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Company Registration Number 00556493























SCHAEFFLER (UK) LIMITED





FINANCIAL STATEMENTS





FOR THE YEAR ENDED 31 DECEMBER 2023
























img2a94.png

 
SCHAEFFLER (UK) LIMITED
 

COMPANY INFORMATION


Directors
GP Littlefair 
PJM Evans 
MA Dolloway 




Company secretary
PJM Evans



Registered number
00556493



Registered office
Waleswood Road
Wales Bar

Sheffield

S26 5PN




Independent auditors
Armstrong Watson Audit Limited
Chartered Accountants & Statutory Auditors

Third Floor

10 South Parade

Leeds

West Yorkshire

LS1 5QS




Bankers
Standard Chartered Bank
6th Floor

1 Basinghall Avenue

London

EC2V 5DD




Solicitors
Gowling WLG
Two Snowhill

Birmingham

B4 6WR





 
SCHAEFFLER (UK) LIMITED
 

CONTENTS



Page
Strategic report
1 - 4
Directors' report
5 - 7
Directors' responsibilities statement
8
Independent auditors' report
9 - 12
Income statement
13
Statement of comprehensive income
14
Statement of financial position
15 - 16
Statement of changes in equity
17
Notes to the financial statements
18 - 44


 
SCHAEFFLER (UK) LIMITED
 

STRATEGIC REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023

Introduction
 
The directors present their Strategic report and the financial statements for the year ended 31 December 2023.

Principal activity and business review
 
The principal activities of the Company during 2023 were the manufacture of clutch assemblies for the passenger car and agricultural tractor industries, and the sale of anti-friction bearings and precision components to the industrial sector.
Turnover in 2023 shows an overall increase of 1%, comprising the Automotive Technologies division decrease of 2.1% and the Industrial division increase of 9.7%. The result before tax decreased to 1% of sales in 2023 from 6.9% of sales in 2022, principally due to one-off exceptional price increases for materials and components.  
Control of working capital and cash flow management were key measurables during 2023 and will continue to be a priority during 2024. Working capital reduced significantly during 2023 due to improved stock management and debtor collection activities.

Customers and commercial review

The level of trading at the Sheffield Plant reduced marginally by 1% compared to 2022 and the customer base continued to develop with an increased supply to the automotive aftermarket sector.

Customer satisfaction

The Automotive and Industrial Divisions both maintained consistency with previous years in terms of quality achievements and delivery performance. High quality, dedicated customer service and innovative product development continue to underpin the business. 

Future developments

The Company will continue to work on projects in a variety of industry sectors including automotive, renewable energy, marine, and oil and gas, and investment continues at comparable levels to previous years. The programme of team leader training continued to drive efficiency improvements during the year by adopting best practice models. The Company continues to invest in new activities to support new products, materials and processes with the aim of providing leading edge products and services to all market sectors.

Page 1

 
SCHAEFFLER (UK) LIMITED
 

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

Principal risks and uncertainties
 
Risks are formally reviewed by the senior executive team and appropriate processes put in place to monitor and mitigate them.

Cash flow risk
Detailed cash flow forecasts are prepared monthly with the objective of alerting senior management to potential future risks. The Company operates its banking facilities within a Group Cash Pooling arrangement mitigating the effects of liquidity risks.

Credit risk
Credit risk is the financial exposure generated by the potential default of third parties in fulfilling their obligations. Credit risk arises for the Company if it is unable to recover sums due from customers and it is mitigated by rigorous credit control, credit insurance where appropriate, and the regular review of credit limits utilising data from credit agencies and the Company's own financial and marketing intelligence.

Currency risk
The Company faces currency risk on its currency transaction flows with customers and suppliers. It mitigates the risk by internal hedging and the use of the Group currency pooling arrangement.

Competition risk
The Company operates in a competitive market and must carefully monitor the quality and price of its services. In order to mitigate this risk, we work in close partnership with our customers on the design and development of new products, providing solutions to their problems and continually raising our quality goals.

Page 2

 
SCHAEFFLER (UK) LIMITED
 

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

Directors' statement of compliance with duty to promote the success of the Company
 
Directors' Duties

The directors of the Company, as those of all UK companies, must act in accordance with a set of general duties. These duties are detailed in section 172 of the UK Companies Act 2006 as follows:

A director of a company must act in the way they consider, in good faith, would be the most likely to promote the success of the Company for the benefit of its shareholders as a whole and, in doing so have regard (amongst other matters) to:
the likely consequences of any decisions in the long-term.
the interests of the Company's employees.
the need to foster the Company's business relationships with suppliers, customers and others.
the impact of the Company's operations on the community and environment.
the desirability of the Company maintaining a reputation for high standards of business conduct, and
the need to act fairly as between shareholders of the Company.

The board of directors of Schaeffler (UK) Limited consider individually and together that they have acted in the way they consider in good faith, would be most likely to promote the success of the Company for the benefit of its members as a whole (having regard to shareholders and matters set out in section 172(1) of the Act) in the decisions taken during the year ended 31 December 2023.

Examples of how the directors have oversight of stakeholder matters and have regard for these matters when making decisions are set out in the table below.

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Page 3

 
SCHAEFFLER (UK) LIMITED
 

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

Governance

Board meetings are held during which relevant strategic, governance and performance issues are discussed and addressed in accordance with the requirements of the Act.

All matters discussed, and decisions made, are done so with consideration to the impact on Company
stakeholders in line with the requirements of Section 172 of the Companies Act. The directors are reminded of this requirement at each meeting. 

Our People

The Company is committed to being a responsible business. Our behaviour is aligned with the expectations of our people, clients, investors, communities and society as a whole. People are at the heart of what we do and for our business to succeed we manage our people's performance and develop them through a variety of training, learning and efficiency programmes. All staff members work to the common values of the Company which inform and guide behaviours, that ensure we reach our goals in a structured and professional way. A Company-wide culture has been introduced to ensure a common understanding and application of our people's behaviours and ethics in everything we do. Regular staff meetings, feedback forums, townhall meetings and social events take place to ensure our people feel they are valued, as well as adding value to what we do. 

Business Relationships

Our strategy prioritises organic growth, driven by bringing new prospective business to the Company, as well as introducing new products and services to existing customers. To do this we have to continuously develop and maintain strong client relationships. We value all of our suppliers and have multi-year contracts and longstanding relationships with our key suppliers.

Regular review meetings and dialogue ensure our partners are fully engaged in supporting the success of the business.

Community and Environment

The Company's approach is to use its position to create positive change for the people and communities with which we interact. We actively encourage our colleagues to support the communities around us and we continue to look to support future initiatives that can improve the communities and environments we work in. 

Shareholders

The Board is committed to openly engaging with our shareholders, as we recognize the importance of a continuing effective dialogue so that all parties understand our strategy and business objectives.

These are explained clearly, feedback is encouraged, and any issues or questions raised are properly considered. Shareholder meetings are held as well as several less formal interactions and dialogue sessions aimed at ensuring a common understanding of the collective aims of the members. 


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



................................................
PJM Evans
Director

Date: 9 September 2024

Page 4

 
SCHAEFFLER (UK) LIMITED
 

 
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023

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

Results and dividends

The profit for the year, after taxation, amounted to £631,000 (2022: £6,850,000).

The directors do not recommend a final dividend (2022: £nil).

Directors

The directors who served during the year were:

GP Littlefair 
PJM Evans 
MA Dolloway 

Political contributions

The Company made no political donations or incurred any political expenditure during the year (2022: £nil).

Health and safety of employees

The Company implements a programme of continuous improvement in environmental health and safety activities.
The Company operates to ISO 45001 Safety Standard and the environmental standards EMAS, ISO 14001 and the Energy Management standard ISO 50001.
The Company is dedicated to raising the profile of engineering and manufacturing through membership of Make UK, the SMMT and CIPD. As well as industrial links, the company has links with various universities and further education colleges.

Future developments

The Company will continue to work on projects in a variety of industry sectors including automotive, oil and gas, and investment continues at comparable levels to previous years. The programme of team leader training continued to drive efficiency improvements during the year by adopting best practice models. The Company continues to invest in research and development to support the launch of new products, materials and processes with the aim of providing leading edge products and services to all market sectors.

Engagement with employees

The Company monitors employee satisfaction through employee surveys and also indirectly through its main departmental measures of staff turnover and absence levels.
The Company continues to invest in its Apprenticeship Programme, a scheme that has been in place for over 50 years.

Disabled employees

The Company gives full and fair consideration to applications for employment made by disabled persons having regard to their particular aptitudes and abilities. The training, career development and promotion of disabled persons employed by the Company is an integral part of the policy applicable to all employees.

Page 5

 
SCHAEFFLER (UK) LIMITED
 

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

Stremlined Energy and Carbon Reporting

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Quantification and reporting methodology
We have followed the 2019 HM Government Environmental Reporting Guidelines.
We have also used the GHG Reporting Protocol - Corporate Standard and have used the 2023 UK Government's Conversion Factors for Company Reporting.
Intensity measurement
The chosen intensity measurement ratio is total gross emissions in tonnes of CO2e per £1,000 turnover. 
Energy Efficiency Action Taken:
Since 2019, our electricity is sourced from 100% REGO-Backed renewables.
We have  converted existing lighting in the plant and offices to Energy Efficient LED lighting with motion control wherever possible to lower energy usage for lighting. This is expected to save 285,000 kWh per year in the plant and 31,500 kWh per year in the offices.
We have introduced a program for detecting and repairing air leaks in the compressed air systems, reducing the amount of compressed air produced and therefore the usage of electricity. This is expected to save over 1.5 GWh over the next 10 years.
It is now company policy to allow working  from home and to use video-conferencing where possible for internal and external meetings. This has reduced commuting, national and international travel significantly.
The fleet of company cars are being changed from Diesel to Petrol Hybrid Cars or fully electric.  93% of the fleet is already transferred to the Petrol Hybrid or fully electric, significantly reducing CO2 and particulate emissions. 6 EV charging points have now been installed.
The Compressed Air system pressure has been reduced from 7 bar to 6 bar. This should give a saving of 7% of air produced, further reducing electricity consumed.
Page 6

 
SCHAEFFLER (UK) LIMITED
 

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




Disclosure of information to auditors

Each of the persons who are directors at the time when this Directors' report is approved has confirmed that:
 
so far as the director is aware, there is no relevant audit information of which the Company's auditors are unaware, and

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

Auditors

The auditorsArmstrong Watson Audit Limitedwill be proposed for reappointment in accordance with section 485 of the Companies Act 2006.

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





................................................
PJM Evans
Director

Date: 9 September 2024

Page 7

 
SCHAEFFLER (UK) LIMITED
 

DIRECTORS' RESPONSIBILITIES STATEMENT
FOR THE YEAR ENDED 31 DECEMBER 2023

The directors are responsible for preparing the Strategic report, the Directors' report and the financial statements in accordance with applicable law and regulations.

Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice), including Financial Reporting Standard 101 ‘Reduced Disclosure Framework’. Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the Company and of the profit or loss of the Company for that period.

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

select suitable accounting policies and then apply them consistently;

make judgements and accounting estimates that are reasonable and prudent;

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

prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Company will continue in business.

The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the Company's transactions and disclose with reasonable accuracy at any time the financial position of the Company and to enable them to ensure that the financial statements comply with the Companies Act 2006They are also responsible for safeguarding the assets of the Company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

Page 8

 
SCHAEFFLER (UK) LIMITED
 

 
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF SCHAEFFLER (UK) LIMITED
 

Opinion


We have audited the financial statements of Schaeffler (UK) Limited (the 'Company') for the year ended 31 December 2023, which comprise the Income statement, the Statement of comprehensive income, the Statement of financial position, the Statement of changes in equity and the related notes, including a summary of significant accounting policiesThe financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 101 ‘Reduced Disclosure Framework’ (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 United Kingdom, including the Financial Reporting Council's Ethical Standard and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.


Conclusions relating to going concern


In auditing the financial statements, we have concluded that the directors' use of the going concern basis of accounting in the preparation of the financial statements is appropriate.


Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the Company's ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.


Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.


Other information


The other information comprises the information included in the Annual Report other than the financial statements and our Auditors' report thereon. The directors are responsible for the other information contained within the Annual ReportOur 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.


Page 9

 
SCHAEFFLER (UK) LIMITED
 

 
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF SCHAEFFLER (UK) LIMITED (CONTINUED)


Opinion on other matters prescribed by the Companies Act 2006
 

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


the information given in the 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.


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 directors' 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 set out on page 8, 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.


Page 10

 
SCHAEFFLER (UK) LIMITED
 

 
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF SCHAEFFLER (UK) LIMITED (CONTINUED)


Auditors' responsibilities for the audit of the financial statements
 

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an Auditors' report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.


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

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:
We obtained an understanding of laws and regulations that affect the Company, focusing on those that had a direct effect on the financial statements or that had a fundamental effect on its operations. Key laws and regulations that we identified included the Companies Act 2006, FRS101, tax legislation and employment legislation.
We enquired of the directors, reviewed correspondence with HMRC and reviewed directors meeting minutes for evidence of non-compliance with relevant laws and regulations.
We also reviewed controls the directors have in place to ensure compliance.
We gained an understanding of the controls that the directors have in place to prevent and detect fraud. We enquired of the directors about any incidences of fraud that had taken place during the accounting period.
The risk of fraud and non-compliance with laws and regulations and fraud was discussed within the audit team and tests were planned and performed to address these risks. We identified the potential for fraud in the following areas: management override of controls and revenue recognition.
We reviewed financial statements disclosures and tested to supporting documentation to assess compliance with relevant laws and regulations discussed above
We enquired of the directors and third-party advisors about actual and potential litigation and claims.
We performed analytical procedures to identify any unusual or unexpected relationships that might indicate risks of material misstatement due to fraud.
In addressing the risk of fraud due to management override of internal controls we tested the appropriateness of journal entries and assessed whether the judgements made in making accounting estimates were indicative of a potential bias.

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


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


Page 11

 
SCHAEFFLER (UK) LIMITED
 

 
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF SCHAEFFLER (UK) LIMITED (CONTINUED)


Use of our report
 

This report is made solely to the Company's members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006Our audit work has been undertaken so that we might state to the Company's members those matters we are required to state to them in an Auditors' report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the Company and the Company's members, as a body, for our audit work, for this report, or for the opinions we have formed.





Steven Williams (Senior statutory auditor)
  
for and on behalf of
Armstrong Watson Audit Limited
 
Chartered Accountants
Statutory Auditors
  
Leeds

13 September 2024
Page 12

 
SCHAEFFLER (UK) LIMITED
 

INCOME STATEMENT
FOR THE YEAR ENDED 31 DECEMBER 2023

2023
2022
Note
£000
£000

  

Turnover
 4 
127,951
126,864

Cost of sales
  
(120,668)
(113,081)

Gross profit
  
7,283
13,783

Distribution costs
  
(4,410)
(4,988)

Administrative expenses (excluding exceptional items)
  
(2,546)
(2,472)

Adjusted operating profit
 5 
327
6,323

Exceptional items
 11 
-
1,795

Total operating profit
  
327
8,118

Interest receivable and similar income
 8 
2,231
1,503

Interest payable and similar expenses
 9 
(1,615)
(866)

Profit before tax
  
943
8,755

Tax on profit
 10 
(312)
(1,905)

Profit for the financial year
  
631
6,850

The notes on pages 18 to 44 form part of these financial statements.

Page 13

 
SCHAEFFLER (UK) LIMITED
 

STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2023

2023
2022
Note
£000
£000


Profit for the financial year

  

631
6,850

Other comprehensive income:
  

Items that will not be reclassified to profit or loss:
  


Actuarial loss on defined benefit schemes
  
(9,094)
(34,310)

Tax on other comprehensive income
  
2,269
8,597

Total comprehensive income for the year
  
(6,194)
(18,863)

The notes on pages 18 to 44 form part of these financial statements.

Page 14

 
SCHAEFFLER (UK) LIMITED
REGISTERED NUMBER: 00556493

STATEMENT OF FINANCIAL POSITION
AS AT 31 DECEMBER 2023

2023
2022
Note
£000
£000

Non-current assets
  

Intangible assets
  
13
115

Tangible assets
 13 
5,703
5,565

Investments
  
10
10

Pension asset
  
32,595
39,975

  
38,321
45,665

Current assets
  

Financial assets measured at fair value through profit and loss
 22 
9
-

Inventories
 15 
9,573
10,325

Trade and other receivables
 16 
42,787
45,033

Income tax recoverable
 16 
391
1,477

Cash at bank and in hand
 17 
1,343
-

  
54,103
56,835

Total assets
  
92,424
102,500


Capital and reserves
  

Called up share capital 
 24 
1,000
1,000

Other reserves
 25 
(75,265)
(75,265)

Profit And Loss Account
 25 
102,737
108,931

  
28,472
34,666

Non-current liabilities
  

Post-employment retirement benefit liabilities
 26 
321
327

Deferred tax liabilities
  
7,757
9,742

Other interest-bearing loans and borrowings
  
659
701

  
8,737
10,770

Current liabilities
  

Financial liabilities designated as fair value through profit and loss
 22 
-
142

Trade and other payables
 18 
19,046
16,354

Other interest-bearing loans and borrowings
 18 
36,169
40,365

Contract liabilities
  
-
203

  
55,215
57,064

  

Total equity and liabilities
  
92,424
102,500


Page 15

 
SCHAEFFLER (UK) LIMITED
REGISTERED NUMBER: 00556493

STATEMENT OF FINANCIAL POSITION (CONTINUED)
AS AT 31 DECEMBER 2023

The financial statements were approved and authorised for issue by the board and were signed on its behalf on 9 September 2024.




................................................
MA Dolloway
Director

The notes on pages 18 to 44 form part of these financial statements.

Page 16

 
SCHAEFFLER (UK) LIMITED
 

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


Called up share capital
Other reserves
Profit and loss account
Total equity

£000
£000
£000
£000


At 1 January 2022
1,000
(75,265)
127,794
53,529


Comprehensive income for the year

Profit for the year

-
-
6,850
6,850

Actuarial losses on pension scheme
-
-
(34,310)
(34,310)

Income tax on other comprehensive income
-
-
8,597
8,597


Other comprehensive income for the year
-
-
(25,713)
(25,713)


Total comprehensive income for the year
-
-
(18,863)
(18,863)



At 1 January 2023
1,000
(75,265)
108,931
34,666


Comprehensive income for the year

Profit for the year

-
-
631
631

Actuarial losses on pension scheme
-
-
(9,094)
(9,094)

Income tax on other comprehensive income
-
-
2,269
2,269


Other comprehensive income for the year
-
-
(6,825)
(6,825)


Total comprehensive income for the year
-
-
(6,194)
(6,194)


At 31 December 2023
1,000
(75,265)
102,737
28,472


The notes on pages 18 to 44 form part of these financial statements.

Page 17

 
SCHAEFFLER (UK) LIMITED
 

 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

1.


General information

Schaeffler (UK) Limited is a private company limited by shares, incorporated in England and Wales and domiciled in the UK.

2.Accounting policies

 
2.1

Basis of preparation of financial statements

The financial statements have been prepared under the historical cost convention unless otherwise specified within these accounting policies and in accordance with Financial Reporting Standard 101 'Reduced Disclosure Framework'  and the Companies Act 2006.

The preparation of financial statements in compliance with FRS 101 requires the use of certain critical accounting estimates. It also requires management to exercise judgement in applying the Company's accounting policies (see note 3).

The following principal accounting policies have been applied:

 
2.2

Financial Reporting Standard 101 - reduced disclosure exemptions

The Company has taken advantage of the following disclosure exemptions under FRS 101:
the requirements of IFRS 7 Financial Instruments: Disclosures
the requirement in paragraph 38 of IAS 1 'Presentation of Financial Statements' to present comparative information in respect of:
 - paragraph 73(e) of IAS 16 Property, Plant and Equipment;
 - paragraph 118(e) of IAS 38 Intangible Assets;
the requirements of IAS 7 Statement of Cash Flows
the requirements in IAS 24 Related Party Disclosures to disclose related party transactions entered into between two or more members of a group, provided that any subsidiary which is a party to the transaction is wholly owned by such a member

This information is included in the consolidated financial statements of Schaeffler AG as at 31 December 2023 and these financial statements may be obtained from Schaeffler group website.

 
2.3

Exemption from preparing consolidated financial statements

The Company is a parent company that is also a subsidiary included in the consolidated financial statements of a larger group by a parent undertaking established under the law of a state other than the United Kingdom and is therefore exempt from the requirement to prepare consolidated financial statements under section 401 of the Companies Act 2006.

Page 18

 
SCHAEFFLER (UK) LIMITED
 

 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

2.Accounting policies (continued)

 
2.4

Going concern

The financial statements have been prepared on a going concern basis which the directors consider to be appropriate for the following reasons.
The company is profitable and generates positive net cash flows from operating activities. It meets its day to day working capital requirements from a group funding facility comprising a loan facility of £50m and a cash pooling facility of £10m, which were drawn to the extent of £36m and £1.4m at 31 December 2023. The loan had reduced to £26m at the date of approval of the financial statements.
The directors have prepared profit and cash flow forecasts for the company through to October 2025 which indicate that, taking account of reasonably possible downsides including a slowdown of the economy and a cost of living crisis with regard to inflation and energy costs, the company will have sufficient funds to meet its liabilities as they fall due for that period, with substantial headroom available in terms of undrawn amounts on the group funding facility.
The directors also prepared a heavily sensitised downside case, in which the company could require additional borrowings in addition to the current facility limits. The directors have no reason to believe that the parent company Schaeffler AG would not continue to provide financial support to the company if that heavily sensitised downside case arose, for at least the period of twelve months from the date of approval of these financial statements.
As with any company placing reliance on other group entities for financial support, the directors acknowledge that there can be no certainty that this support will continue although, at the date of approval of these financial statements, they have no reason to believe that it will not do so.
Consequently, the directors are confident that the company will have sufficient funds to continue to meet its liabilities as they fall due until at least 12 months from the date of approval of the financial statements and therefore have prepared the financial statements on a going concern basis.

 
2.5

Foreign currency translation

Functional and presentation currency

The Company's functional and presentational currency is GBP.

Transactions and balances

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

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

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

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

Page 19

 
SCHAEFFLER (UK) LIMITED
 

 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

2.Accounting policies (continued)

 
2.6

Revenue

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

Sale of goods

Revenue from the sale of goods is recognised on the satisfaction of performance obligations, such as the transfer of a promised good, identified in the contract between the Company and the customer.

A receivable is recognised when the goods are delivered as this is the point in time that the consideration is unconditional because only the passage of time is required before the payment is due.

Customer tools

The Company has concluded that it will have distinct performance obligations to the customer for tools for initial series production and is, therefore, required to recognise revenue when the customer obtains control.

Customer-specific products

Schaeffler (UK) Limited has an enforceable right to payment from the customer for these products amounting to at least any costs of performance completed to date plus a reasonable profit margin.

The products manufactured tend to be tailored to each individual customer's requirement, however they can be purchased and potentially used by any customer

 
2.7

Leases

The Company as a lessee

The Company assesses whether a contract is or contains a lease, at inception of a contract. The Company recognises a right-of-use asset and a corresponding lease liability with respect to all lease agreements in which it is the lessee, except for short-term leases (defined as leases with a lease term of 12 months or less) and leases of low value assets. For these leases, the Company recognises the lease payments as an operating expense on a straight-line basis over the term of the lease unless another systematic basis is more representative of the time pattern in which economic benefits from the leased asset are consumed.

The lease liability is initially measured at the present value of the lease payments that are not paid at the commencement date, discounted by using the rate implicit in the lease. If this rate cannot be readily determined, the Company uses its incremental borrowing rate.

Lease payments included in the measurement of the lease liability comprise:

fixed lease payments (including in-substance fixed payments), less any lease incentives;


The lease liability is subsequently measured by increasing the carrying amount to reflect interest on the lease liability (using the effective interest method) and by reducing the carrying amount to reflect the lease payments made.

The Company did not make any such adjustments during the periods presented.
 
Page 20

 
SCHAEFFLER (UK) LIMITED
 

 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

2.Accounting policies (continued)


2.7
Leases (continued)


The right-of-use assets comprise the initial measurement of the corresponding lease liability, lease payments made at or before the commencement day and any initial direct costs. They are subsequently measured at cost less accumulated depreciation and impairment losses.

Right-of-use assets are depreciated over the shorter period of lease term and useful life of the underlying asset. If a lease transfers ownership of the underlying asset or the cost of the right-of-use asset reflects that the Company expects to exercise a purchase option, the related right-of-use asset is depreciated over the useful life of the underlying asset. The depreciation starts at the commencement date of the lease.

The right-of-use assets are included in the 'Intangible Assets', 'Tangible Fixed Assets' and 'Investment Property' lines, as applicable, in the Statement of financial position.

The Company applies IAS 36 to determine whether a right-of-use asset is impaired and accounts for any identified impairment loss as described in note 2.16.

As a practical expedient, IFRS 16 permits a lessee not to separate non-lease components, and instead account for any lease and associated non-lease components as a single arrangement. The Company has used this practical expedient.

 
2.8

Research and development

In the research phase of an internal project it is not possible to demonstrate that the project will generate future economic benefits and hence all expenditure on research shall be recognised as an expense when it is incurred. Intangible assets are recognised from the development phase of a project if and only if certain specific criteria are met in order to demonstrate the asset will generate probable future economic benefits and that its cost can be reliably measured. The capitalised development costs are subsequently amortised on a straight-line basis over their useful economic lives, which range from 3 to 6 years.
If it is not possible to distinguish between the research phase and the development phase of an internal project, the expenditure is treated as if it were all incurred in the research phase only.

 
2.9

Interest income

Interest income is recognised in profit or loss using the effective interest method.

 
2.10

Finance costs

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

 
2.11

Borrowing costs

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

Page 21

 
SCHAEFFLER (UK) LIMITED
 

 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

2.Accounting policies (continued)

 
2.12

Pensions

       Defined contribution pension plan

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

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

       Defined benefit plans

The Company operates a defined benefit pension scheme which closed to future accrual on 31 December 2009. The net deficit or surplus is calculated by estimating the amount of future benefit that employees have earned in return for their service in the current and prior periods; that benefit is discounted to determine its present value and the fair value of any plan assets are deducted. The Company determined the net interest on the net defined benefit asset for the period by applying the discount rate used to measure the defined benefit obligation at the beginning of the annual period to the net defined benefit asset.

The discount rate is the yield at the balance sheet date on bonds that have a credit rating of at least AA that have maturity dates approximating the terms of the Company's obligations that are denominated in the currency in which the benefits are expected to be paid.

Re-measurements arising from defined benefit plans comprise actuarial gains and losses, the return on plan assets (excluding interest) and the effect of the asset ceiling (if any, excluding interest). The Company recognises them immediately in other comprehensive income and all other expenses related to defined benefit plans in employee benefit expenses in the income statement.

The calculation of the defined benefit obligations is performed by a qualified actuary using the projected unit credit method. When the calculation results in a benefit to the company, the recognised asset is limited to the present value of benefits available in the form of any future refunds from the plan, reductions in future contributions to the plan or on settlement of the plan and takes into account the adverse effect of any minimum funding requirements.

Page 22

 
SCHAEFFLER (UK) LIMITED
 

 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

2.Accounting policies (continued)

 
2.13

Current and deferred taxation

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

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

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

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

 
2.14

Exceptional items

Exceptional items are transactions that fall within the ordinary activities of the Company but are presented separately due to their size or incidence.

 
2.15

Intangible assets

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

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

 The estimated useful lives range as follows:

Software
-
3
years

 
2.16

Tangible fixed assets

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

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

Page 23

 
SCHAEFFLER (UK) LIMITED
 

 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

2.Accounting policies (continued)


2.16
Tangible fixed assets (continued)

Depreciation is charged so as to allocate the cost of assets less their residual value over their estimated useful lives, using the straight-line method.

Depreciation is provided on the following basis:

Freehold property
-
Over 15 to 25 years
Leasehold property
-
Over the term of the lease
Plant and machinery
-
Over 2 to 8 years
Fixtures and fittings
-
Over 2 to 8 years

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

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

 
2.17

Valuation of investments

Investments in subsidiaries are measured at cost less accumulated impairment.

 
2.18

Stocks

Inventories are valued at the lower of cost and net realisable value.
Costs incurred in bringing each product to its present location and condition are determined on a first in first out basis and comprise purchase cost, cost of direct material and labour and a proportion of manufacturing overheads based on normal operating capacity but excluding borrowing costs.
Net realisable value is the estimated selling price in the ordinary course of business, less estimated costs of completion and the estimated costs necessary to make the sale.

 
2.19

Debtors

Short-term debtors are measured at transaction price, less any impairment. Loans receivable are measured initially at fair value, net of transaction costs, and are measured subsequently at amortised cost using the effective interest method, less any impairment.

 
2.20

Cash and cash equivalents

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

 
2.21

Creditors

Creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers.

Creditors are recognised initially at fair value and subsequently measured at amortised cost using the effective interest method.

Page 24

 
SCHAEFFLER (UK) LIMITED
 

 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

2.Accounting policies (continued)

 
2.22

Provisions for liabilities

Provisions are recognised when an event has taken place that gives rise to a legal or constructive obligation, a transfer of economic benefits is probable and a reliable estimate can be made.
Provisions are measured as the best estimate of the amount required to settle the obligation, taking into account the related risks and uncertainties.
 
Increases in provisions are generally charged as an expense to profit or loss.

 
2.23

Financial instruments


The Company recognises financial instruments when it becomes a party to the contractual arrangements of the instrument. Financial instruments are de-recognised when they are discharged or when the contractual terms expire. The Company's accounting policies in respect of financial instruments transactions are explained below:

Financial assets and financial liabilities are initially measured at fair value. 

Financial assets

All recognised financial assets are subsequently measured in their entirety at either fair value or amortised cost, depending on the classification of the financial assets.

Fair value through profit or loss

The Company has certain financial assets which are subsequently measured at fair value at the end of each reporting period, with any fair value gains or losses being recognised in profit or loss to the extent they are not part of a designated hedging relationship. The net gain or loss recognised in profit or loss includes any dividend or interest earned on the financial asset. 

Impairment of financial assets

The Company recognises lifetime expected credit losses (ECL) for trade receivables and amounts due on contracts with customers. The expected credit losses on these financial assets are estimated based on the Company's historical credit loss experience, adjusted for factors that are specific to the debtors, general economic conditions and an assessment of both the current as well as the forecast direction of conditions at the reporting date, including time value of money where appropriate. Lifetime ECL represents the expected credit losses that will result from all possible default events over the expected life of a financial instrument.

Financial liabilities

Fair value through profit or loss

Financial liabilities are classified as at fair value through profit or loss, when the financial liability is held for trading, or is designated as at fair value through profit or loss. This designation may be made if such designation eliminates or significantly reduces a measurement or recognition inconsistency that would otherwise arise, or the financial liability forms part of a group of financial instruments which is managed and its performance is evaluated on a fair value basis, or the financial liability forms part of a contract containing one or more embedded derivatives, and IFRS 9 permits the entire combined contract to be designated as at fair value through profit or loss. Any gains or losses arising on changes in fair value are recognised in profit or loss to the extent that they are not part of a designated hedging relationship.
 
Page 25

 
SCHAEFFLER (UK) LIMITED
 

 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

2.Accounting policies (continued)


2.23
Financial instruments (continued)


At amortised cost

Financial liabilities which are neither contingent consideration of an acquirer in a business combination, held for trading, nor designated as at fair value through profit or loss are subsequently measured at amortised cost using the effective interest method. This is a method of calculating the amortised cost of a financial liability and of allocating interest expense over the relevant period. The effective interest rate is the rate that exactly discounts estimated future cash payments through the expected life of the financial liability, or where appropriate a shorter period, to the amortised cost of a financial liability.


3.


Judgements in applying accounting policies and key sources of estimation uncertainty

The preparation of financial statements in conformity with Adopted Financial Reporting Standard 101, 'Reduced Disclosure Framework' ("FRS 101") requires management to make judgements, estimates and assumptions that affect the application of policies and reported amounts of assets, liabilities, income and expenses. The estimates and associated assumptions are based upon historical experience and various other factors that are believed to be reasonable under the circumstances, the results of which form the basis of making judgements about carrying values of assets and liabilities that are not readily available from other sources. 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 if the revision affects only that period or in the period of revision and future periods if the revision affects both current and future periods.
The most significant accounting estimates in the financial statements are:
Defined benefit scheme (note 26)
The surplus arising in relation to the defined benefit pension scheme has been recognised in full on the balance sheet.  This is based on the Director's assessment that an economic benefit, in the form of a refund, is available at the end of the pension plan's life, once the plan liabilities are settled.

Page 26

 
SCHAEFFLER (UK) LIMITED
 

 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

4.


Turnover

An analysis of turnover by class of business is as follows:


2023
2022
£000
£000

Automotive: Revenue from sale of goods
79,093
79,929

Automotive Aftermarket: Revenue from sale of goods
8,018
9,440

Industrial: Revenue from sale of goods
35,479
32,167

Revenue from other services
5,361
5,328

127,951
126,864


Analysis of turnover by country of destination:

2023
2022
£000
£000

United Kingdom
125,886
121,062

Americas
1,307
2,494

Greater China
388
648

Asia/Pacific
370
2,660

127,951
126,864



5.


Operating profit

The operating profit is stated after charging:

2023
2022
£000
£000

Cost of stocks recognised as an expense
101,897
95,415

Employee expenses
15,158
15,033

Depreciation and amortisation
875
927

Operating lease rentals
462
196

Auditors' remuneration
66
69

Fees payable to the auditor in 2022 related to services provided by the previous auditor.

Page 27

 
SCHAEFFLER (UK) LIMITED
 

 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

6.


Employees

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


2023
2022
£000
£000

Wages and salaries
12,976
12,798

Social security costs
1,329
1,398

Cost of defined contribution scheme
853
836

15,158
15,032


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


        2023
        2022
            No.
            No.







Industrial and technical employees
211
216



Support and administrative employees
100
98



Apprentices and trainees
7
6



Interns and students
10
9

328
329


7.


Directors' remuneration

2023
2022
£000
£000

Directors' emoluments
345
326

Company contributions to defined contribution pension schemes
47
72

392
398


During the year retirement benefits were accruing to 2 directors (2022: 2) in respect of defined contribution pension schemes.

The highest paid director received remuneration of £217,000  (2022: £239,000).

The value of the Company's contributions paid to a defined contribution pension scheme in respect of the highest paid director amounted to £29,000  (2022: £36,000).

Remuneration for one director was borne by another group company.

Page 28

 
SCHAEFFLER (UK) LIMITED
 

 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

8.


Interest receivable

2023
2022
£000
£000


Other finance income
2,193
1,359

Foreign exchange differences
-
106

Interest earned on loans and deposits
38
38

2,231
1,503


9.


Interest payable and similar expenses

2023
2022
£000
£000


Other loan interest payable
1
704

Foreign exchange differences
1,601
154

Interest on lease liabilities
13
8

1,615
866


10.


Taxation


2023
2022
£000
£000

Corporation tax


Current tax on profits for the year
-
844

Adjustments in respect of previous periods
28
64


28
908


Total current tax
28
908

Deferred tax


Origination and reversal of timing differences
244
825

Changes to tax rates
15
262

Adjustments in respect of prior periods
25
(90)

Total deferred tax
284
997


Tax on profit
312
1,905
Page 29

 
SCHAEFFLER (UK) LIMITED
 

 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
 
10.Taxation (continued)


Factors affecting tax charge for the year

The tax assessed for both 2022 and 2023 is higher than the standard rate of corporation tax in the UK of 23.52% (2022: 19%). The differences are explained below:

2023
2022
£000
£000


Profit on ordinary activities before tax
943
8,755


Profit on ordinary activities multiplied by standard rate of corporation tax in the UK of 23.52% (2022: 19%)
222
1,663

Effects of:


Expenses not deductible for tax purposes, other than goodwill amortisation and impairment
31
8

Adjustments to tax charge in respect of prior periods
53
(26)

Non-taxable income
(9)
(2)

Adjustments to tax charge for changes in rate
15
262

Total tax charge for the year
312
1,905


Factors that may affect future tax charges

There were no factors that may affect future tax charges.


11.


Exceptional items

2023
2022
£000
£000


(Losses)/Gains from disposal of intangible and tangible fixed assets
-
296

Non-operating (expenses)/income
-
1,499

-
1,795

The non-operating exceptional item in 2022 relates to a past service credit arising on the change to various pension factors of the defined benefit scheme.

Page 30

 
SCHAEFFLER (UK) LIMITED
 

 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

12.


Intangible assets




Computer software

£000



Cost


At 1 January 2023
1,510


Transfers between classes
(100)



At 31 December 2023

1,410



Amortisation


At 1 January 2023
1,396


Charge for the year on owned assets
1



At 31 December 2023

1,397



Net book value



At 31 December 2023
13



At 31 December 2022
115




Page 31

 


 
SCHAEFFLER (UK) LIMITED


 

 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023


13.


Tangible fixed assets






Land
Freehold property
Leasehold property
Plant and machinery
Fixtures and fittings
Construction in progress
Total

£000
£000
£000
£000
£000
£000
£000



Cost or valuation


At 1 January 2023
1,926
11,997
939
16,187
8,267
538
39,854


Additions
-
-
-
542
167
210
919


Disposals
-
(9)
-
(326)
(9)
-
(344)


Transfers between classes
-
-
-
474
157
(530)
101



At 31 December 2023

1,926
11,988
939
16,877
8,582
218
40,530



Depreciation


At 1 January 2023
-
11,066
311
15,184
7,728
-
34,289


Charge for the year on owned assets
-
92
93
392
182
-
759


Charge for the year on right-of-use assets
-
-
-
115
-
-
115


Disposals
-
(8)
-
(319)
(9)
-
(336)



At 31 December 2023

-
11,150
404
15,372
7,901
-
34,827



Net book value



At 31 December 2023
1,926
838
535
1,505
681
218
5,703



At 31 December 2022
1,926
931
628
1,003
539
538
5,565

Page 32

 
SCHAEFFLER (UK) LIMITED
 

 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

           13.Tangible fixed assets (continued)


The net book value of owned and leased assets included as "Tangible fixed assets" in the Statement of financial position is as follows:

2023
2022
£000
£000


Tangible fixed assets owned
5,426
5,336

Right-of-use tangible fixed assets
277
229

5,703
5,565

Information about right-of-use assets is summarised below:

Net book value

2023
2022
£000
£000

Plant and machinery
277
229

277
229

Depreciation charge for the year ended

2023
2022
£000
£000

Plant and machinery
115
119

115
119


Additions to right-of-use assets

2023
2022
£000
£000

Additions to right-of-use assets
163
98

Page 33

 
SCHAEFFLER (UK) LIMITED
 

 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

14.


Fixed asset investments





Investments in subsidiary companies

£000



Cost or valuation


At 1 January 2023
10



At 31 December 2023
10





Subsidiary undertaking


The following was a subsidiary undertaking of the Company:

Name

Registered office

Principal activity

Class of shares

Holding

Schaeffler Automotive Aftermarket (UK) Limited
Holme Lacy Road, Rotherwas, Hereford, HR2 6BQ
The distribution of vehicle components to the after sales market.
Ordinary
100%


15.


Stocks

2023
2022
£000
£000

Raw materials and consumables
5,550
5,941

Work in progress (goods to be sold)
2,115
2,380

Finished goods and goods for resale
1,901
1,996

Finished goods - merchandise
7
8

9,573
10,325


At 31 December 2023, the stock provision amounted to £763,162 (2022: £829,482). Of this provision, £549,868 (2022: £376,193) relates to raw materials items.


2023
2022
£000
£000



At 1 January
829
1,151

Decrease in provision
(66)
(322)

At 31 December
763
829

Page 34

 
SCHAEFFLER (UK) LIMITED
 

 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

16.


Debtors

2023
2022
£000
£000


Trade debtors
15,341
15,465

Intercompany receivables - trading
25,889
28,568

Other debtors
1,024
586

Prepayments and accrued income
533
414

Tax recoverable
391
1,477

Foreign exchange forward contract
9
-

43,187
46,510


Intercompany receivables are not interest bearing and are payable on demand.
Movements in the provision for impairment of trade and other receivables were as follows:


2023
2022
£000
£000



At 1 January
38
88

Increase/(decrease) in provision
6
(50)

44
38


17.


Cash and cash equivalents

2023
2022
£000
£000

Cash at bank and in hand
1,343
-

1,343
-


Page 35

 
SCHAEFFLER (UK) LIMITED
 

 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

18.


Creditors: Amounts falling due within one year

2023
2022
£000
£000

Other loans
36,000
40,164

Payable to trade suppliers
4,077
4,893

Other creditors
426
468

Other taxation and social security
2,065
889

Accruals and deferred income
2,964
4,156

Refund liabilities
708
1,591

Intercompany payables - trade
5,550
4,357

Intercompany payables - non-trading
3,257
-

Lease liabilities
169
201

Foreign exchange forward contract
-
142

Contract liabilities
-
203

55,216
57,064



19.


Creditors: Amounts falling due after more than one year

2023
2022
£000
£000

Lease liabilities
659
701

Post employment retirement benefit liabilities
321
327

980
1,028



20.


Loans


Analysis of the maturity of loans is given below:


2023
2022
£000
£000

Amounts falling due within one year

Other loans
36,000
40,164

36,000
40,164


The other loans figure is comprised of a loan from Schaeffler AG.
As at 31 December 2023, the loan facility was due for repayment in instalments by October 2024. Following the year end the final repayment date was extended to December 2025. The loans and borrowings are interest bearing and during 2023 the average interest rate was 4.71%. The total facility available at 31 December 2023 was £60,000,000.

Page 36

 
SCHAEFFLER (UK) LIMITED
 

 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

21.

Leases

Company as a lessee


Lease liabilities are due as follows:

2023
2022
£000
£000

Not later than one year
169
201

Between one year and five years
659
701

828
902


The following amounts in respect of leases, where the Company is a lessee, have been recognised in profit or loss:

2023
2022
£000
£000

Interest expense on lease liabilities
13
8

Variable lease payments not included in the measurement of lease liabilities
-
14


22.


Financial instruments

2023
2022
£000
£000

Financial assets


Derivative financial instruments measured at fair value through profit or loss
9
-


Financial liabilities


Derivative financial instruments measured at fair value through profit or loss
-
142

The Company's main exposure to risk is through foreign currency exchange rates on its currency transaction flows with customers and suppliers. It mitigates the risk by natural hedging and the use of forward contracts for up to twelve months ahead.
Forward contracts are used by the Company to convert surplus foreign currencies from operations into Sterling. This reduces the Company's exposure to foreign currency risk, by allowing it to fix future foreign currency exchange rates.
Class of financial instruments measured at fair value  Valuation method
Forward exchange contracts     The fair values of foreign currency forward
         contracts have been measured by reference            to the fair value of the instruments, as             provided by group counterparties.

Page 37

 
SCHAEFFLER (UK) LIMITED
 

 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

23.


Deferred taxation




2023
2022


£000

£000






At beginning of year
9,742
17,343


Charged to profit or loss
284
996


Credited to other comprehensive income
(2,269)
(8,597)



At end of year
7,757
9,742

The provision for deferred taxation is made up as follows:

2023
2022
£000
£000


Accelerated capital allowances
339
96

Tax losses carried forward
(378)
-

Pension surplus - defined benefit
8,149
9,994

Intercompany foreign exchange contract
2
3

Provisions
(325)
(325)

Pension - defined contribution
(30)
(26)

7,757
9,742

2023
2022
£000
£000

Comprising:


Asset - due within one year
(733)
(351)

Liability
8,490
10,093

7,757
9,742


24.


Share capital

2023
2022
£000
£000
Allotted, called up and fully paid



10,000 (2022: 10,000) Ordinary shares of £100.00 each
1,000
1,000

All issued share capital is classified as equity. The holders of ordinary shares are entitled to receive dividends as declared from time to time and are entitled to one vote per share at meetings of the Company.
The authorised share capital for the current and previous year is 10,000 ordinary shares of £100 each.


Page 38

 
SCHAEFFLER (UK) LIMITED
 

 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

25.


Reserves

Other reserves

Other reserves comprise £75,265,163 (2022: £75,265,163) merger reserve due to the transfer of the trade and assets of the three subsidiaries, subsequent dividend income from those subsidiaries and subsequent investment write down to the corresponding share capital at cost.

Page 39

 
SCHAEFFLER (UK) LIMITED
 

 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

26.


Pension commitments

The Company operated a funded final salary pension scheme providing benefits based on final pensionable pay. On 1 December 2005, the scheme merged with other schemes for companies under common control to form Schaeffler (UK) Pension Scheme. The scheme provides benefits based on final pensionable pay. The assets of the scheme are held separately from those of the Company and are invested in managed funds.
At 31 December 2009, the defined benefit pension scheme for the UK Group was closed to all active members. The members of the scheme transferred to a stakeholder scheme and their entitlement under the defined benefit scheme was frozen.
During the year to 31 December 2019, liabilities from a former group company were transferred to Schaeffler (UK) Limited by way of an apportionment arrangement agreed between the parties and the scheme.
Part of the liabilities transferred are in an unfunded arrangement which is detailed in the accounts. At the end of year to 31 December 2023 the unfunded arrangement had a balance of £321,000 (2022: £327,000) in respect of pension benefits due but not funded for in an approved arrangement. The disclosures below exclude these liabilities.
The Company also operates a defined contribution scheme for which contributions payable are charged to the income statement. In the year ended 31 December 2023, there is a charge in the income statement in respect of the defined contribution scheme of £853,089 (2022: £836,370).
Contributions outstanding for the schemes amounted to £119,411 at the year-end (2022: £119,917). 
IAS19: Employee Benefit
The disclosures required under IAS19 Employee Benefits have been calculated by the qualified independent actuary based on the results of the formal actuarial valuation at 31 December 2020.
The valuation resulted in a surplus of £53.3m at 31 December 2020, comprising Technical Provisions of £202.3m and Scheme assets of £255.6m. As the Scheme is in surplus no deficit reduction contributions are required.
The next triennial valuation on a technical provision basis, effective as at 31 December 2023 is due later in 2024.

Page 40

 
SCHAEFFLER (UK) LIMITED
 

 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
 
26.Pension commitments (continued)



Reconciliation of present value of plan liabilities:


2023
2022
£000
£000

Reconciliation of present value of plan liabilities


At the beginning of the year
119,222
194,098

Current service cost
494
-

Interest expense
5,584
3,611

Past service cost
-
(1,978)

Changes in demographic assumptions
(2,358)
(343)

Changes in experience adjustments
2,860
4,935

Change in financial assumptions
1,960
(75,060)

Planned amendment
-
(900)

Insured element
-
700

Benefits paid
(6,355)
(5,841)

At the end of the year
121,407
119,222



Reconciliation of present value of plan assets:


2023
2022
£000
£000


At the beginning of the year
159,197
265,602

Interest income
7,792
4,970

Administrative expenses paid out on plan assets
-
(556)

Return on plan assets excluding interest income
(6,632)
(104,778)

Planned amendment
-
(900)

Insured element
-
700

Benefits paid
(6,355)
(5,841)

At the end of the year
154,002
159,197

Page 41

 
SCHAEFFLER (UK) LIMITED
 

 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
 
26.Pension commitments (continued)


Composition of plan assets:


2023
2022
£000
£000


Cash and cash equivalents
2,148
17,159

Insurance contract
500
700

Property
14,029
24,133

Equities
-
6,880

Corporate bonds
9,720
9,136

Liquidity fund
46,773
18,643

Hedge fund
22,285
21,176

Liability driven investment (LDI) portfolios
58,547
61,370

Total plan assets
154,002
159,197

As the value of the Scheme approaches full solvency, it is adopting a de-risking plan by moving away from return-seeking assets towards a consolidated in the LDI fixed interest fund.

2023
2022
£000
£000


Fair value of plan assets
154,002
159,197

Present value of plan liabilities
(121,407)
(119,222)

Net pension scheme asset
32,595
39,975

The investment strategy is based on a Liability Driven Investment ("LDI") approach whereby the change in value of the plan assets is designed to broadly mirror the change in value of the defined benefit obligation.


The amounts recognised in profit or loss are as follows:

2023
2022
£000
£000


Administrative expenses paid out on plan assets
(494)
(556)

Finance income
2,208
1,359

Past service credit - Exceptional
-
1,978

Total
1,714
2,781



The cumulative amount of actuarial losses recognised in the Statement of comprehensive income was £1,031,163 (2022: gains of £7,991,337).





Page 42

 
SCHAEFFLER (UK) LIMITED
 

 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
 
26.Pension commitments (continued)


Principal actuarial assumptions at the reporting date (expressed as weighted averages):

2023
2022
%
%
Discount rate


4.6

4.8
 
Future pension increases


3.0

3.1
 
Inflation assumption (RPI)


3.1

3.2
 
Inflation assumption (CPI)


2.45

2.55
 

The mortality assumptions at 31 December 2023 were based on 108% of the S3PxA tables projected using CMI 2022 and 1.25% long term trend rate.






Sensitivity analysis

The calculation of the defined benefit obligation is sensitive to the assumptions set out above. The following  table summarises how the defined benefit obligation at the end of the reporting period would have increased / (decreased) as a result of a change in the respective assumptions by one percent.
  
            2023  2022
            £'m  £'m
Discount rate increase (+1.00%)        (14.75) (16.43)
Discount rate decrease (-1.00%)        18.18  18.99
Future pension increase (+1.00%)       11.38  8.86
Future pension decrease (-1.00%)       (9.82)  (9.17)
In valuing the liabilities of the pension fund at 31 December 2023, mortality assumptions have been made as indicated above.
Funding
The Company expects to pay no contributions to its defined benefit plans in 2023. The weighted average duration of the defined benefit obligation at the end of the reporting period is 12.78 years (2022: 15.52 years).
The surplus arising in relation to the defined benefit pension scheme has been recognised in full on the balance sheet.  This is based on the Director's assessment that an economic benefit, in the form of a refund, is available at the end of the pension plan's life, once the plan liabilities are settled.
Methodology
As at 31 December 2023 and 31 December 2022, the methodology for calculating the RN inflation assumption used the full RPI inflation yield curve, taking account of the profile of the scheme's liabilities.

Page 43

 
SCHAEFFLER (UK) LIMITED
 

 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

26.


Pension commitments (continued)

CPI
For CPI, the methodology has used the assumption for RPI inflation with a deduction of 0.65% per annum to reflect the expected long-term difference between RPI and CPI. In the previous year the same assumptions and rate were used.


27.


Related party transactions

As a wholly-owned subsidiary undertaking with 100% of voting rights controlled within the group, the Company has taken advantage of the exemption under IAS 24, 'Related party disclosures', not to disclose transactions with group companies and key management compensation. The consolidated financial statements of Schaeffler AG, in which the company is included for the year ended 31 December 2023, are publicly available (note 28).


28.


Controlling party

Schaeffler (UK) Limited and its subsidiaries are part of the Schaeffler Group of companies.
The largest group for which consolidated financial statements are publicly available is the group headed by Schaeffler AG. 
The ultimate parent of the group is INA-Holding Schaeffler GmbH & Co.KG, Industriestraße 1-3, Herzogenaurach, 91074, Germany, registered in Germany.
The ultimate controlling party is Frau M-E Schaeffler-Thumann and Herr G.F.W. Schaeffler.

Page 44