the product or process is technically and commercially feasible and the company has sufficient resources to complete development. The expenditure capitalised includes the cost of materials, direct labour and directly related ancillary costs. Other development expenditure is recognised in the income statement as an expense as incurred. Capitalised research & development expenditure is stated at cost less accumulated amortisation. |
Foreign currencies |
Assets and liabilities in foreign currencies are translated into sterling at the rates of exchange ruling at the balance sheet date. Transactions in foreign currencies are translated into sterling at the rate of exchange ruling at the date of transaction. Exchange differences are taken into account in arriving at the operating result. |
Hire purchase and leasing commitments |
Rentals paid under operating leases are charged to the profit & loss account on a straight line basis over the period of the lease. |
Pension costs and other post-retirement benefits |
The company operates a defined contribution pension scheme. Contributions payable to the company's pension scheme are charged to profit or loss in the period to which they relate. |
Debtors |
Short term debtors are measured at transaction price, less any impairment. |
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. |
Creditors |
Short term creditors are measured at the transaction price. Other financial liabilities, are measured initially at fair value, net of transaction costs and are measured subsequently at amortised cost using the effective interest method. |
Financial instruments |
The Company only enters into basic financial instrument transactions that result in the recognition of financial assets and liabilities such as trade and other accounts receivable and payable, loans from banks and loans to related parties. Trade and other debtors are measured at transaction price less any impairment. Trade and other creditors are measured at 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. |
Swarco Hitex Ltd (Registered number: 04371466) |
Notes to the Financial Statements - continued |
for the Year Ended 31 December 2023 |
3. | TURNOVER |
The turnover and profit before taxation are attributable to the one principal activity of the company. |
An analysis of turnover by geographical market is given below: |
31.12.23 | 31.12.22 |
£ | £ |
United Kingdom |
Overseas | 1,844,048 | 1,412,356 |
4. | EMPLOYEES AND DIRECTORS |
31.12.23 | 31.12.22 |
£ | £ |
Wages and salaries |
Social security costs |
Other pension costs |
The average number of employees during the year was as follows: |
31.12.23 | 31.12.22 |
Employees |
31.12.23 | 31.12.22 |
£ | £ |
Directors' remuneration |
Directors' pension contributions to money purchase schemes |
The number of directors to whom retirement benefits were accruing was as follows: |
Money purchase schemes |
Key management personnel |
The directors are considered to be key management personnel for the current and previous year. Their benefits are noted above. |
Swarco Hitex Ltd (Registered number: 04371466) |
Notes to the Financial Statements - continued |
for the Year Ended 31 December 2023 |
5. | OPERATING PROFIT |
The operating profit is stated after charging/(crediting): |
31.12.23 | 31.12.22 |
£ | £ |
Other operating leases |
Depreciation - owned assets |
Profit on disposal of fixed assets | ( |
) | ( |
) |
Auditors' remuneration |
R&D services |
Other non-audit services | 12,429 | 28,137 |
Foreign exchange differences |
6. | INTEREST RECEIVABLE AND SIMILAR INCOME |
31.12.23 | 31.12.22 |
£ | £ |
Deposit account interest |
Intercompany interest |
7. | TAXATION |
Analysis of the tax charge |
The tax charge on the profit for the year was as follows: |
31.12.23 | 31.12.22 |
£ | £ |
Current tax: |
UK corporation tax |
Deferred tax |
Tax on profit |
UK corporation tax was charged at 19%) in 2022. |
Swarco Hitex Ltd (Registered number: 04371466) |
Notes to the Financial Statements - continued |
for the Year Ended 31 December 2023 |
7. | TAXATION - continued |
Reconciliation of total tax charge included in profit and loss |
The tax assessed for the year is lower than the standard rate of corporation tax in the UK. The difference is explained below: |
31.12.23 | 31.12.22 |
£ | £ |
Profit before tax |
Profit multiplied by the standard rate of corporation tax in the UK of (2022 - |
Effects of: |
Expenses not deductible for tax purposes |
Income not taxable for tax purposes | ( |
) | ( |
) |
Capital allowances in excess of depreciation | ( |
) | ( |
) |
Deferred taxation | 101,559 | 36,206 |
respect of previous periods |
Effects of changes in tax rate | (43,067 | ) | - |
Total tax charge | 786,246 | 280,058 |
8. | DIVIDENDS |
31.12.23 | 31.12.22 |
£ | £ |
Ordinary shares of £1 each |
Final |
9. | TANGIBLE FIXED ASSETS |
Fixtures |
Long | Plant and | and | Motor |
leasehold | machinery | fittings | vehicles | Totals |
£ | £ | £ | £ | £ |
COST |
At 1 January 2023 |
Additions |
Disposals | ( |
) | ( |
) |
At 31 December 2023 |
DEPRECIATION |
At 1 January 2023 |
Charge for year |
Eliminated on disposal | ( |
) | ( |
) |
At 31 December 2023 |
NET BOOK VALUE |
At 31 December 2023 |
At 31 December 2022 |
Swarco Hitex Ltd (Registered number: 04371466) |
Notes to the Financial Statements - continued |
for the Year Ended 31 December 2023 |
10. | STOCKS |
31.12.23 | 31.12.22 |
£ | £ |
Raw materials |
Finished goods |
11. | DEBTORS: AMOUNTS FALLING DUE WITHIN ONE YEAR |
31.12.23 | 31.12.22 |
£ | £ |
Trade debtors |
Amounts owed by group undertakings |
Other debtors |
VAT |
Prepayments |
Amounts owed from group undertakings are unsecured and bare quarterly interests at an average rate of 1.2% or are interest free. |
12. | CREDITORS: AMOUNTS FALLING DUE WITHIN ONE YEAR |
31.12.23 | 31.12.22 |
£ | £ |
Trade creditors |
Amounts owed to group undertakings |
Tax |
Social security and other taxes |
VAT | 231,629 | - |
Other creditors |
Accrued expenses |
Amounts owed to group undertakings are unsecured and bare quarterly interests at an average rate of 1.2% or are interest free. |
13. | PROVISIONS FOR LIABILITIES |
31.12.23 | 31.12.22 |
£ | £ |
Deferred tax | 244,695 | 143,136 |
Deferred tax |
£ |
Balance at 1 January 2023 |
Provided during year |
Balance at 31 December 2023 |
Swarco Hitex Ltd (Registered number: 04371466) |
Notes to the Financial Statements - continued |
for the Year Ended 31 December 2023 |
13. | PROVISIONS FOR LIABILITIES - continued |
The deferred tax liability set out above is expected to reverse within the foreseeable future and relates to accelerated capital allowances and other short term timing differences. |
In the budget on 3 March 2021, the UK Government announced an increase in the main UK corporation tax rate from 19% to 25% with effect from 1 April 2023. The change in rate was substantively enacted on 24 May 2021. Deferred tax has been calculated at 25% (2022 - 25%) which was the tax rate substantively enacted at 30 April 2022. |
14. | CALLED UP SHARE CAPITAL |
Allotted, issued and fully paid: |
Number: | Class: | Nominal | 31.12.23 | 31.12.22 |
value: | £ | £ |
Ordinary | £1 | 100 | 100 |
Called up share capital - Represents the nominal value of shares that have been issued. The company's ordinary shares, which carry no right to fixed income, each carry the right to one vote at general meetings of the company. |
15. | RESERVES |
Retained |
earnings |
£ |
At 1 January 2023 |
Profit for the year |
At 31 December 2023 |
Retained earnings - Includes all current and prior period retained profits and losses. |
16. | PENSION COMMITMENTS |
The company operates a defined contribution 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 £39,474 (2022: £26,835). At 31 December 2023 pension contributions of £8,258 (2022: £6,985) were payable and included within other creditors. |
17. | RELATED PARTY DISCLOSURES |
The company has taken advantage of exemption, under the terms of Financial Reporting Standard 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland', not to disclose related party transactions with wholly owned subsidiaries within the group. |
Swarco Hitex Ltd (Registered number: 04371466) |
Notes to the Financial Statements - continued |
for the Year Ended 31 December 2023 |
18. | ULTIMATE PARENT COMPANY AND CONTROLLING PARTY |
The immediate parent undertaking of the company is Hitex Holdings Limited, a company incorporated in England and Wales. |
On 25 October 2021 Swarco AG purchased the entire share capital of Hitex Holdings Limited. Following this, MS Management GmbH, a company incorporated in Austria became the ultimate parent company. Swarco AG is the only group of undertakings to consolidate these financial statements at 31 December 2023. The address is below; |
SWARCO AG |
Blattenwaldweg 8 |
6112 Wattens |
Austria |
The ultimate controlling party is the board of directors of MS Management GmbH by virtue of their shareholdings. |