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COMPANY REGISTRATION NUMBER: 00920424
TERADYNE LIMITED
FINANCIAL STATEMENTS
31 December 2023
TERADYNE LIMITED
FINANCIAL STATEMENTS
YEAR ENDED 31 DECEMBER 2023
Contents
Page
Strategic report
1
Directors' report
5
Independent auditor's report to the members
7
Statement of comprehensive income
11
Statement of financial position
12
Statement of changes in equity
13
Notes to the financial statements
14
TERADYNE LIMITED
STRATEGIC REPORT
YEAR ENDED 31 DECEMBER 2023
Introduction The Directors present their strategic report for the year ended 31 December 2023. Ryan, Erik Driscoll became director to replace Charles Jeffrey Gray who terminated his appointment on Feb 1st 2023. Business review The principal activities of Teradyne Ltd are sales and support of automatic test equipment products and services. Total sales including agency commissionaire activities were US$25,845,703 of which US$12,792,751 represents local turnover. In Q1 2023 we booked an order for $15M from Ministry of Defense which translated to approximate $3M revenue for the year. The remaining revenue ($12M) will be recognized in 2024. On the service side we have booked a 13 month maintenance agreement extension from MOD for $1.2M. Local service business remained steady throughout 2023. The company also acts as an intermediate holding company and received dividends of US$203,430,000 from Teradyne Asia while also making dividend payment of US$207,000,000 to Teradyne International UK Holdings Ltd. Principal risks and uncertainties Our business is impacted by global and industry-specific economic cycles, which are difficult to predict, and actions we have taken or may take to offset these cycles may not be sufficient. Our business and results of operations depend, in significant part, upon capital expenditures of manufacturers of semiconductors electronics and other industrial products. We are subject to intense competition. We face significant competition throughout the world in each of our reportable segments. Some of our competitors have substantial financial and other resources to pursue engineering, manufacturing, marketing and distribution of their products. We also face competition from emerging Asian companies and internal development at several of our customers. If we fail to develop new technologies to adapt to our customers' needs and if our customers fail to accept our new products, our revenues will be adversely affected. We believe that our technological position depends primarily on the technical competence and creative ability of our engineers.
Financial key and other key performance indicators Maintain Accounts Receivables past due 30 days or more <8%. The 2023 results for AR over 30 days were below the 8% for the entire period. This was in line with the expectations and confirms that the credit control and collection policies are effective. Quarterly reviews of revenues and net profit margins The company presents quarterly the financial results. Below are the Q4 and total 2023 financial results. Quarterly budget variances Quarterly budget variances were performed by various financial analysts and no material issues were identified. Directors' statement of compliance with duty to promote the success of the company Director's duties Section 172 of the Companies Act 2006 requires a Director of a company to act in the way he or she considers, in good faith, would most likely promote the success of the company for the benefit of its members as a whole. In doing This, Section 172 requires a Director to have regards, amongst other matters, to the: - Likely consequences of any decisions in the long-term; - Interests of the company's employees; - Need to foster the company's business relationships with suppliers, customers and others; - Impact of the company's operations on the community and the environment; - Desirability of the company maintaining a reputation for high standards of business conduct; - Need to act fairly as between members of the company.
This statement has been prepared in accordance with the requirements of The Companies (Miscellaneous Reporting) Regulations 2018, which require the Company to describe how the Directors have considered the matters set out in Section 172 of the Companies Act 2006 during the financial year under review. Decision making The Directors are conscious about the long-term consequences of their decisions, the importance of maintaining the Company's reputation for high standards of business conduct and the need to act fairly between the members of the Company. The Directors consider that they have acted in the way they consider, in good faith, would be most likely to promote the success of the Company in a framework of ethical, environmentally sustainable and socially responsible practices for the benefit of its members in the decisions taken during the year ended 31st December 2023. Employees Teradyne attracts, develops and retains a high-performance workhorse, comprised of people with shared value. The Company strives to foster a positive work environment that helps employees, and communities. Teradyne values a diverse, inclusive and respectful work environment where all employees enjoy challenging assignments, development opportunities and a safe, positive culture. Teradyne complies with all applicable regulatory health and safety requirements and ensures employees are provided with the knowledge to perform their jobs safely. Teradyne offers benefits designed to meet the needs of employees and their families. The Company also enables employees to share in the success of the company through various programs including stock purchase program, profit sharing and others. It is a priority to ensure that employees feel inspired, supported, safe and able to achieve their personal best. Teradyne is committed to equality through nonincriminating, sexual harassment prevention and pay equity policies. Business relationships Customers are the center of everything Teradyne does. The Company strives to help them achieve their business goals through survivability leadership and delivering reliable, socially conscious solutions that meet their needs. Teradyne partners with its customers every step of the way, from idea to final product, maintaining the highest standards. Teradyne commits to doing what it takes to ensure customer success by exceeding expectations and delivering superior test and automation solutions. Suppliers and subcontractors are critical to support the Company's business. Teradyne commits to pay promptly, to communicate effectively and to give opportunities to grow the relationship with its suppliers and subcontractors. Teradyne's Supplier Code of Conduct reflects the Company's commitment to honest and ethical business practices and provides standards and guidelines of conduct for all suppliers doing business with Teradyne.
Community and Environment Teradyne prioritises natural resource conservation, emission reduction, waste minimization and energy efficiency. Teradyne's portfolio of advance, reliable and flexible test and automation solutions are compliant with applicable regulations and maximize the value of limited environment resources. Teradyne is committed to managing business activities that could potentially impact the environment in a responsible and effective manner. Business Conduct Teradyne is committed to conducting business in a responsible manner, with strategic operational policies, procedures and values that support transparency, sustainability and legal compliance. Teradyne ensures ethical operations and business commitments through robust governance of the company's standards of business conduct and environmental, health and safety programs. Engaging with Shareholders Teradyne attracts and rewards shareholders through operational efficiency, transparency and lower costs through sustainable business practices.
This report was approved by the board of directors on 3 September 2024 and signed on behalf of the board by:
Mr RE DRISCOLL
Director
Registered office:
9th Floor
107 Cheapside
London
EC2V 6DN
TERADYNE LIMITED
DIRECTORS' REPORT
YEAR ENDED 31 DECEMBER 2023
The directors present their report and the financial statements of the company for the year ended 31 December 2023 .
Directors
The directors who served the company during the year were as follows:
Mr MD CALLAHAN
OHS SECRETARIES LIMITED
Mr RE DRISCOLL
(Appointed 1 February 2023)
Dividends
Particulars of recommended dividends are detailed in note 11 to the financial statements.
Directors' responsibilities statement
The directors are responsible for preparing the strategic report, 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 United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the company and the 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 judgments and accounting estimates that are reasonable and prudent; - state whether applicable UK Accounting Standards have been followed, subject to any material departures disclosed and explained in the financial statements; - prepare the financial statements on the going concern basis unless it is inappropriate to presume that the 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 enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities. Auditor
Each of the persons who is a director at the date of approval of this report confirms that:
- so far as they are aware, there is no relevant audit information of which the company's auditor is unaware; and - they have taken all steps that they ought to have taken as a director to make themselves aware of any relevant audit information and to establish that the company's auditor is aware of that information.
This report was approved by the board of directors on 3 September 2024 and signed on behalf of the board by:
Mr RE DRISCOLL
Director
Registered office:
9th Floor
107 Cheapside
London
EC2V 6DN
TERADYNE LIMITED
INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF TERADYNE LIMITED
YEAR ENDED 31 DECEMBER 2023
Opinion
We have audited the financial statements of Teradyne Limited (the 'company') for the year ended 31 December 2023 which comprise the statement of comprehensive income, statement of financial position, statement of changes in equity and the related notes, including a summary of significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including FRS 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice). In our opinion the financial statements: - give a true and fair view of the state of the company's affairs as at 31 December 2023 and of its profit for the year then ended; - have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; - 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 auditor's responsibilities for the audit of the financial statements section of our report. We are independent of the company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC’s Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Conclusions relating to going concern
In auditing the financial statements, we have concluded that the directors' use of the going concern basis of accounting in the preparation of the financial statements is appropriate.
Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the company's ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.
Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.
Other information
The other information comprises the information included in the annual report, other than the financial statements and our auditor’s report thereon. The directors are responsible for the other information. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether there is a material misstatement in the financial statements or a material misstatement of the other information. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.
Opinions on other matters prescribed by the Companies Act 2006
In our opinion, based on the work undertaken in the course of the audit:
- the information given in the strategic report and the 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, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. In preparing the financial statements, the directors are responsible for assessing the company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the company or to cease operations, or have no realistic alternative but to do so.
Auditor's responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements. 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: Based on our understanding of the company and the industry in which it operates, we identified the principal risks of non-compliance with laws and regulations related to the acts by the group which where contrary to applicable laws and regulations including fraud and we considered the extent to which non-compliance might have a material impact on the financial statements. We also considered those laws and regulations that have a direct impact on the preparation of the financial statements such as the Companies Act 2006. We evaluated management's incentives and opportunities for fraudulent manipulation of the financial statements (including the risk of override of controls) and determined that the principal risks were related to overstatement of revenue and the valuation of investments. As part of an audit in accordance with ISAs (UK), we exercise professional judgment and maintain professional scepticism throughout the audit. We also: - Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. - Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the internal control. - Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the directors. - Conclude on the appropriateness of the directors' use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the company's ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause the company to cease to continue as a going concern. - Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation. We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit. Use of our report
This report is made solely to the company's members, as a body, in accordance with chapter 3 of part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the company's members those matters we are required to state to them in an auditor's report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company's members as a body, for our audit work, for this report, or for the opinions we have formed.
David Guest FCA
(Senior Statutory Auditor)
For and on behalf of
UHY Hacker Young (S.E.) Limited
Chartered accountants & statutory auditor
168 Church Road
Hove
East Sussex
BN3 2DL
3 September 2024
TERADYNE LIMITED
STATEMENT OF COMPREHENSIVE INCOME
YEAR ENDED 31 DECEMBER 2023
2023
2022
Note
$000
$000
Turnover
4
12,793
12,206
Cost of sales
10,168
9,767
---------
---------
Gross profit
2,625
2,439
Distribution costs
1,684
1,757
Administrative expenses
185
123
-------
-------
Operating profit
5
756
559
Income from shares in group undertakings
8
203,430
374,645
Other interest receivable and similar income
9
211
19
----------
----------
Profit before taxation
204,397
375,223
Tax on profit
10
241
139
----------
----------
Profit for the financial year
204,156
375,084
----------
----------
Other Reserves
41
32
----------
----------
Total comprehensive income for the year
204,197
375,116
----------
----------
All the activities of the company are from continuing operations.
TERADYNE LIMITED
STATEMENT OF FINANCIAL POSITION
31 December 2023
2023
2022
Note
$000
$000
$000
Fixed assets
Investments
13
2,954,000
2,954,000
Current assets
Debtors
14
5,775
4,157
Investments
15
3,366
Cash at bank and in hand
2,890
2,171
-------
-------
8,665
9,694
Creditors: amounts falling due within one year
16
6,482
4,708
-------
-------
Net current assets
2,183
4,986
-------------
-------------
Total assets less current liabilities
2,956,183
2,958,986
-------------
-------------
Net assets
2,956,183
2,958,986
-------------
-------------
Capital and reserves
Called up share capital
19
2,954,746
2,954,746
Other reserves
20
42
33
Profit and loss account
20
1,395
4,207
-------------
-------------
Shareholders funds
2,956,183
2,958,986
-------------
-------------
These financial statements were approved by the board of directors and authorised for issue on 3 September 2024 , and are signed on behalf of the board by:
Mr RE DRISCOLL
Director
Company registration number: 00920424
TERADYNE LIMITED
STATEMENT OF CHANGES IN EQUITY
YEAR ENDED 31 DECEMBER 2023
Called up share capital
Other reserves
Profit and loss account
Total
$000
$000
$000
$000
At 1 January 2022
2,954,746
93
23,676
2,978,515
Profit for the year
375,084
375,084
Other comprehensive income for the year:
Reclassification from fair value reserve to profit and loss account
( 92)
92
Other Reserves
32
32
-------------
----
----------
-------------
Total comprehensive income for the year
( 60)
375,176
375,116
Dividends paid and payable
11
( 394,645)
( 394,645)
-------------
----
----------
-------------
Total investments by and distributions to owners
( 394,645)
( 394,645)
At 31 December 2022
2,954,746
33
4,207
2,958,986
Profit for the year
204,156
204,156
Other comprehensive income for the year:
Reclassification from fair value reserve to profit and loss account
( 32)
32
Other Reserves
41
41
-------------
----
----------
-------------
Total comprehensive income for the year
9
204,188
204,197
Dividends paid and payable
11
( 207,000)
( 207,000)
----
----
----------
----------
Total investments by and distributions to owners
( 207,000)
( 207,000)
-------------
----
----------
-------------
At 31 December 2023
2,954,746
42
1,395
2,956,183
-------------
----
----------
-------------
TERADYNE LIMITED
NOTES TO THE FINANCIAL STATEMENTS
YEAR ENDED 31 DECEMBER 2023
1. General information
The company is a private company limited by shares, registered in England and Wales. The address of the registered office is 9th Floor, 107 Cheapside, EC2V 6DN, London.
2. Statement of compliance
These financial statements have been prepared in compliance with FRS 102, 'The Financial Reporting Standard applicable in the UK and the Republic of Ireland'.
3. Accounting policies
Basis of preparation
The financial statements have been prepared under the historical cost convention unless otherwise specified within these accounting policies and in accordance with Financial Reporting Standard 102, the Financial Reporting Standard applicable in the UK and the Republic of Ireland and the Companies Act 2006. The preparation of financial statements in compliance with FRS102 requires the use of certain critical accounting estimates. It also requires management to exercise judgement in applying the Company`s accounting policies. The following accounting policies have been applied:
Interest income
Interest income is recognised in the profit or loss using the effective interest method.
Going concern
The directors have made an assessment in preparing the financial statements as to whether the Company is a going concern and have concluded that there are no material uncertainties that may cast doubt on the Company's ability to continue as a going concern. The company has net assets of $2,956,128k (2022 - $2,959,117k). The directors have reviewed cashflow forecasts for the 12 month period from the date of approval of the financial statements and consider the company to be a going concern.
Finance costs
Finance costs are charged to the 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.
Disclosure exemptions
Financial Reporting Standard 102 - reduced disclosure exemptions The company has taken advantage of the following disclosure exemptions in preparing these financial statements, as permitted by FRS 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland': - the requirements of Section 7 Statement of Cash Flows - the requirements of Section 3 Financial Statement Presentation paragraph 3.17(d); - the requirements of Section 26 Share-based Payment paragraphs 26.18(b), 26.19 to 26.21 and 26.23; and - the requirements of Section 33 Related Party Disclosures paragraph 33.7. The information is included in the consolidated financial statements of Teradyne Inc. as at 31 December 2023 and these financial statements may be obtained from 600 Riverpark Drive, North Reading, 01864, Massachusetts, United States of America. 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.
Judgements and key sources of estimation uncertainty
In the application of the Company`s accounting policies, the directors are require to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates. The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised if the revision affects only that period, or in the period of the revision and future periods if the revision affects both current and future periods. The directors consider that the following judgements have had the most significant effect on amounts recognised in the financial statements. Impairment indicators At each reporting date the directors make a judgement as to whether or not there are indicators that the Company`s investment in its direct subsidiary may be impaired. If there are any such indicators, the directors then undertake an impairment assessment. At the reporting date, there were no impairment indicators. The directors consider that the key sources of estimation uncertainty in preparing the financial statements are: Bad debt provision The trade debtors balance of $Nil (2022 - $2,723) recorded in the Balance sheet is stated after the provision for bad and doubtful debts. A full line-by line review of trade debtors is carried out at the end of each month. Whilst every attempt is made to ensure that the bad debt provisions are as accurate as possible, there remains a risk that the provisions do not match the level of debts which ultimately prove to be collectible. Deferred tax asset The directors have assessed that future profits are sufficiently probable in order to recognise the deferred tax asset. These profits are based upon the Company`s forecasts as at 31 December 2023. At each period end, the directors reassess the probability and quantum of expected future profits and reconsider recognition of the deferred tax assess accordingly. A deferred tax asset of $1,059k ( 2022 - $1,302k ) has been recognised at the year end.
Revenue recognition
Turnover is recognised to the extent that it is probable that the economic benefits will flow to the Company and the turnover can be reliably measured. Turnover is measured as the fair value of the consideration received or receivable, excluding discounts, rebates, value added tax and other sales taxes. Turnover earned in respect of the Teradyne Group's intercompany agency commissionaire agreements is excluded where the Company acts purely as an agent on behalf of fellow group companies by virtue of the fact that the risks and rewards of the transactions remain with the principals. The following criteria must also be met before turnover is recognised: Sale of goods Turnover from the sale of goods is recognised when all of the following conditions are satisfied: - the Company has transferred the significant risks and rewards of ownership to the buyer; - the Company retains neither continuing managerial involvement to the degree usually associated with ownership nor effective control over the goods sold; - the amount of turnover can be measured reliably; - it is probable that the Company will receive the consideration due under the transaction; - the costs incurred or to be incurred in respect of the transaction can be measured reliably. Rendering of services Turnover from a contract to provide services is recognised in the period in which the services are provided in accordance with the stage of completion of the contract when all of the following conditions are satisfied; - the amount of turnover can be measured reliably; - it is probable that the Company will receive the consideration due under the contract; - the stage of completion of the contract at the end of the reporting period can be measured reliably; and - the costs incurred and the costs to complete the contract can be measured reliably.
Income tax
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 balance sheet 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 balance sheet 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 balance sheet date.
Foreign currencies
Functional and presentational currency The Company`s functional and presentational currency is USD. 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 exchange rate when fair value was determined. Foreign exchange gains and losses are presented in profit or loss within "administrative expenses".
Operating leases
Rentals paid under operating leases are charged to profit or loss on a straight-line basis over the lease term. Benefits received and receivable as an incentive to sign an operating lease are recognised on a straight-line basis over the lease term, unless another systematic basis is representative of the lesee`s benefit from the use of the leased asset.
Tangible assets
Tangible fixed assets under 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.
Depreciation
Depreciation is calculated so as to write off the cost or valuation of an asset, less its residual value, over the useful economic life of that asset as follows:
Plant and machinery
-
10% - 33%
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 disposal are determined by comparing the proceeds with the carrying amount and are recognised in profit or loss.
Investments
Fixed asset investments are initially recorded at cost, and subsequently stated at cost less any accumulated impairment losses.
Listed investments are measured at fair value with changes in fair value being recognised in profit or loss.
Finance leases and hire purchase contracts
Assets held under finance leases and hire purchase contracts are recognised in the statement of financial position as assets and liabilities at the lower of the fair value of the assets and the present value of the minimum lease payments, which is determined at the inception of the lease term. Any initial direct costs of the lease are added to the amount recognised as an asset. Lease payments are apportioned between the finance charges and reduction of the outstanding lease liability using the effective interest method. Finance charges are allocated to each period so as to produce a constant rate of interest on the remaining balance of the liability.
Financial instruments
Financial assets and financial liabilities are recognised in the Balance sheet when the Company becomes a party to the contractual provisions of the instrument. Trade debtors, other debtors and creditors are classified as basic financial instruments and measured on initial recognition at transaction price. Debtors and creditors are subsequently measured at amortised cost using the effective interest rate method. A provision is established when there is objective evidence that the Company will not be able to collect all amounts due. Cash and cash equivalents are classified as basic financial instruments and comprise cash in hand and at bank, short-term bank deposits with an original maturity of three months or less and banks overdrafts which are an integral part of the Company's cash management. Financial liabilities and equity instruments issued by the Company are classified in accordance with the substance of the contractual arrangements entered into and the definitions of a financial liability and an equity instrument. An equity instrument is any contract that evidences a residual interest in the assets of the Company after deducting all of its liabilities. Equity instruments issued by the Company are recorded at the proceeds received, net of direct issue costs.
4. Turnover
Turnover arises from:
2023
2022
$000
$000
Sale of goods
47
50
Rendering of services
12,746
12,156
---------
---------
12,793
12,206
---------
---------
The turnover is attributable to the one principal activity of the company. An analysis of turnover by the geographical markets that substantially differ from each other is given below:
2023
2022
$000
$000
United Kingdom
2,621
2,057
Overseas
10,172
10,149
---------
---------
12,793
12,206
---------
---------
5. Operating profit
Operating profit or loss is stated after charging:
2023
2022
$000
$000
Depreciation of tangible assets
4
Operating lease rentals
56
56
Foreign exchange differences
62
64
----
----
6. Auditor's remuneration
2023
2022
$000
$000
Fees payable for the audit of the financial statements
38
47
----
----
Fees payable to the company's auditor and its associates for other services:
Taxation compliance services
5
4
Taxation advisory services
4
Other non-audit services
5
4
----
----
10
12
----
----
7. Staff costs
The average number of persons employed by the company during the year, including the directors, amounted to:
2023
2022
No.
No.
Marketing and support
6
6
Administration
3
3
Sales
1
1
----
----
10
10
----
----
The aggregate payroll costs incurred during the year, relating to the above, were:
2023
2022
$000
$000
Wages and salaries
1,163
1,112
-------
-------
None of the directors received any remuneration for services rendered to the company in either the current or previous year.
8. Income from shares in group undertakings
2023
2022
$000
$000
Dividends from group undertakings
203,430
374,645
----------
----------
9. Other interest receivable and similar income
2023
2022
$000
$000
Interest receivable - desc in a/cs
211
19
----
----
10. Tax on profit
Major components of tax expense
2023
2022
$000
$000
Current tax:
UK current tax expense
53
3
Deferred tax:
Origination and reversal of timing differences
188
136
----
----
Tax on profit
241
139
----
----
Reconciliation of tax expense
The tax assessed on the profit on ordinary activities for the year is lower than (2022: lower than) the standard rate of corporation tax in the UK of 23.50 % (2022: 19 %).
2023
2022
$000
$000
Profit on ordinary activities before taxation
204,397
375,223
----------
----------
Profit on ordinary activities by rate of tax
48,033
71,292
Other tax adjustment to increase/(decrease) tax liability - desc in a/cs
13
( 4)
Other tax adjustment to increase/(decrease) tax liability 2 - desc in a/cs
(47,805)
(71,182)
Other tax adjustment to increase/(decrease) tax liability 3 - desc in a/cs
33
----------
----------
Tax on profit
241
139
----------
----------
11. Dividends
2023
2022
$000
$000
Dividends paid during the year (excluding those for which a liability existed at the end of the prior year )
207,000
394,645
----------
----------
12. Tangible assets
Plant and machinery
$000
Cost
At 1 January 2023 and 31 December 2023
67
----
Depreciation
At 1 January 2023 and 31 December 2023
67
----
Carrying amount
At 31 December 2023
----
At 31 December 2022
----
13. Investments
Shares in group undertakings
$000
Cost
At 1 January 2023 and 31 December 2023
2,954,000
-------------
Impairment
At 1 January 2023 and 31 December 2023
-------------
Carrying amount
At 31 December 2023
2,954,000
-------------
At 31 December 2022
2,954,000
-------------
Subsidiaries, associates and other investments
Class of share
Percentage of shares held
Subsidiary undertakings
Teradyne (Asia) PTE Limited - 2 Shenton Way #18-01 SGX Centre 1 Singapore 068804 Singapore
Ordinary
100
Teradyne Korea Limited - 10th Floor Hi-Brand Building 215 Yangjae-dong Seocho-ku Seoul Republic of Korea
Ordinary
100
Teradyne Malaysia Sdn Bhd - 10th Floor Menara Hap Seng No 1 & 3 Jalan P Ramlee 50250 Kuala Lumpur Malaysia
Ordinary
100
Teradyne Taiwan LLC - (302)b 3rd Floor 1 & 2 No 20 Taiyuen Street Zhubei City Hsinchu Country 302 Taiwan Province of China
Ordinary
100
Teradyne (Shanghai) Co Ltd - 2F Building 10 Plot 52 1201 Gui Qiao Road Jinqiao Export Processing Zone Shanghai China
Ordinary
100
14. Debtors
2023
2022
$000
$000
Trade debtors
3,200
2,723
Amounts owed by group undertakings
1,388
33
Deferred tax asset
1,114
1,302
Prepayments and accrued income
73
98
Other debtors
1
-------
-------
5,775
4,157
-------
-------
15. Investments
2023
2022
$000
$000
Money market investments
3,366
----
-------
16. Creditors: amounts falling due within one year
2023
2022
$000
$000
Trade creditors
18
25
Amounts owed to group undertakings
3,979
2,434
Accruals and deferred income
2,238
2,092
Corporation tax
54
3
Social security and other taxes
152
120
Obligations under finance leases and hire purchase contracts
4
Other creditors
37
34
-------
-------
6,482
4,708
-------
-------
17. Finance leases and hire purchase contracts
The total future minimum lease payments under finance leases and hire purchase contracts are as follows:
2023
2022
$000
$000
Not later than 1 year
4
----
----
18. Deferred tax
The deferred tax included in the statement of financial position is as follows:
2023
2022
$000
$000
Included in debtors (note 14)
1,114
1,302
-------
-------
The deferred tax account consists of the tax effect of timing differences in respect of:
2023
2022
$000
$000
Accelerated capital allowances
( 73)
( 89)
Unused tax losses
( 1,031)
( 1,201)
Deferred tax - other timing differences user defined - desc in a/cs
( 10)
( 12)
-------
-------
(1,114)
(1,302)
-------
-------
19. Called up share capital
Issued, called up and fully paid
2023
2022
No.
$000
No.
$000
Ordinary shares of $ 1 each
2,954,745,762
2,954,746
2,954,745,762
2,954,746
---------------
-------------
---------------
-------------
2,954,745,762 Ordinary shares of $1.00 each.
20. Reserves
Other reserves Other reserves relate to the fair value of the options granted which have been charged to the profit or loss over the vesting period of the options and recognised in equity. Any amount recognised in equity relating to options which are exercised, lapsed or forfeited are transferred to the profit and loss account. Profit and loss account This reserve relates to the cumulative retained earnings less amounts distributed to shareholders.
21. Other reserves
The following movements on the other reserves are included within other reserves in the statement of changes in equity:
2023
2022
$000
$000
At start of year
33
93
Reclassification from fair value reserve to profit and loss account
(32)
(92)
Other Reserves
41
32
----
----
At end of year
42
93
----
----
22. Operating leases
The total future minimum lease payments under non-cancellable operating leases are as follows:
2023
2022
$000
$000
Not later than 1 year
86
28
Later than 1 year and not later than 5 years
14
----
----
86
42
----
----
23. Related party transactions
The Company has taken advantage of the exemption in FRS 102 Section 33.1A to not disclose transactions with wholly owned group entities.
24. Controlling party
The immediate parent undertaking is Teradyne International UK Holdings Limited, a company registered in England and Wales. The ultimate parent undertaking is Teradyne Inc., a company registered in the United States of America. The largest and smallest group of undertakings for which group accounts for the year ended 31 December 2023 have been drawn up, is that headed by Teradyne Inc. Copies of the group accounts are available from 600 Riverbank Drive, North Reading, 01864, Massachusetts, United States of America. The ultimate controlling party is Teradyne Inc.