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Registered number: 00521832









Krones UK Limited









Financial statements

For the Year Ended 31 December 2023

 
Krones UK Limited
 
 
 
Company Information


 
Directors
A J Wilson 
V Bridge 
M Schuller (resigned 31 December 2023)
K Holler (resigned 31 December 2023)
T Knoll (appointed 1 January 2024)




Company secretary
L McKee



Registered number
00521832



Registered office
Westregen House
Great Bank Road

Wingates Industrial Park

Westhoughton

Bolton

BL5 3XB




Independent auditors
Hurst Accountants Limited
Chartered Accountants & Statutory Auditors

Lancashire Gate

21 Tiviot Dale

Stockport

SK1 1TD





 
Krones UK Limited
 
 
 
Contents



Page
Strategic Report
 
1 - 4
Directors' Report
 
5 - 6
Independent Auditors' Report
 
7 - 10
Statement of Profit or Loss and Other Comprehensive Income
 
11
Statement of Financial Position
 
12
Statement of Changes in Equity
 
13
Statement of Cash Flows
 
14
Notes to the Financial Statements
 
15 - 41

 
Krones UK Limited
 
 
 
Strategic Report
For the Year Ended 31 December 2023

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

Business model, review and results
 
Krones UK Limited ("Krones UK") is a subsidiary of Krones AG and is responsible for the sale and servicing of Krones Group machinery and lifecycle services in the UK and Ireland. We have been established for more than 70 years in the UK, we are proud to be a responsible business, that builds strong relationships with our customers and takes care of our employees.
Krones Group are recognised as the global market leader in its sector. Krones AG continue developing innovative products and services and this holds huge opportunities for our aftersales business. This involves substantial investment in the digitalisation of beverage plants. Krones UK seeks to add value by providing customer support to UK and Irish customers, acting as the local face of Krones, effectively responding to customer needs as they arise. Our experienced local team install and commission major contracts for blue chip companies and SME's. Employing over 125 people, we have a highly skilled team of Project Managers, Engineers and support staff who serve our customer base in the UK and Ireland. The Group and Krones UK will continue to invest in employee training and development, because our workforce is the foundation of our business.
The results for the year are set out on page 11. Sales revenue was up on 2022 result by £6.55m, mainly driven by after-sales business. However, 2023 profit before tax was £0.02m lower than 2022's results due to increases in gross profit being matched by higher administration expenses. Overall, the 2023 order intake figure of €169m was up (2022: €140m). Order intake is the full value of the order recognised at the point the sales order is raised. We are actively focusing on selling our full product portfolio referred to as "The Network of Krones".
Krones Group has developed a future-driven new target picture under the slogan “Solutions beyond tomorrow” which encompasses Krones’ vision and mission, corporate culture and strategic focus. It provides Krones with support and orientation on the road to a successful future and helps us to make the most of growth opportunities in our markets.
 
Our target picture is the basis for the development of future-ready, sustainable products and services with a clear strategic focus on sustainability, service quality and digitalisation to align our three business segments, Filling and Packaging Technology, Process Technology and Intralogistics.
Operating profit totals 8.42% of turnover, a decrease of 2.08 ppts from the previous year (2022: operating profit of 10.50% of turnover).

Key performance indicators
 
Our key financial metrics for the financial year are as follows:

Revenue £63.8m (2022: £57.3m)
Gross profit £19.0m (2022: £17.5m)
Profit before tax £6.0m (2022: £6.1m)
 

Key non-financial indicators include the monitoring of our employees' health and safety and employees' engagement. There have been positive trends in these KPI areas due to increased investment in Health & Safety training and engagement activities during the year.

Page 1

 
Krones UK Limited
 
 
 
Strategic Report (continued)
For the Year Ended 31 December 2023

Principal risks and uncertainties
 
Krones ended the 2023 financial year with a large order backlog. This increases planning certainty and has a positive overall effect on the risk situation. As a provider of products for the food and beverages industries, Krones UK and the group headed by Krones AG is less dependent on economic cycles than other machinery manufacturers. At the same time, various uncertainties mean that the business environment remains challenging for Krones. These include geopolitical risks in Europe and other parts of the world, and also high inflation and interest rates. Material shortages and problems in global supply chains remain a source of uncertainty.
Krones is exposed to industry-specific risks, primarily through the development of the global packaging market and the actions of competitors. The competitive environment could intensify if competitors of Krones attempt to win orders by offering lower prices. Krones addresses the risk of loss of market share by further extending our technology leadership. Krones' strong focus on service also sets the Company apart from competitors.
All of Krones' material business processes are based on functioning IT systems. The risks here are failure or malfunction of or unauthorised access to critical systems. Such events could result in the loss or mis-use of important and confidential data. There are also serious cybersecurity risks; computer crime is frequently based on professional international structures, which makes averting and combating it a major challenge. Krones uses internationally recognised IT security measures to protect against risks relating to cyber-crime and other IT risks. 
Financial instruments
The Company uses various financial instruments; historically these include loans to and from Krones AG, cash and items, such as trade receivables and trade payables that arise directly from its operations. In addition, there are assets that have been leased. The main purpose of these financial instruments is to raise finance for the Company's operations and manage its working capital requirements.
The main risks arising from the Company's financial instruments are exchange rate risk, liquidity risk and credit risk. The Directors review and agree policies for managing each of these risks and they are summarised below.
Exchange rate risk
The Company has substantial loans with Krones AG based in EUR currency, and can also contract with customers in EUR. A significant movement in EUR:GBP rate can lead to exchange gains or losses accumulating in the Company's accounts. The Company manages this risk by carefully monitoring exchange rate movements and considering hedging where appropriate.
Liquidity and cash flow risk 
The Company is part of a cash pooling arrangement with Krones AG and is therefore dependent upon access to the Group funds to enable it to meet its liabilities as they fall due.
Credit risk
The Company's principal financial assets are trade receivables, which are subject to credit risk, and are concentrated to a limited number of customers at any point in time. Generally, the Company's major customers have excellent credit worthiness, but ongoing monitoring of trade receivables and the use of external credit agency data is used to manage this risk.

Page 2

 
Krones UK Limited
 
 
 
Strategic Report (continued)
For the Year Ended 31 December 2023

Going concern
 
The Company is robust and has a strong financial position with net assets totalling £19.1m at 31 December 2023 and achieved Profits after tax totalling £4.6m in 2023. The Company meets its working capital requirements through its cash balances generated from operations. 
Based on the Company's forecasts and projections, the directors are satisfied that the Company has sufficient facilities to trade through the next twelve months. They believe it is appropriate, therefore, to prepare the financial statements to 31 December 2023 on a going concern basis.
Directors' statement of compliance with duty to promote the success of the Company
The Directors of Krones UK Limited have acted in accordance with their duties codified in law, which include their duty to act in the way in which they consider, in good faith, would be most likely to promote the success of the Company, having regard to the stakeholders and matters set out in section 172(1) of the Companies Act 2006. In doing so, the Directors' have considered (amongst other matters):
 i.    the likely consequences of any decision in the long term,
 ii.   the interests of the Company's employees,
 iii.  the need to foster the Company's business relationships with suppliers, customers and others,
 iv.  the impact of the Company's operations on the community and the environment,
 v.   the desirability of the Company maintaining a reputation for high standards of business conduct, and
 vi.  the need to act fairly as between members of the Company
In accordance with our parent company Krones AG, we share common values that inform and guide our behaviour so we achieve our goals in the right way. The Krones Code of Conduct incorporates our corporate values, laws and ethics, information handling and social responsibility fostering business relationships with suppliers, customers and other stakeholders. Each year the Directors undertake an in depth review of the Company's strategy. Long term business planning and key strategic decisions are undertaken in line with the strategy agreed by the Board. The Company's contracts with its customers can be multi year agreements which necessitate a long term view over the impact of any commercial and operational decisions. When considering the impact of the Company on its wider stakeholders, the Directors discharge their duty in the following way:
People
The Company is committed to being a responsible employer. All our employees must adhere to Krones Code of Conduct and undertakes mandatory training when joining the Company. Our people are fundamental to the long term success of the Company and the Directors recognise we have loyal and committed employees. To meet our customer demands we need an adaptive and flexible workforce whose skill base continually evolves and the Directors are dedicated to ensuring they are provided with the skills and opportunities to succeed and develop.
Business relationships
The Company has a range of local and international suppliers and over the years we have built strong working relationships. All our suppliers must comply with out supplier code of conduct. The code of conduct ensures our business partners apply principles in the areas of human rights, fair working conditions, environmental protection and the fight against corruption.
Our suppliers are fundamental to the quality of our products and services and they must meet the high standards of conduct we set ourselves. We continue to work with our suppliers to deliver a high-level service to our loyal consumer base.
Krones continues to develop innovative solutions for our customer base and offer a wide range of products "Network of Krones" to meet their demand.


 
Page 3

 
Krones UK Limited
 
 
 
Strategic Report (continued)
For the Year Ended 31 December 2023

Streamlined energy and carbon reporting (SECR)
The following SECR disclosures presents our carbon footprint within the United Kingdom across scope 1 and 2 emissions. We have followed the 2019 HM Government's Environmental Reporting Guidelines and used the GHD Reporting Protocol - Corporate Standard and also used the 2023 UK Government's Conversion Factors for Company reporting. The chosen intensity measurement ratio is total gross emissions in metric tonnes CO2e per £1m revenue.
Energy Consumption (kWh)                 2023             2022
Natural Gas          157,559          171,345
Electricity           287,600     286,277
Scope 1 emissions (in tonnes of CO2 equivalent)
Natural Gas         29    31
Vehicle Emissions                                      205    206
 
Scope 2 emissions (in tonnes of CO2 equivalent)
Electricity                                  60        55
Total emissions of Carbon Dioxide (in tonnes of CO2 equivalent) 294  292
Intensity ratio tonnes CO2 per £m sales revenue    4.6   5.1         
The company has taken measures to improve energy efficiency and reduce energy consumption through various projects including:
   - Installation of energy efficient lighting across the factory
   - Improved steam boiler controls, load management and burner optimisation                        
   - Installation of energy efficient motor drives across the factory
   - Internal heating system changed to air conditioning controlled by a building management system
   - Waste air recycling heat exchanger installed to recover heat energy from building air exhaust and incoming air
   - The introduction of hybrid vehicles and electric vehicles to the car fleet
 

The community and wider environment
Krones is committed to product development that offers solutions that are continually more efficient and environmentally friendly. The UK subsidiary operates out of an office in Bolton, with no adverse impact on the community and environment.
Both our supplier code of conduct and employee code of conduct can be accessed on our website 
www.krones.com/en/ company/responsibility/compliance.php
Our sustainability reports can be accessed on our website:
www.krones.com/en/ company/responsibility/sustainability.php


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


A J Wilson
Director

Date: 16 February 2024

Page 4

 
Krones 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.

Directors' responsibilities statement

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

Company law requires the directors to prepare financial statements for each financial year. Under that law they have elected to prepare the financial statements in accordance with International Financial Reporting Standards (IFRS) as adopted by the UK.

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 the financial statements, the directors are required to:

select suitable accounting policies and then apply them consistently;

make judgments and estimates that are reasonable and prudent;

state whether they have been prepared in accordance with IFRS as adopted by the UK, subject to any material departures disclosed and explained in the financial statements;

assess the Company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern; and

use the going concern basis of accounting unless they either intend to liquidate the Company or to cease operations, or have no realistic alternative but to do so.

The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the Company's transactions and disclose with reasonable accuracy at any time the financial position of the Company and enable them to ensure that the financial statements comply with the Companies Act 2006. They are responsible for such internal control as they determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error, and have general responsibility for taking such steps as are reasonably open to them to safeguard the assets of the Company and to prevent and detect fraud and other irregularities.

Principal activity

Krones offers machines and systems for bottling and packaging and for beverage production. Digitalisation and Intralogistics solutions complete our product portfolio.

Results and dividends

The profit for the year, after taxation, amounted to £4,589,000 (2022: £4,875,000).

The directors declared and paid a dividend of £4,400,000 for 2023 (2022: £3,400,000). As in the prior year, they do not recommend the payment of an ordinary final dividend.

Page 5

 
Krones UK Limited
 
 
 
Directors' Report (continued)
For the Year Ended 31 December 2023

Directors

The directors who served during the year were:

A J Wilson 
V Bridge 
M Schuller (resigned 31 December 2023)
K Holler (resigned 31 December 2023)

Future developments

Krones continues to develop our product portfolio to continually support the ongoing needs of our market. Krones UK have implemented additional support for our customers via a regional structure, with key members of our team residing close to our customers in each region. Our regional support is segmented into Scotland and Northern Ireland, Northern England, Central Region, and Southern England / Ireland. Our customers increasingly look to Krones for long term Service Level agreements, and this is an area that is developing successfully with many of our larger customers. This area is benefiting from further investment to proactively monitor the performance of our customers' plant via digital means, enabling early warning and optimum planning for maintenance interventions.

Financial instruments

The use of Financial Instruments by the Company are disclosed in the Strategic Report.

Disclosure of information to auditors

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

Post year end events

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

Auditors

The auditorsHurst Accountants 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.
 
A J Wilson
Director

Date: 16 February 2024
Page 6

 
Krones UK Limited
 
 
 
Independent Auditors' Report to the Members of Krones UK Limited
 

Opinion


We have audited the financial statements of Krones UK Limited for the year ended 31 December 2023 which comprise the Statement of Profit or Loss and Other Comprehensive Incomethe Statement of Financial Positionthe Statement of Cash Flowsthe Statement of Changes in Equity and the related notes, including a summary of significant accounting policies set out on pages 16 - 23. The financial reporting framework that has been applied in their preparation is applicable law and International Financial Reporting Standards (IFRSs) as adopted by the United Kingdom.

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 IFRSs as adopted by the United Kingdom; 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.





Page 7

 
Krones UK Limited
 
 
 
Independent Auditors' Report to the Members of Krones UK Limited (continued)


Other information


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

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 on page 5, 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 8

 
Krones UK Limited
 
 
 
Independent Auditors' Report to the Members of Krones 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:

Identifying and assessing potential risks related to irregularities
In identifying and assessing the risks of material misstatement in respect of irregularities, including fraud and non-compliance with laws and regulations, we considered the following:
• The nature of the industry and sector in which the company operates; the control environment and business     performance including key drivers for directors' remuneration, bonus levels and performance targets.
• The outcome of enquiries of local management and parent company management, including whether management    was aware of any instances of non-compliance with laws and regulations, and whether management had knowledge   of any actual, suspected, or alleged fraud. 
• Supporting documentation relating to the Company's policies and procedures for:
    - Identifying, evaluating, and complying with laws and regulations
    - Detecting and responding to the risks of fraud
• The internal controls established to mitigate risks related to fraud or non-compliance with laws and regulations.
• The outcome of discussions amongst the engagement team regarding how and where fraud might occur in the    financial statements and any potential indicators of fraud.
• The legal and regulatory framework in which the Company operates, particularly those laws and regulations which    have a direct effect on the financial statements, such as the Companies Act 2006, pensions and tax legislation, or    which had a fundamental effect on the operations of the Company, including General Data Protection requirements,   and Anti-bribery and Corruption.
A
udit response to risks identified
Our procedures to respond to the risks identified included the following:
• Reviewing the financial statements disclosures and testing to supporting documentation to assess compliance with    the provisions of those relevant laws and regulations which have a direct effect on the financial statements.
• Discussions with management, including consideration of known or suspected instances of non-compliance with laws  and regulations and fraud.
• Evaluation of the operating effectiveness of management’s controls designed to prevent and detect irregularities.
• Enquiring of management about any actual and potential litigation and claims.
• Performing analytical procedures to identify any unusual or unexpected relationships which may indicate risks of    material misstatement due to fraud.
 
Page 9

 
Krones UK Limited
 
 
 
Independent Auditors' Report to the Members of Krones UK Limited (continued)


We have also considered the risk of fraud through management override of controls by:
• Testing the appropriateness of journal entries and other adjustments. We have used data analytics software to    identify accounting transactions which may pose a heightened risk of material misstatement, whether due to fraud or   error.
• Challenging assumptions made by management in their significant accounting estimates, and assessing whether the    judgements made in making accounting estimates are indicative of a potential bias; and
• Evaluating the business rationale of any significant transactions that are unusual or outside the normal course of    business.
We also communicated relevant identified laws and regulations and potential fraud risks to all engagement team members and remained alert to any indications of fraud or non-compliance with laws and regulations throughout the audit.
There are inherent limitations in the audit procedures described above, and the further removed non-compliance with laws and regulations are from the events and transactions reflected in the financial statements, the less likely we would become aware of them.  Also, the risk of not detecting a material misstatement due to fraud is higher than the risk of not detecting one resulting from error, as fraud may involve deliberate concealment by, for example, forgery or intentional misrepresentations, or through collusion.

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.

 
 
Anthony Woodings (Senior Statutory Auditor)
for and on behalf of
Hurst Accountants Limited
Chartered Accountants & Statutory Auditors
Lancashire Gate
21 Tiviot Dale
Stockport
SK1 1TD

16 February 2024
Page 10

 
Krones UK Limited
 
 
 
Statement of Profit or Loss and Other Comprehensive Income
For the Year Ended 31 December 2023


2023
2022
Note
£000
£000

  

Revenue
 6 
63,831
57,280

Cost of sales
  
(44,785)
(39,821)

Gross profit
  
19,046
17,459

Administrative expenses
  
(13,670)
(11,442)

Profit from operations
  
5,376
6,017

Finance income
 11 
682
51

Finance expense
 11 
(16)
(11)

Profit before tax
  
6,042
6,057

Tax expense
 12 
(1,453)
(1,182)

Profit for the year
  
4,589
4,875


Other comprehensive income
  
-
-

Total comprehensive income
  
4,589
4,875

The notes on pages 16 to 41 form part of these financial statements.

Page 11

 
Krones UK Limited
Registered number: 00521832
 
 
Statement of Financial Position
As at 31 December 2023


2023
2022
Note
£000
£000

Assets

Non-current assets
  

Property, plant and equipment
 13 
4,580
4,709

Current assets
  

Inventories
 14 
353
680

Trade and other receivables
 15 
39,230
32,285

Cash and cash equivalents
 24 
1,716
2,522

Total current assets
  
41,299
35,487

Total assets

  

45,879
40,196

Liabilities

Non-current liabilities
  

Loans and borrowings
 17 
343
334

Deferred tax liability
 12 
100
96

Total non-current liabilities
  
443
430

Current liabilities
  

Trade and other liabilities
 16 
25,994
20,539

Loans and borrowings
 17 
357
331

Total current liabilities
  
26,351
20,870

Total liabilities
  
26,794
21,300

Net assets
  
19,085
18,896


Issued capital and reserves
 19 

Share capital
 18 
15
15

Retained earnings
  
19,070
18,881

TOTAL EQUITY
  
19,085
18,896

The financial statements on pages 11 to 41 were approved and authorised for issue by the board of directors on 16 February 2024 and were signed on its behalf by:

A J Wilson
Director

Page 12

 
Krones UK Limited

 
 
Statement of Changes in Equity
For the Year Ended 31 December 2023



Share capital
Retained earnings
Total equity


£000
£000
£000

At 1 January 2022
15
17,406
17,421

Comprehensive income for the year


Profit for the year
-
4,875
4,875

Total comprehensive income for the year
-
4,875
4,875

Contributions by and distributions to owners




Dividends
-
(3,400)
(3,400)

Total contributions by and distributions to owners
-
(3,400)
(3,400)

At 31 December 2022
15
18,881
18,896

At 1 January 2023
15
18,881
18,896

Comprehensive income for the year


Profit for the year
-
4,589
4,589

Total comprehensive income for the year
-
4,589
4,589

Contributions by and distributions to owners




Dividends
-
(4,400)
(4,400)

Total contributions by and distributions to owners
-
(4,400)
(4,400)

At 31 December 2023
15
19,070
19,085

The notes on pages 16 to 41 form part of these financial statements.

Page 13

 
Krones UK Limited

 
 
Statement of Cash Flows (continued)
For the Year Ended 31 December 2023


2023
2022
Note
£000
£000

Cash flows from operating activities
  

Profit for the year
  
4,589
4,875

Adjustments for
  

Depreciation of property, plant and equipment
 13 
241
219

Depreciation of right-of-use assets
 13 
445
385

Finance income
  
(682)
(51)

Finance expense
  
16
11

Income tax expense
 12 
1,453
1,182

  
6,062
6,621

Movements in working capital:
  

Increase in trade and other receivables
  
(6,945)
(8,976)

Decrease in inventories
  
327
576

Increase in trade and other payables
  
5,232
2,886

Cash generated from operations
  
4,676
1,107

  

Income taxes paid
  
(1,224)
(1,045)

Net cash generated from operating activities

  
3,452
62

Cash flows from investing activities
  

Purchases of property, plant and equipment
 13 
(106)
(100)

Interest received
  
680
51

Net cash from/(used in) investing activities

  
574
(49)

Cash flows from financing activities
  

Interest paid on lease liabilities
  
(16)
(11)

Dividends paid to the holders of the parent
  
(4,400)
(3,400)

Payment of lease liabilities
 20 
(416)
(463)

Net cash used in financing activities
  
(4,832)
(3,874)

Net decrease in cash and cash equivalents
  
(806)
(3,861)

  

Cash and cash equivalents at the beginning of year
  
2,522
6,383

Cash and cash equivalents at the end of the year
 24 
1,716
2,522

Page 14

 
Krones UK Limited
 
 
 
Notes to the Financial Statements
For the Year Ended 31 December 2023

1.


Reporting entity

Krones UK Limited (the 'Company') is a limited company incorporated in the UK. The Company's registered office is at Westregen House, Great Bank Road, Wingates Industrial Park, Bolton, BL5 3XB. The Company's principal activity is the provision of machinery, systems and services for bottling and packaging and for beverage production, and innovative digitalisation and intralogistics solutions.


2.


Basis of preparation

The financial statements have been prepared in accordance with International Financial Reporting Standards, International Accounting Standards and Interpretations as adopted by the UK (collectively IFRSs). They were authorised for issue by the Company's board of directors on 16 February 2024.

Details of the Company's accounting policies, including changes during the year, are included in note 4.

In preparing these financial statements, management has made judgments, estimates and assumptions that affect the application of the Company accounting policies and the reported amounts of assets, liabilities, income and expenses. Actual results may differ from these estimates.

Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to estimates are recognised prospectively.

The areas where judgments and estimates have been made in preparing the financial statements and their effects are disclosed in note 5.


2.1 Basis of measurement

The financial statements have been prepared on the historical cost basis.


2.2 Changes in accounting policies

i) New standards, interpretations and amendments effective from 1 January 2023

The Directors have considered all new and amended Standards and Interpretations issued by the International Accounting Standards Board (IASB) and the International Reporting Interpretations Committee (IFRIC). There are no material adjustments required to be made to the Company's financial statements as a result.
Management has concluded that there are no material adjustments to be made to the Company's financial statements as a result of the following changes to International Financial Reporting Standards:
 - Amendments to IFRS 17 - Initial Application of IFRS 17 & IFRS 9 – Comparative Information
 - Amendments to IAS 1 and IFRS Practice Statement 2 – Disclosure of Accounting Policies
 - Amendments to IAS 8 – Definition of Accounting Estimates
 - Amendments to IAS 12 – Deferred Tax related to Assets and Liabilities arising from a Single Transaction



 

Page 15

 
Krones UK Limited
 
 
 
Notes to the Financial Statements
For the Year Ended 31 December 2023

2.Basis of preparation (continued)

ii) 

New standards, interpretations and amendments not yet effective

The following standards, interpretations and amendments have been endorsed in the UK and were not yet effective at the year-end date:
Amended standards applicable for annual periods beginning on 1 January 2024 and beyond
 - Amendments to IAS 1 – Classification of Liabilities as Current or Non-current
 - Amendments to IAS 1 – Non-current Liabilities with Covenants
 - Amendments to IFRS 16 – Lease Liability in a Sale and Leaseback
 - Amendments to IAS 7 and IFRS 7 – Supplier Finance Arrangements
Amended standard applicable for annual periods beginning on 1 January 2025 and beyond
 - Amendments to IAS 21 – Lack of Exchangeability
 
Management does not expect any material adjustments to be made to Company's financial statements going forward, as a result of these changes.


3.


Functional and presentation currency

These financial statements are presented in pound sterling, which is the Company's functional currency. All amounts have been rounded to the nearest thousand, unless otherwise indicated.


4.Accounting policies

 
4.1

Revenue

Revenue represents the amounts (excluding value added tax) derived from the provision of capital goods and services to the bottling, canning and packaging industries. Revenue and profit on ordinary activities before taxation is wholly attributable to the company's principal activity and arises mainly within the UK and Republic of Ireland and is recognised when the goods are delivered to the customer. Revenue is measured based on the consideration specified in a contract with a customer. The Company deems a contract to be in place under IFRS15 where the following cumulative requirements are met:
   - The contracting parties have legally concluded and agreed to a contract.
   - The rights of each party to the transferable goods and services and the terms of payment can be identified.
   - The contract has economic substance.
   - The receipt of contract monies is probable and enforceable.
To determine whether to recognise revenue, the Company follows a 5-step process:
     1   Identifying the contract with a customer
     2   Identifying the performance obligations
     3   Determining the transaction price
     4   Allocating the transaction price to the performance obligations
     5   Recognising revenue when/as performance obligations are satisfied

The Company does not expect to have any contracts where the period between the transfer of the promised goods or services to the customer and payment by the customer exceeds one year. As a consequence, the Company does not adjust any of the transaction prices for the time value of money.


 
Page 16

 
Krones UK Limited
 
 
 
Notes to the Financial Statements
For the Year Ended 31 December 2023

4.Accounting policies (continued)


4.1
Revenue (continued)

Machinery - delivery and installation
The Company has two types of machinery contract; a short-form contract and non short-form contracts. 
For non short-form contracts and short-form contracts, machinery revenue is recognised on delivery following guidance in respect of uninstalled materials in IFRS 15 and the associated installation services included in the contract are recognised over time as the installation is completed. 
The transaction price at any point in the contract's lifetime reflects the total contract value as amended for any variations agreed with the customer post-contract signature and any deductions for failing to meet contractual specifications.
The Company recognises contract liabilities for consideration received in respect of unsatisfied performance obligations. Similarly, if the Company satisfies a performance obligation before it receives the consideration, the company recognises a contract asset or a receivable in its statement of financial position, depending on whether something other than the passage of time is required before the consideration is due.
Sale of goods and parts
Revenue is recognised at a point in time, on delivery of the goods and parts.
Service and maintenance revenue
Krones provides a comprehensive range of products and services for customers under the heading of lifecycle service (LCS). Revenue for services that come under LCS is mostly recognised over time as the customer simultaneously receives and consumes the benefits provided by the Company’s performance as the Company performs. Accordingly, revenue is mostly recognised over time using an input method on the basis of the costs incurred. 
Revenue is only recognised on a straight-line basis in the case of longer-term maintenance services.
Other - adhesive goods
Revenue is recognised on the delivery of adhesive goods.
In all revenue categories, where the Company is aware that a return or refund is likely, then revenue is reduced and an appropriate provision is made in the Statement of Financial Position.

Page 17

 
Krones UK Limited
 
 
 
Notes to the Financial Statements
For the Year Ended 31 December 2023

4.Accounting policies (continued)

  
4.2

Leasing

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. The incremental borrowing rate is the estimated rate that the company would have to pay to borrow the same amount over a similar term, and with similar security to obtain an asset of equivalent value.

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 included in the 'Loans and borrowings' line in the Statement of Financial Position.

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 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 'Property, Plant and Equipment' line 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 4.6.

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.

Page 18

 
Krones UK Limited
 
 
 
Notes to the Financial Statements
For the Year Ended 31 December 2023

4.Accounting policies (continued)

 
4.3

Foreign currency

In preparing the financial statements of each individual group entity, transactions in currencies other than the entity's functional currency (foreign currencies) are recognised at the rates of exchange prevailing at the dates of the transactions. At the end of each reporting period, monetary items denominated in foreign currencies are retranslated at the rates prevailing at that date. Non-monetary items carried at fair value that are denominated in foreign currencies are retranslated at the rates prevailing at the date when the fair value was determined. Non-monetary items that are measured in terms of historical cost in a foreign currency are not retranslated.

Exchange differences on monetary items are recognised in profit or loss in the period in which they arise except for:
exchange differences on foreign currency borrowings relating to assets under construction for future productive use, which are included in the cost of those assets when they are regarded as an adjustment to interest costs on those foreign currency borrowings;
exchange differences on transactions entered into in order to hedge certain foreign currency risks (see  for hedging accounting policies); and
exchange differences on monetary items receivable from or payable to foreign operation for which settlement is neither planned nor likely to occur (therefore forming part of the net investment in the foreign operation), which are recognised initially in other comprehensive income and reclassified from equity to profit or loss on repayment of the monetary items.

For the purposes of presenting these financial statements, the assets and liabilities of the Company's foreign operations are translated into pounds using exchange rates prevailing at the end of each reporting period. Income and expense items are translated at the average exchange rates for the period, unless exchange rates fluctuate significantly during that period, in which case the exchange rates at the dates of the transactions are used. Exchange differences arising, if any, are recognised in other comprehensive income and accumulated in equity (and attributed to non-controlling interests as appropriate).




  
4.4

Employee benefits

 (i) Retirement benefit costs and termination benefits
Payments to defined contribution retirement benefit plans are recognised as an expense when employees have rendered service entitling them to the contributions.


 (ii) Short-term and other long-term employee benefits

A liability is recognised for benefits accruing to employees in respect of wages and salaries, annual leave and sick leave in the period the related service is rendered at the undiscounted amount of the benefits expected to be paid in exchange for that service.

Liabilities recognised in respect of short-term employee benefits are measured at the undiscounted amount of the benefits expected to be paid in exchange for the related service.

Liabilities recognised in respect of other long-term employee benefits are measured at the present value of the estimated future cash outflows expected to be made by the Company in respect of services provided by employees up to the reporting date.

Page 19

 
Krones UK Limited
 
 
 
Notes to the Financial Statements
For the Year Ended 31 December 2023

4.Accounting policies (continued)

 
4.5

Taxation

Income tax expense represents the sum of the tax currently payable and deferred tax.


(i) Current tax

The tax currently payable is based on taxable profit for the year. Taxable profit differs from ‘profit before tax’ as reported in the Statement of Profit or Loss and Other Comprehensive Income because of items of income or expense that are taxable or deductible in other years and items that are never taxable or deductible. The Company's current tax is calculated using tax rates that have been enacted or substantively enacted by the end of the reporting period.


(ii) Deferred tax

Deferred tax is recognised on temporary differences between the carrying amounts of assets and liabilities in the consolidated financial statements and the corresponding tax bases used in the computation of taxable profit. Deferred tax liabilities are generally recognised for all taxable temporary differences. Deferred tax assets are generally recognised for all deductible temporary differences to the extent that it is probable that taxable profits will be available against which those deductible temporary differences can be utilised. Such deferred tax assets and liabilities are not recognised if the temporary difference arises from the initial recognition (other than in a business combination) of assets and liabilities in a transaction that affects neither the taxable profit nor the accounting profit. In addition, deferred tax liabilities are not recognised if the temporary difference arises from the initial recognition of goodwill.

Deferred tax liabilities are recognised for taxable temporary differences associated with investments in subsidiaries and associates, and interests in joint ventures, except where the Company is able to control the reversal of the temporary difference and it is probable that the temporary difference will not reverse in the foreseeable future. Deferred tax assets arising from deductible temporary differences associated with such investments and interests are only recognised to the extent that it is probable that there will be sufficient taxable profits against which to utilise the benefits of the temporary differences and they are expected to reverse in the foreseeable future.

The carrying amount of deferred tax assets is reviewed at the end of each reporting period and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered.

Deferred tax liabilities and assets are measured at the tax rates that are expected to apply in the period in which the liability is settled or the asset realised, based on tax rates (and tax laws) that have been enacted or substantively enacted by the end of the reporting period.

The measurement of deferred tax liabilities and assets reflects the tax consequences that would follow from the manner in which the Company expects, at the end of the reporting period, to recover or settle the carrying amount of its assets and liabilities.


(iii) Current and deferred tax for the year

Current and deferred tax are recognised in profit or loss.

Page 20

 
Krones UK Limited
 
 
 
Notes to the Financial Statements
For the Year Ended 31 December 2023

4.Accounting policies (continued)

 
4.6

Property, plant and equipment

Items of property, plant and equipment are measured at cost less accumulated depreciation and any accumulated impairment losses.

If significant parts of an item of property, plant and equipment have different useful lives, then they are accounted for as separate items (major components) of property, plant and equipment. Any gain or loss on disposal of an item of property, plant and equipment is recognised in profit or loss. Subsequent expenditure is capitalised only if it is probable that the future economic benefits associated with the expenditure will flow to the Company.

Land is not depreciated. Leased assets are depreciated over the shorter of the lease term and their useful lives unless it is reasonably certain that the Company will obtain ownership by the end of the lease term. Depreciation is provided on all other items of property, plant and equipment so as to write off their carrying value over their expected useful economic lives. It is provided at the following range:

Freehold property
100 years
Building structural improvements
8 -70 years
Plant and machinery
4 - 8 years

 
4.7

Inventories

Inventories are stated at the lower of cost and net realisable value. Costs of inventories are determined on a weighted average basis. Net realisable value represents the estimated selling price for inventories less all estimated costs of completion and costs necessary to make the sale.

 
4.8

Provisions

Provisions are recognised when the Company has a present obligation (legal or constructive) as a result of a past event, it is probable that the Company will be required to settle the obligation, and a reliable estimate can be made of the amount of the obligation.

The amount recognised as a provision is the best estimate of the consideration required to settle the present obligation at the end of the reporting period, taking into account the risks and uncertainties surrounding the obligation. When a provision is measured using the cash flows estimated to settle the present obligation, its carrying amount is the present value of those cash flows (when the effect of the time value of money is material).

When some or all of the economic benefits required to settle a provision are expected to be recovered from a third party, a receivable is recognised as an asset if it is virtually certain that reimbursement will be received and the amount of the receivable can be measured reliably.

Page 21

 
Krones UK Limited
 
 
 
Notes to the Financial Statements
For the Year Ended 31 December 2023

4.Accounting policies (continued)

 
4.9

Financial instruments

Recognition and derecognition
Financial assets and financial liabilities are recognised when the company becomes a party to the contractual provisions of the financial instrument. Financial assets are derecognised when the contractual rights to the cash flow from the financial asset expire, or when the financial asset and substantially all the risks and rewards are transferred. A financial liability is derecognised when it is extinguished, discharged, cancelled or expires.
Classification and initial measurement of financial assets
Trade receivables do not contain a significant financing component and are measured at the transaction price in accordance with IFRS 15. Financial assets are classified into one of the following categories:
 - amortised cost
 - fair value through profit or loss (FVTPL), or
 - fair value through other comprehensive income (FVOCI).
In the periods presented the company does not have any assets categorised as FVTPL or FVOCI.
The classification is determined by both:
 - the entity's business model for managing the financial asset, and 
 - the contractual cash flow characteristics of the financial asset.
Impairment of trade receivables is presented within revenue.
Subsequent measurement of financial assets at amortised cost
Financial assets are measured at amortised cost if the assets meet the following conditions:
 - they are held within a business model whose objective is to hold the financial assets and collects its contractual cash flows, and
 - the contractual terms of the financial assets give rise to cash flows that are solely payments of principal and interest on the principal amount outstanding
After initial recognition, these are measured at amortised cost using the effective interest method. Discounting is omitted where the effect of discounting is immaterial.
Trade and other receivables and contract assets
The company makes use of a simplified approach in accounting for trade and other receivables as well as contract assets and records the loss allowance as lifetime expected credit losses. These are the expected shortfalls in contractual cash flows, considering the potential for default at any point during the life of the financial instrument. The company assesses impairment of trade receivables on a collective basis as they possess shared credit risk characteristics they have been grouped based on the days past due. 

Classification and measurement of financial liabilities
The company's financial liabilities include intercompany borrowings and trade and other payables. Financial liabilities are initially measured at fair value, and, where applicable, adjusted for transaction costs unless the company designated a financial liability at fair value through profit or loss. Subsequently, financial liabilities are measured at amortised cost using the effective interest method except for financial liabilities designated at FVTPL, which are carried subsequently at fair value, with gains or losses recognised in profit or loss. All interest-related charges, and if applicable, changes in an instrument's fair value that are reported in profit or loss are included within finance costs or finance income.

Page 22

 
Krones UK Limited
 
 
 
Notes to the Financial Statements
For the Year Ended 31 December 2023

4.Accounting policies (continued)

 
4.10

Dividends

Dividends are recognised when they become legally payable. In the case of interim dividends to equity shareholders, this is when declared by the directors.


5.


Accounting estimates and judgments

The preparation of the financial statements in conformity with IFRS requires management to make judgements, estimates and assumptions that affect the application of policies and reported amounts of assets and liabilities, income and expenses. The estimates and underlying assumptions are reviewed on an ongoing basis.
The estimates associated with the assumptions are based on historical experience and various other factors that are believed to be reasonable under the circumstances, the results of which form the basis for making judgements about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates.
The estimates and assumptions are reviewed on an ongoing basis. Revisions to estimates are recognised in the period in which the estimate is revised if the revision only affects that period, or in the period of revision and future periods if the revision affects both current and future periods.

Estimate and assumption 

i) Stage of completion of projects
One of the most significant estimates is the stage of completion of projects, where revenue is recognised over time rather than at a point in time, which impacts the amount of contract assets and liabilities to be recognised (where payment in advance has been received). Management bases its expectation on detailed project budgets prepared; these reflect their knowledge and experience from previous projects and forecasts prepared in terms of revenue and expenditure.




Page 23

 
Krones UK Limited
 
 
 
Notes to the Financial Statements
For the Year Ended 31 December 2023

6.


Revenue


The following is an analysis of the Company's revenue for the year from continuing operations:


2023
2022
£000
£000


Machinery
7,433
7,492

Service and maintenance
15,485
13,743

Sale of goods and parts
39,697
34,738

Other income
1,216
1,307

63,831
57,280


Analysis of revenue by country of destination:

2023
2022
£000
£000


United Kingdom
60,695
54,544

Rest of Europe
3,136
2,736

63,831
57,280

Timing of revenue recognition:

2023
2022
£000
£000

Goods and services transferred at a point in time
52,254
45,249

Goods and services transferred over time
11,577
12,031

63,831
57,280

Remaining performance obligations - The vast majority of the Company's contracts are for the delivery of goods and provision of services within the next 12 months for which the practical expedient in paragraph 121(a) of IFRS 15 applies. However, certain contracts for goods and services have been entered into for which the original contractual period was greater than 12 months.


Revenue expected to be recognised in the future related to performance obligations that are unsatisfied (or partially unsatisfied) at the year end is summarised as follows:


£000
2024
Total


Sale of goods and parts
2,590
2,590

Service and maintenance
917
917

3,507
3,507

Page 24

 
Krones UK Limited
 
 
 
Notes to the Financial Statements
For the Year Ended 31 December 2023

7.


Expenses by nature

2023
2022
£000
£000


Changes in inventories of finished goods and work in progress
(327)
(576)

Depreciation of property, plant and equipment
241
219

Depreciation of right of use assets
445
385

Employee benefit expense (See note 9)
9,190
8,545

Foreign exchange loss/(gain)
344
(614)


8.


Auditors' remuneration

During the year, the Company obtained the following services from the Company's auditors and their associates:


2023
2022
£000
£000

Fees payable to the Company's auditors for the audit of the Company's financial statements
37
33

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

All non-audit services not included above
4
3

Page 25

 
Krones UK Limited
 
 
 
Notes to the Financial Statements
For the Year Ended 31 December 2023

9.


Employee benefit expenses

2023
2022
£000
£000

Employee benefit expenses (including directors) comprise:

Wages and salaries
7,355
6,847

National insurance
803
751

Defined contribution pension cost
1,032
947

9,190
8,545

Key management personnel compensation

Key management personnel are those persons having authority and responsibility for planning, directing and controlling the activities of the Company, including the directors of the Company.


2023
2022
£000
£000


Salary
371
391

Defined contribution scheme costs
100
58

471
449

The monthly average number of persons, including the directors, employed by the Company during the year was as follows:


2023
2022
No.
No.

Sales and engineering
136
129

Page 26

 
Krones UK Limited
 
 
 
Notes to the Financial Statements
For the Year Ended 31 December 2023

10.


Directors' remuneration

2023
2022
£000
£000


Directors' emoluments
371
391

Company contributions to pension schemes
100
58

471
449


During the year, retirement benefits were accruing to the following number of directors in respect of qualifying services:


2023
2022


Defined contribution schemes
2
2

The highest paid director's emoluments were as follows:


2023
2022
£000
£000


Total emoluments and amounts receivable under long-term incentive schemes (excluding shares)
176
208

Company contributions to pension schemes
77
37

253
245


11.


Finance income and expense

Recognised in profit or loss


2023
2022
£000
£000
Finance income



Interest receivable from group companies
682
51

Total finance income

682
51

Finance expense

Interest on lease liabilities
16
11

Total finance expense
16
11


Net finance income recognised in profit or loss
666
40

Page 27

 
Krones UK Limited
 
 
 
Notes to the Financial Statements
For the Year Ended 31 December 2023

12.


Tax expense

12.1 Income tax recognised in profit or loss


2023
2022
£000
£000

Current tax

Current tax on profits for the year
1,447
1,139

Adjustments in respect of prior years
2
7

Total current tax
1,449
1,146


Deferred tax expense

Origination and reversal of timing differences
4
36


1,453
1,182


Total tax expense

Tax expense
1,453
1,182

The reasons for the difference between the actual tax charge for the year and the standard rate of corporation tax in the United Kingdom applied to profits for the year are as follows:


2023
2022
£000
£000


Profit for the year
4,589
4,875

Income tax expense
1,453
1,182

Profit before income taxes
6,042
6,057


Tax using the Company's domestic tax rate of 25% (2022:19%)
1,511
1,151

Expenses not deductible for tax purpose
16
14

Depreciation for the year in excess of capital allowances
16
65

Adjustments to tax charge in respect of prior periods
2
7

Book (loss)/profit on chargeable assets
-
(36)

Changes in provisions leading to an increase/(decrease) in the tax charge
-
(14)

Changes in the rate of corporation tax
(92)
-

Transfer pricing adjustments
-
(5)

Total tax expense
1,453
1,182



 

Page 28

 
Krones UK Limited
 
 
 
Notes to the Financial Statements
For the Year Ended 31 December 2023

12.Tax expense (continued)

12.2 Current tax assets and liabilities

2023
2022
£000
£000

Current tax liabilities

Corporation tax payable
255
32

12.3 Deferred tax balances

The following is the analysis of deferred tax assets/(liabilities) presented in the statement of financial position:


2023
2022
£000
£000


Deferred tax liabilities
(100)
(96)




Opening balance
Recognised in profit or loss
Closing balance
        £000
        £000
        £000
2023
Property, plant and equipment

(121)

(11)

(132)

Other items
25
7
32


(96)


(4)


(100)





Opening balance
Recognised in profit or loss
Closing balance
        £000
        £000
        £000
2022




Property, plant and equipment

(99)

(22)

(121)

Other items
39
(14)
25


(60)


(36)


(96)


Page 29

 
Krones UK Limited
 
 
 
Notes to the Financial Statements
For the Year Ended 31 December 2023

13.


Property, plant and equipment





Freehold property
Plant and machinery
Motor vehicles
Total

£000
£000
£000
£000



Cost or valuation






At 1 January 2022
4,854
1,270
1,472
7,596


Additions
-
100
573
673


Disposals
-
-
(194)
(194)



At 31 December 2022
4,854
1,370
1,851
8,075


Additions
-
106
451
557


Disposals
-
-
(942)
(942)



At 31 December 2023
4,854
1,476
1,360
7,690


Freehold property
Plant and machinery
Motor vehicles
Total

£000
£000
£000
£000



Accumulated depreciation and impairment






At 1 January 2022
1,043
990
923
2,956


Charge owned for the year
135
84
-
219


Charged financed for the year
-
-
385
385


Disposals
-
-
(194)
(194)



At 31 December 2022
1,178
1,074
1,114
3,366


Charge owned for the year
135
106
-
241


Charged financed for the year
-
-
445
445


Disposals
-
-
(942)
(942)



At 31 December 2023
1,313
1,180
617
3,110



Net book value


At 1 January 2022
3,811
280
549
4,640


At 31 December 2022
3,676
296
737
4,709


At 31 December 2023
3,541
296
743
4,580

Included in the net book value of freehold property is land of £5,000 (2023: £5,000).
Freehold property also includes Building structural improvements with a total net book value of £1,960,000, which are being depreciated over periods ranging between 8 and 70 years.

Page 30

 
Krones UK Limited
 
 
 
Notes to the Financial Statements
For the Year Ended 31 December 2023

13.Property, plant and equipment (continued)


13.1. Assets held under leases


The net book value of owned and leased assets included as "Property, plant and equipment" in the Statement of Financial Position is as follows:

31 December 2023
31 December 2022
£000
£000


Property, plant and equipment owned
3,837
3,972

Right-of-use assets, excluding investment property
743
737

4,580
4,709

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

Net book value

31 December 2023
31 December 2022
£000
£000

Motor vehicles
743
737

Depreciation charge for the year ended

31 December 2023
31 December 2022
£000
£000

Motor vehicles
445
385

Additions to right-of-use assets

31 December 2023
31 December 2022
£000
£000

Additions to right-of-use assets
451
573

Page 31

 
Krones UK Limited
 
 
 
Notes to the Financial Statements
For the Year Ended 31 December 2023

14.


Inventories

2023
2022
£000
£000



Work in progress
39
213

Finished goods and goods for resale
314
467

353
680

In 2023, inventories of £44,785,000 (2022: £39,821,000) were recognised as an expense during the year and included in ‘cost of sales’.
Inventories have been reduced by £51,000 at 31 December 2023 (2022: £58,000) as a result of cumulative write-downs to net realisable value over time.
Inventory write-downs and reversals are included in ‘cost of sales’.


15.


Trade and other receivables


2023
2022
£000
£000


Trade receivables
16,773
15,257

Less: provision for impairment of trade receivables
(355)
(349)

Trade receivables - net
16,418
14,908

Receivables from contracts with customers
3,897
3,188

Receivables from contracts with customers - net
3,897
3,188

Receivables from related parties
18,756
14,124

Total financial assets other than cash and cash equivalents classified as loans and receivables
39,071
32,220

Prepayments and accrued income
55
45

Other receivables
104
20

Total trade and other receivables
39,230
32,285

Total current portion

39,230
32,285

The carrying value of trade and other receivables classified as loans and receivables approximates fair value.

Page 32

 
Krones UK Limited
 
 
 
Notes to the Financial Statements
For the Year Ended 31 December 2023

15.Trade and other receivables (continued)

The Company applies the IFRS 9 simplified approach to measuring expected credit losses using a lifetime expected credit loss provision for trade receivables and contract assets. The expected loss rates are based on the Company's historical credit losses. The ageing of the current past due and not impaired financial assets is as follows:


2023
2022
£000
£000


Up to 3 months
4,633
3,525

3 to 6 months
36
217

4,669
3,742






Movements in the impairment allowance for trade receivables are as follows:


2023
2022
£000
£000


At 1 January
349
261

Movements in the year
6
88

355
349

Movements in the impairment allowance for receivables from contracts with customers are as follows:


Page 33

 
Krones UK Limited
 
 
 
Notes to the Financial Statements
For the Year Ended 31 December 2023

16.


Trade and other payables


2023
2022
£000
£000


Trade payables
1,232
1,009

Payables to related parties
2,490
3,438

Other payables
78
75

Accruals
1,047
1,176

Total financial liabilities, excluding loans and borrowings, classified as financial liabilities measured at amortised cost
4,847
5,698

Other payables - tax and social security payments
3,186
2,374

Deferred income
17,946
12,452

Payments on account
15
15

Total trade and other payables
25,994
20,539

Less: current portion - trade payables
(1,232)
(1,009)

Less: current portion - payables to related parties
(2,490)
(3,438)

Less: current portion - other payables
(3,264)
(2,449)

Less: current portion - accruals
(1,047)
(1,176)

Less: current portion - deferred income
(17,946)
(12,452)

Payments received on account
(15)
(15)

Total current portion
(25,994)
(20,539)

Total non-current position
-
-

The carrying value of trade and other payables classified as financial liabilities measured at amortised cost approximates fair value.

Page 34

 
Krones UK Limited
 
 
 
Notes to the Financial Statements
For the Year Ended 31 December 2023

17.


Lease liabilities

The book value and fair value of lease liabilities are as follows:


Book value
Fair value
Book value
Fair value
2023
2023
2022
2022
£000
£000
£000
£000

Non-current

Lease liabilities
343
343
334
334

343
343
334
334

Current

Lease liabilities
357
357
331
331

357
357
331
331

Total loans and borrowings
700
700
665
665

The carrying value of lease liabilities classified as financial liabilities measured at amortised cost approximates fair value.
The lease liabilities are secured against the assets to which they relate. Further information regarding lease liabilities is disclosed in note 20.

18.


Share capital

Authorised

2023
2023
2022
2022
Number
£000
Number
£000

Shares treated as equity
Ordinary shares of £1.00 each

1,400

1

1,400
 
1
 
Deferred shares of £1.00 each

14,000

14

14,000
 
14
 
15,400

15

15,400
 
15
 

Issued and fully paid


2023
2023
2022
2022
Number
£000
Number
£000

Ordinary shares of £1.00 each

At 1 January and 31 December
1,400

1

1,400
 
1
 

Page 35

 
Krones UK Limited
 
 
 
Notes to the Financial Statements
For the Year Ended 31 December 2023

18.Share capital (continued)

2023
2023
2022
2022
Number
£000
Number
£000

Deferred shares of £1.00 each

At 1 January and 31 December
14,000

14

14,000
 
14
 

All Ordinary shares have equal voting rights.


19.


Reserves


Retained earnings

The retained earnings account includes all current period retained profits, net of dividends.


20.


Leases




(i) Leases as a lessee



The Company leases a number of vehicles, these leases comprise only fixed payments over the lease term.


Lease liabilities are due as follows:

2023
2022
£000
£000

Contractual undiscounted cash flows due

Not later than one year
357
332

Between one year and five years
369
335

726
667


Lease liabilities included in the Statement of Financial Position at 31 December
700
665


Non-current
343
334

Current
357
331


The following amounts in respect of leases have been recognised in profit or loss:

2023
2022
£000
£000

Interest expense on lease liabilities
16
11

Page 36

 
Krones UK Limited
 
 
 
Notes to the Financial Statements
For the Year Ended 31 December 2023

21.


Financial instruments - fair values and risk management

21.1 Accounting classifications and fair values

The Company holds no derivative financial instruments to either hedge, trade or speculate.
Fair value of financial assets and liabilities
There are no significant differences between the fair values and book values of financial assets and liabilities.
The principal methods and assumptions used in estimating the fair values of financial instruments are as follows:
(a)  Interest-bearing loans and borrowings
Fair value is calculated based on discounted expected future principal and interest cash flows.
(b)  Trade and other receivables/payables
For receivables/payables with a remaining life of less than one year, the notional amount is deemed to reflect the fair value. All other receivables/payables are discounted to determine the fair value.

The following table shows the carrying amounts and fair values of financial assets and financial liabilities. It does not include fair value information for financial assets and financial liabilities not measured at fair value if the carrying amount is a reasonable approximation of fair value.


Carrying amount
31 December 2023
Note
Amortised cost
Total


        £000
        £000

Financial assets measured at fair value


  

 


Trade and other receivables

 15 

39,071

39,071

Cash and cash equivalents

 24 

1,716

1,716



  


40,787
40,787
Financial liabilities measured at fair value


  




Trade payables

 16 

4,847

4,847


Page 37

 
Krones UK Limited
 
 
 
Notes to the Financial Statements
For the Year Ended 31 December 2023

21.Financial instruments - fair values and risk management (continued)


21.1 Accounting classifications and fair values (continued)


Carrying amount
31 December 2022
Note
Amortised cost
Total


        £000
        £000

Financial assets measured at fair value


  

 


Trade and other receivables

 15 

32,220

32,220

Cash and cash equivalents

 24 

2,522

2,522



  


34,742
34,742
Financial liabilities measured at fair value


  




Trade payables

 16 

5,698

5,698



21.2 Financial risk management objectives

The board's policy is to maintain a strong capital base so as to maintain shareholder, creditor and market confidence and to sustain future development of the business. The Board of Directors monitors the return of capital, which the Company defines as total shareholders' equity and the level of dividends to ordinary shareholders.
There were no changes in the Company's approach to capital management during the year.
The Company is not subject to externally imposed capital requirements.


21.3 Market risk

Market risk is the risk that changes in the market prices such as foreign exchange rates and interest rates will affect the Company's income.


21.4 Foreign currency risk management

The Company undertakes transactions denominated in foreign currencies; consequently, exposures to exchange rate fluctuations arise. Exchange rate exposures are managed within approved policy parameters utilising forward foreign exchange contracts.

The carrying amounts of the Company's foreign currency denominated monetary assets and monetary liabilities at the end of the reporting period are as follows:


Liabilities
Assets
2023
2022
2023
2022
£000
£000
£000
£000

Euro
(19,809)
(11,842)
29,572
20,864

Page 38

 
Krones UK Limited
 
 
 
Notes to the Financial Statements
For the Year Ended 31 December 2023

21.Financial instruments - fair values and risk management (continued)


21.4 Foreign currency risk management (continued)


Foreign currency sensitivity analysis

The Company is mainly exposed to the Euro.

The following table details the Company's sensitivity to a 10% increase and decrease in the pound sterling against the relevant foreign currencies. 10% is the sensitivity rate used when reporting foreign currency risk internally to key management personnel and represents management's assessment of the reasonably possible change in foreign exchange rates. The sensitivity analysis includes only outstanding foreign currency denominated monetary items and adjusts their translation at the period end for a 10% change in foreign currency rates. The sensitivity analysis includes external loans as well as loans to foreign operations within the Company where the denomination of the loan is in a currency other than the functional currency of the lender or the borrower. A positive number below indicates an increase in profit or equity where the pound sterling strengthens 10% against the relevant currency. For a 10% weakening of the pound sterling against the relevant currency, there would be a comparable impact on the profit or equity, and the balances below would be negative.



Euro impact
2023
2022
£000
£000

Profit or loss
(30)
59

Equity
888
820


21.5 Credit risk management

Credit risk is the risk of financial loss to the Company if a customer or counter party to a financial instrument fails to meet its contractual obligations and arises principally from the Company's receivables from customers. 
The exposure to credit risk is monitored on an ongoing basis. Credit evaluations are performed on all customers requiring credit over a certain limit. The Company does not require collaterial in respect of financial assets.
At the reporting date there were no significant concentrations of credit risk. The maximum exposure to credit risk is represented by the carrying amount of each financial asset in the balance sheet.
The contractual maturity of financial liabilities has not been disclosed as it is not material.


21.6 Liquidity risk management

Liquidity risk is the risk that the Company will not be able to meet its financial obligations as they fall due. The Company is part of a cash pooling arrangement with Krones AG, and cash resources are largely and normally generated through operations.
At 31 December 2023, the Company had cash and cash equivalents of £1,716,000 (2022: £2,522,000).

Page 39

 
Krones UK Limited
 
 
 
Notes to the Financial Statements
For the Year Ended 31 December 2023

22.


Related party transactions

Details of transactions between the Company and its related parties are disclosed below.

22.1 Other related party transactions

Other related party transactions are as follows:

Related party relationship
Type of transaction
Transaction amount
Debtor/(creditor) 


2023
2022
2023
2022

        £000
        £000
        £000
        £000


Group companies

Sales

822
 
931
 
19,809

14,120

Group companies

Commission received

73
 
218
 
-

-

Group companies

Purchases

40,851
 
34,374
 
(3,543)

(3,438)

Group companies

Admin expenses incurred

627
 
1,295
 
-

-

Krones AG

Dividends

4,400
 
3,400
 
-

-


Transactions with Krones AG, the parent company, and other members of the Krones AG group, are detailed above.


23.


Controlling party

Krones AG is the immediate parent undertaking and the ultimate controlling party. The largest and smallest group in which the results of the company are consolidated is that headed by Krones AG. The consolidated financial statements of this company are available to the public and may be obtained from Krones AG, Bohmerwaldstrasse 5, 93703 Neutraubling, Germany.


24.

Notes supporting statement of cash flows

2023
2022
£000
£000


Cash at bank available on demand
1,696
2,501

Short-term deposits
15
15

Cash on hand
5
6

Cash and cash equivalents in the statement of financial position

1,716
2,522


Cash and cash equivalents in the statement of cash flows
1,716
2,522

Page 40

 
Krones UK Limited
 
 
 
Notes to the Financial Statements
For the Year Ended 31 December 2023

25.


Contingent liabilities

Contingent liabilities of a level below £1m currently exist in relation to potential claims falling under this category. No claims are currently accepted.  At this time, no legal proceedings have been issued and the timing of any progression of any intimated claims is not known.  Company management does not view these claims as having any validity.


26.


Capital management

Capital comprises share capital and retained earnings. The Company's objective when maintaining capital is to safeguard the Company's ability to continue as a going concern and so that it can provide returns to the shareholder and benefits for other stakeholders.
The Company sets the amount of capital it requires in proportion to risk. The Company manages its capital structure and makes adjustments to it in light of changes in economic conditions and the risk characteristics of the underlying assets. In order to maintain the capital structure, the Company may adjust the amount of dividends paid to the shareholder, return capital to the shareholder or issue new shares.
Net debt is calculated as total debt less cash and cash equivalents.

The Company is not subject to any externally imposed capital requirements.

The gearing ratios at 31 December 2023 and 31 December 2022 were as follows:

2023
2022
£000
£000


Debt
700
665

Cash and cash equivalents 
(1,716)
(2,522)

Net debt
(1,016)
(1,857)


Capital and reserves
19,085
18,896

Total equity
19,085
18,896

Net debt to total equity ratio
(5)% 
(10)% 

Page 41