Company Registration No. 02040161 (England and Wales)
WASHTEC (UK) LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED
31 DECEMBER 2023
31 December 2023
WASHTEC (UK) LIMITED
COMPANY INFORMATION
Directors
L Norton
(Appointed 15 July 2024)
S Struwe
(Appointed 15 July 2024)
Secretary
A Dyer
Company number
02040161
Registered office
14a Oak Industrial Park
Chelmsford Road
Great Dunmow
Essex
CM6 1XN
Auditor
Rickard Luckin Limited
1st Floor
County House
100 New London Road
Chelmsford
Essex
CM2 0RG
Solicitors
Tees Law
Tees House
95 London Road
Bishop's Stortford
Hertfordshire
CM23 3GW
WASHTEC (UK) LIMITED
CONTENTS
Page
Strategic report
1 - 2
Directors' report
3 - 4
Independent auditor's report
5 - 8
Statement of comprehensive income
9
Balance sheet
10
Statement of changes in equity
11
Notes to the financial statements
12 - 23
WASHTEC (UK) LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
- 1 -
The directors present their strategic report and audited financial statements for the year ended 31 December 2023.
Principal activities and review of the business
The principal activities of the company during the year were the supply, installation and maintenance of vehicle wash equipment, the provision of chemicals to support these activities and also the sale of associated products that enhance the services offered by the company to its core customer base. These activities are targeted towards fuel retailers, car dealers, vehicle rental agencies, public transportation operators (including bus and train) and commercial operators.
Sales revenue was recorded at £16.9m for the year (2022: £13m). The company has been able to maintain satisfactory performance across all its key divisions of the business resulting in a profit before taxation for the year ended 31 December 2023 of £475,802 (2022: £585,388).
It is felt that the influence of hand car wash has continued to decline with automated washing and self-service washing once again becoming more popular as a method of washing. The company is working on new business models to encourage this and to support its customers and is positive about the market outlook.
As at 31 December 2023, the company held net assets of £4,491,158 (2022: £4,134,604).
Principal risks and uncertainties
Competitive risks
The hand car wash competition has affected the company’s customer base, but this is becoming less significant. The company has benefited from the WashTec Group’s (WashTec AG and its subsidiaries) success in winning long-term contracts to supply equipment to major European oil companies.
As the UK fuel industry changes with one eye on the EV charging market, some mineral oil companies are considering EV as a more sustainable offering than valeting, despite a not so attractive return on investment model.
Exposure to credit, liquidity, cash flow and price risk
The company’s operations expose it to a variety of financial risks that include the effects of credit risk, currency risk and liquidity risk:
Credit risk
Company policies aimed at minimising credit risk require that deferred terms are only granted to customers who demonstrate an appropriate credit worthiness.
Currency risk
There is exposure to the variability of foreign exchange rates but this is managed in accordance with WashTec Group policy.
Liquidity risk
The company has access to funding from group companies, as part of group’s treasury management, to minimise liquidity risks.
WASHTEC (UK) LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 2 -
Key performance indicators
The company’s performance is measured against agreed minimum ‘respond and fix’ contractual criteria for established customers as well as criteria and standards set within the WashTec Group. Other performance indicators are shown below:
We strive to maintain high levels of performance against customer’s Service Level Agreements, and ongoing improvement plans, including technology advancements and digitalisation, will further improve performance and efficiency.
Changes in Management
On the 23rd October 2023 Matthias Bertoldi was appointed interim Managing Director and Company Director. Ben Hogan departed the company as Managing Director on the 8th February 2024.
On the 15th July 2024 Matthias Bertoldi resigned and was replaced as Managing Director and Company Director by Lee Norton. Sebastian Struwe was also appointed Company Director on the 15th July 2024.
L Norton
Director
24 September 2024
WASHTEC (UK) LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
- 3 -
The directors present their annual report and financial statements for the year ended 31 December 2023.
Results and dividends
The results for the year are set out on page 9.
No ordinary dividends were paid. The directors do not recommend payment of a final dividend.
Directors
The directors who held office during the year and up to the date of signature of the financial statements were as follows:
H Bernal
(Resigned 9 August 2023)
BR Hogan
(Resigned 8 February 2024)
M Bertoldi
(Appointed 23 October 2023 and resigned 15 July 2024)
L Norton
(Appointed 15 July 2024)
S Struwe
(Appointed 15 July 2024)
Auditor
In accordance with the company's articles, a resolution proposing that Rickard Luckin Limited be reappointed as auditor of the company will be put at a General Meeting.
Statement of directors' responsibilities
The directors are responsible for preparing the annual 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 of the profit or loss of the company for that period. In preparing these financial statements, the directors are required to:
select suitable accounting policies and then apply them consistently;
make judgements and accounting estimates that are reasonable and prudent;
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.
Strategic report
The company has chosen in accordance with Companies Act 2006, s. 414C(11) to set out in the company's strategic report information required by Large and Medium-sized Companies and Groups (Accounts and Reports) Regulations 2008, Sch. 7 to be contained in the directors' report. It has done so in respect of financial risk disclosures, future developments and subsequent events.
Statement of disclosure to auditor
So far as each person who was a director at the date of approving this report is aware, there is no relevant audit information of which the company’s auditor is unaware. Additionally, the directors individually have taken all the necessary steps that they ought to have taken as directors in order to make themselves aware of all relevant audit information and to establish that the company’s auditor is aware of that information.
WASHTEC (UK) LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 4 -
Medium-sized companies exemption
This report has been prepared in accordance with the provisions applicable to companies entitled to the medium-sized companies exemption.
On behalf of the board
L Norton
Director
24 September 2024
WASHTEC (UK) LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF WASHTEC (UK) LIMITED
- 5 -
Opinion
We have audited the financial statements of WashTec (UK) Limited (the 'company') for the year ended 31 December 2023 which comprise the statement of comprehensive income, the balance sheet, the statement of changes in equity and notes to the financial statements, including significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice).
In our opinion the financial statements:
give a true and fair view of the state of the company's affairs as at 31 December 2023 and of its profit for the year then ended;
have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and
have been prepared in accordance with the requirements of the Companies Act 2006.
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditor's responsibilities for the audit of the financial statements section of our report. We are independent of the company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC’s Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Conclusions relating to going concern
In auditing the financial statements, we have concluded that the directors' use of the going concern basis of accounting in the preparation of the financial statements is appropriate.
Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the company's ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.
Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.
The other information comprises the information included in the annual report other than the financial statements and our auditor's report thereon. The directors are responsible for the other information contained within the annual report. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the course of the audit, or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.
We have nothing to report in this regard.
Opinions on other matters prescribed by the Companies Act 2006
In our opinion, based on the work undertaken in the course of our audit:
the information given in the strategic report and the directors' report for the financial year for which the financial statements are prepared is consistent with the financial statements; and
the strategic report and the directors' report have been prepared in accordance with applicable legal requirements.
WASHTEC (UK) LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF WASHTEC (UK) LIMITED
- 6 -
Matters on which we are required to report by exception
In the light of the knowledge and understanding of the company and its environment obtained in the course of the audit, we have not identified material misstatements in the strategic report or the directors' report.
We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to report to you if, in our opinion:
adequate accounting records have not been kept, or returns adequate for our audit have not been received from branches not visited by us; or
the financial statements are not in agreement with the accounting records and returns; or
certain disclosures of remuneration specified by law are not made; or
we have not received all the information and explanations we require for our audit.
Responsibilities of directors
As explained more fully in the directors' responsibilities statement, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. In preparing the financial statements, the directors are responsible for assessing the company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the company or to cease operations, or have no realistic alternative but to do so.
Auditor's responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.
The extent to which our procedures are capable of detecting irregularities, including fraud, is detailed below.
Capability of the audit in detecting irregularity, including fraud
We identified areas of laws and regulations that could reasonably be expected to have a material effect on the financial statements from our: general commercial and sector experience; through verbal and written communications with those charged with governance and other management; through communications with other group auditors and via inspection of the company’s regulatory and legal correspondence.
We discussed with those charged with governance and other management the policies and procedures regarding compliance with laws and regulations.
We communicated identified laws and regulations to our team and remained alert to any indicators of non-compliance throughout the audit. We also specifically considered where and how fraud may occur within the company. The potential effect of these laws and regulations on the financial statements varies considerably.
Firstly, the company is subject to laws and regulations that directly affect the financial statements, including: the company’s constitution, relevant financial reporting standards; company law; tax legislation and distributable profits legislation and we assess the extent of compliance with these laws and regulations as part of our procedures on the related financial statement items.
Secondly the company is subject to many other laws and regulations where the consequences of non-compliance could have a material effect on the amounts or disclosures in the financial statements, for instance through the imposition of fines and penalties, or through losses arising from litigations. We identified the following areas as those most likely to have such an affect: legislation relevant to the disposal of hazardous substances; employment legislation; health and safety legislation; General Data Protection Regulations; anti-bribery and anti-corruption legislation.
WASHTEC (UK) LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF WASHTEC (UK) LIMITED
- 7 -
ISAs (UK) limit the required procedures to identify non-compliance with these laws and regulations, and no procedures over and above those already noted are required. These limited procedures did not identify any actual or suspected non-compliance with laws and regulations that could have a material impact on the financial statements.
In relation to fraud, we performed the following specific procedures in addition to those already noted:
Challenging assumptions made by management in its significant accounting estimates in particular in relation to stock obsolescence provisions, bad debt provisions and depreciation rates;
Identifying and testing journal entries, in particular any entries posted with unusual nominal ledger account combinations or any revenue account, and large or unusual entries;
Performing analytical procedures to identify unexpected movements in account balances which may be indicative of fraud;
Ensuring that testing undertaken on both the performance statement, and the Balance Sheet includes a number of items selected on a random basis;
Discussions with management;
These procedures did not identify any actual or suspected fraudulent irregularity that could have a material impact on the financial statements.
Owing to the inherent limitations of an audit, there is an unavoidable risk that we may not have detected some material misstatements in the financial statements, even though we have properly planned and performed our audit in accordance with ISAs (UK). For example, the further removed non-compliance with laws and regulations is from the events and transactions reflected in the financial statements, the less likely the procedures that we are required to undertake would identify it. In addition, as with any audit, there remains a high risk of non-detection of irregularities, as these might involve collusion, forgery, intentional omissions, misrepresentation, or the override of internal controls. We are not responsible for preventing non-compliance with laws and regulations or fraud, and cannot be expected to detect non-compliance with all laws and regulations or every incidence of fraud.
A further description of our responsibilities is available on the Financial Reporting Council’s website at: https://www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor's report.
WASHTEC (UK) LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF WASHTEC (UK) LIMITED
- 8 -
This report is made solely to the company's members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the company's members those matters we are required to state to them in an auditor's report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company's members as a body, for our audit work, for this report, or for the opinions we have formed.
Amit Popat
Senior Statutory Auditor
For and on behalf of Rickard Luckin Limited
26 September 2024
Chartered Accountants
Statutory Auditor
1st Floor
County House
100 New London Road
Chelmsford
Essex
CM2 0RG
WASHTEC (UK) LIMITED
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2023
- 9 -
2023
2022
Notes
£
£
Turnover
3
16,900,622
13,000,446
Cost of sales
(14,325,840)
(10,397,975)
Gross profit
2,574,782
2,602,471
Administrative expenses
(2,224,659)
(2,144,088)
Other operating income
153,802
167,033
Operating profit
4
503,925
625,416
Interest payable and similar expenses
7
(28,123)
(40,028)
Profit before taxation
475,802
585,388
Tax on profit
8
(119,248)
(137,021)
Profit for the financial year
356,554
448,367
The profit and loss account has been prepared on the basis that all operations are continuing operations.
WASHTEC (UK) LIMITED
BALANCE SHEET
AS AT
31 DECEMBER 2023
31 December 2023
- 10 -
2023
2022
as restated
Notes
£
£
£
£
Fixed assets
Tangible assets
9
523,941
819,834
Current assets
Stocks
10
1,723,188
1,211,071
Debtors
11
3,582,067
3,191,145
Cash at bank and in hand
2,027,280
1,339,215
7,332,535
5,741,431
Creditors: amounts falling due within one year
12
(2,920,711)
(1,779,834)
Net current assets
4,411,824
3,961,597
Total assets less current liabilities
4,935,765
4,781,431
Creditors: amounts falling due after more than one year
13
(253,091)
(487,012)
Provisions for liabilities
Provisions
15
191,516
148,929
Deferred tax liability
16
10,886
(191,516)
(159,815)
Net assets
4,491,158
4,134,604
Capital and reserves
Called up share capital
18
250,000
250,000
Profit and loss reserves
4,241,158
3,884,604
Total equity
4,491,158
4,134,604
These financial statements have been prepared in accordance with the provisions relating to medium-sized companies.
The financial statements were approved by the board of directors and authorised for issue on 24 September 2024 and are signed on its behalf by:
L Norton
Director
Company registration number 02040161 (England and Wales)
WASHTEC (UK) LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2023
- 11 -
Share capital
Profit and loss reserves
Total
£
£
£
Balance at 1 January 2022
250,000
3,436,237
3,686,237
Year ended 31 December 2022:
Profit and total comprehensive income for the year
-
448,367
448,367
Balance at 31 December 2022
250,000
3,884,604
4,134,604
Year ended 31 December 2023:
Profit and total comprehensive income for the year
-
356,554
356,554
Balance at 31 December 2023
250,000
4,241,158
4,491,158
WASHTEC (UK) LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
- 12 -
1
Accounting policies
Company information
WashTec (UK) Limited is a private company limited by shares incorporated in England and Wales with company registration no. 02040161. The registered office is 14a Oak Industrial Park, Chelmsford Road, Great Dunmow, Essex, CM6 1XN.
1.1
Accounting convention
These financial statements have been prepared in accordance with FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” (“FRS 102”) and the requirements of the Companies Act 2006.
The financial statements are prepared in sterling, which is the functional currency of the company. Monetary amounts in these financial statements are rounded to the nearest £.
The financial statements have been prepared under the historical cost convention. The principal accounting policies adopted are set out below.
This company is a qualifying entity for the purposes of FRS 102, being a member of a group where the parent of that group prepares publicly available consolidated financial statements, including this company, which are intended to give a true and fair view of the assets, liabilities, financial position and profit or loss of the group. The company has therefore taken advantage of exemptions from the following disclosure requirements:
Section 7 ‘Statement of Cash Flows’: Presentation of a statement of cash flow and related notes and disclosures;
Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instrument Issues’: Interest income/expense and net gains/losses for each category of financial instrument; basis of determining fair values; details of collateral, loan defaults or breaches, details of hedges, hedging fair value changes recognised in profit or loss and in other comprehensive income;
Section 33 ‘Related Party Disclosures’: Compensation for key management personnel.
1.2
Going concern
The financial statements are prepared on the going concern basis. trueAt the time of approving the financial statements, the directors have a reasonable expectation that the company has adequate resources to continue in operational existence for at least the next 12 months from the approval of the financial statements.
On this basis the directors continue to adopt the going concern basis of accounting in preparing the financial statements.
1.3
Turnover
Turnover is recognised at the fair value of the consideration received or receivable for goods and services provided in the normal course of business, and is shown net of VAT and other sales related taxes. The fair value of consideration takes into account trade discounts, settlement discounts and volume rebates.
Income for the sale of machines is recognised on customer acceptance of commissioning.
Income fm the sale of goods is recognised on despatch of the product.
Non contract service income is recognised upon completion of the service.
Income fm the provision of contract services is recognised evenly over the period in which the services are provided. Amounts invoiced in advance are deferred.
Rental income on sale or leaseback machines is recognised evenly over the period which the rental relates to. Amounts invoiced in advance are deferred.
WASHTEC (UK) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 13 -
Other income comprises contributions from third parties for the storage of their chemicals and a recharge of utility costs which is recharged back to the landlord as WashTec (UK) Ltd now only occupy part of the warehouse. Other income also includes employee recharges in respect of one employees salary who is currently working in the USA based subsidiary and income from the sale and leaseback of machines.
This income is recognised when it is probable that the economic benefit will flow to the company and the amount of revenue can be measured reliably.
1.4
Tangible fixed assets
Tangible fixed assets are initially measured at cost and subsequently measured at cost or valuation, net of depreciation and any impairment losses.
Depreciation is recognised so as to write off the cost or valuation of assets (other than freehold land) less their residual values over their useful lives on the following bases:
Freehold buildings
5-25 years
Plant and machinery
2-5 years
Fixtures, fittings and equipment
5 years
The gain or loss arising on the disposal of an asset is determined as the difference between the sale proceeds and the carrying value of the asset, and is credited or charged to profit or loss.
1.5
Impairment of fixed assets
At each reporting period end date, the company reviews the carrying amounts of its tangible and intangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where it is not possible to estimate the recoverable amount of an individual asset, the company estimates the recoverable amount of the cash-generating unit to which the asset belongs.
1.6
Stocks
Stocks and work in progress are stated at the lower of cost and estimated selling price less costs to complete and sell. Cost comprises direct materials and, where applicable, direct labour costs and those overheads that have been incurred in bringing the stocks to their present location and condition.
In general, cost is determined on a weighted average basis and includes transport and handling costs. Work in progress comprises direct expenditure and the relevant production overheads attributable to the state of production.
Provision is made, where necessary, for obsolete slow moving and defective stock.
1.7
Cash and cash equivalents
Cash and cash equivalents are basic financial assets and include cash in hand, deposits held at call with banks, other short-term liquid investments with original maturities of three months or less, and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities.
1.8
Financial instruments
Other financial assets
Other financial assets, including investments in equity instruments which are not subsidiaries, associates or joint ventures, are initially measured at fair value, which is normally the transaction price. Such assets are subsequently carried at fair value and the changes in fair value are recognised in profit or loss, except that investments in equity instruments that are not publicly traded and whose fair values cannot be measured reliably are measured at cost less impairment.
WASHTEC (UK) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 14 -
Impairment of financial assets
Financial assets, other than those held at fair value through profit and loss, are assessed for indicators of impairment at each reporting end date.
Financial assets are impaired where there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial asset, the estimated future cash flows have been affected. If an asset is impaired, the impairment loss is the difference between the carrying amount and the present value of the estimated cash flows discounted at the asset’s original effective interest rate. The impairment loss is recognised in profit or loss.
If there is a decrease in the impairment loss arising from an event occurring after the impairment was recognised, the impairment is reversed. The reversal is such that the current carrying amount does not exceed what the carrying amount would have been, had the impairment not previously been recognised. The impairment reversal is recognised in profit or loss.
Derecognition of financial assets
Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire or are settled, or when the company transfers the financial asset and substantially all the risks and rewards of ownership to another entity, or if some significant risks and rewards of ownership are retained but control of the asset has transferred to another party that is able to sell the asset in its entirety to an unrelated third party.
Other financial liabilities
Derivatives, including interest rate swaps and forward foreign exchange contracts, are not basic financial instruments. Derivatives are initially recognised at fair value on the date a derivative contract is entered into and are subsequently re-measured at their fair value. Changes in the fair value of derivatives are recognised in profit or loss in finance costs or finance income as appropriate, unless hedge accounting is applied and the hedge is a cash flow hedge.
Debt instruments that do not meet the conditions in FRS 102 paragraph 11.9 are subsequently measured at fair value through profit or loss. Debt instruments may be designated as being measured at fair value through profit or loss to eliminate or reduce an accounting mismatch or if the instruments are measured and their performance evaluated on a fair value basis in accordance with a documented risk management or investment strategy.
Derecognition of financial liabilities
Financial liabilities are derecognised when the company’s contractual obligations expire or are discharged or cancelled.
1.9
Taxation
The tax expense represents the sum of the tax currently payable and deferred tax.
Current tax
The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the profit and loss account because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The company’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.
WASHTEC (UK) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 15 -
Deferred tax
Deferred tax liabilities are generally recognised for all timing differences and deferred tax assets are recognised to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits. Such assets and liabilities are not recognised if the timing difference arises from goodwill or from the initial recognition of other assets and liabilities in a transaction that affects neither the tax profit nor the accounting profit.
The carrying amount of deferred tax assets is reviewed at each reporting end date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realised. Deferred tax is charged or credited in the profit and loss account, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity. Deferred tax assets and liabilities are offset when the company has a legally enforceable right to offset current tax assets and liabilities and the deferred tax assets and liabilities relate to taxes levied by the same tax authority.
1.10
Provisions
Provisions are recognised when the company has a legal or constructive present obligation as a result of a past event, it is probable that the company will be required to settle that obligation and a reliable estimate can be made of the amount of the obligation.
The amount recognised as a provision is the best estimate of the consideration required to settle the present obligation at the reporting end date, taking into account the risks and uncertainties surrounding the obligation. Where the effect of the time value of money is material, the amount expected to be required to settle the obligation is recognised at present value. When a provision is measured at present value, the unwinding of the discount is recognised as a finance cost in profit or loss in the period in which it arises.
1.11
Employee benefits
The costs of short-term employee benefits are recognised as a liability and an expense, unless those costs are required to be recognised as part of the cost of stock or fixed assets.
The cost of any unused holiday entitlement is recognised in the period in which the employee’s services are received.
Termination benefits are recognised immediately as an expense when the company is demonstrably committed to terminate the employment of an employee or to provide termination benefits.
1.12
Retirement benefits
Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.
1.13
Leases
Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessees. All other leases are classified as operating leases.
Assets held under finance leases are recognised as assets at the lower of the assets fair value at the date of inception and the present value of the minimum lease payments. The related liability is included in the balance sheet as a finance lease obligation. Lease payments are treated as consisting of capital and interest elements. The interest is charged to profit or loss so as to produce a constant periodic rate of interest on the remaining balance of the liability.
Rentals payable under operating leases, including any lease incentives received, are charged to profit or loss on a straight line basis over the term of the relevant lease except where another more systematic basis is more representative of the time pattern in which economic benefits from the leases asset are consumed.
WASHTEC (UK) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 16 -
1.14
Foreign exchange
Transactions in currencies other than pounds sterling are recorded at the rates of exchange prevailing at the dates of the transactions. At each reporting end date, monetary assets and liabilities that are denominated in foreign currencies are retranslated at the rates prevailing on the reporting end date. Gains and losses arising on translation in the period are included in profit or loss.
2
Judgements and key sources of estimation uncertainty
In the application of the company’s accounting policies, the directors are required to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised where the revision affects only that period, or in the period of the revision and future periods where the revision affects both current and future periods.
Key sources of estimation uncertainty
The estimates and assumptions which have a significant risk of causing a material adjustment to the carrying amount of assets and liabilities are as follows.
Bad debt provision
A bad debt provision is set up when the company becomes aware that the likelihood of recovering the debt is diminished.
Provisions
Provisions are recognised when the company has a present obligation as a result of a past event, as the company's best estimate of the costs that will be incurred based on legislative and contractual requirements. Provision is made for operating lease obligations and dilapidations.
Depreciation
The deprecation expense is the recognition of the decline in the value of the asset and allocation of the cost of the asset over the periods in which the asset will be used. Judgements are made on the estimated useful life of the assets which are regularly reviewed to reflect the changing environment.
Stocks
Judgement is made on the write down of parts for obsolescence based on the age and last movement dates of items.
3
Turnover and other revenue
2023
2022
£
£
Turnover analysed by class of business
Sale of goods and services
16,900,622
13,000,446
WASHTEC (UK) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
3
Turnover and other revenue
(Continued)
- 17 -
2023
2022
£
£
Turnover analysed by geographical market
United Kingdom
16,602,563
12,944,480
Ireland
-
579
USA
298,059
55,387
16,900,622
13,000,446
2023
2022
£
£
Other revenue
Other
153,802
167,033
Other income comprises contributions from third parties for the storage of their chemicals and a recharge of utility costs which is recharged back to the landlord as WashTec (UK) Ltd now only occupy part of the warehouse.
Other income also includes employee recharges in respect of one employees salary who is currently working in the USA based subsidiary and income from the sale and leaseback of machines.
4
Operating profit
2023
2022
Operating profit for the year is stated after charging/(crediting):
£
£
Exchange gains
(42,979)
(34,949)
Fees payable to the company's auditor for the audit of the company's financial statements
38,601
30,010
Depreciation of owned tangible fixed assets
77,144
96,666
Depreciation of tangible fixed assets held under finance leases
242,308
256,297
Operating lease charges
267,584
262,269
5
Employees
The average monthly number of persons (including directors) employed by the company during the year was:
2023
2022
Number
Number
Sales, administration and assembly
15
15
Service
40
41
Total
55
56
WASHTEC (UK) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
5
Employees
(Continued)
- 18 -
Their aggregate remuneration comprised:
2023
2022
£
£
Wages and salaries
2,643,422
2,478,041
Social security costs
285,393
278,077
Pension costs
125,216
108,611
3,054,031
2,864,729
6
Directors' remuneration
2023
2022
£
£
Remuneration for qualifying services
122,687
136,100
Company pension contributions to defined contribution schemes
9,900
9,020
Compensation for loss of office
122,823
255,410
145,120
The number of directors for whom retirement benefits are accruing under defined contribution schemes amounted to 1 (2022 - 1).
The emoluments of one director are paid by the parent company. Their services to WashTec (UK) Ltd and to a number of fellow subsidiaries are of a non-executive nature and their emoluments are deemed to be wholly attributable to his services of the parent company. Accordingly, the above details do not include any emoluments in respect to this director.
7
Interest payable and similar expenses
2023
2022
£
£
Interest on finance leases and hire purchase contracts
28,123
40,028
8
Taxation
2023
2022
£
£
Current tax
UK corporation tax on profits for the current period
138,181
128,971
Deferred tax
Origination and reversal of timing differences
(18,933)
8,050
Total tax charge
119,248
137,021
WASHTEC (UK) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
8
Taxation
(Continued)
- 19 -
The actual charge for the year can be reconciled to the expected charge for the year based on the profit or loss and the standard rate of tax as follows:
2023
2022
£
£
Profit before taxation
475,802
585,388
Expected tax charge based on the standard rate of corporation tax in the UK of 25.00% (2022: 19.00%)
118,951
111,224
Tax effect of expenses that are not deductible in determining taxable profit
(102)
1,061
Change in unrecognised deferred tax assets
3,280
22,494
Effect of change in corporation tax rate
(8,692)
(3,354)
Depreciation on assets not qualifying for tax allowances
5,811
5,596
Taxation charge for the year
119,248
137,021
9
Tangible fixed assets
Freehold buildings
Plant and machinery
Fixtures, fittings and equipment
Total
£
£
£
£
Cost
At 1 January 2023
225,647
1,815,680
60,188
2,101,515
Additions
7,668
7,401
8,490
23,559
Disposals
(18,605)
(7,601)
(26,206)
At 31 December 2023
233,315
1,804,476
61,077
2,098,868
Depreciation and impairment
At 1 January 2023
129,401
1,096,806
55,474
1,281,681
Depreciation charged in the year
27,804
288,596
3,052
319,452
Eliminated in respect of disposals
(18,605)
(7,601)
(26,206)
At 31 December 2023
157,205
1,366,797
50,925
1,574,927
Carrying amount
At 31 December 2023
76,110
437,679
10,152
523,941
At 31 December 2022
96,246
718,874
4,714
819,834
The net carrying value of tangible fixed assets includes the following in respect of assets held under finance leases or hire purchase contracts.
2023
2022
£
£
Plant and machinery
384,543
626,852
WASHTEC (UK) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
9
Tangible fixed assets
(Continued)
- 20 -
Included in freehold land and buildings is land costing £48,000 (2022: £48,000) which is not depreciated.
10
Stocks
2023
2022
£
£
Work in progress
65,210
13,736
Finished goods and goods for resale
1,657,978
1,197,335
1,723,188
1,211,071
Stocks are valued at the lower of cost and estimated selling price less costs to complete and sell. Included in the stock balance is a provision for obsolete stock of £294,187 (2022: £303,547).
11
Debtors
2023
2022
Amounts falling due within one year:
£
£
Trade debtors
3,338,051
2,871,304
Amounts owed by group undertakings
20,808
52,971
Other debtors
6,100
5,900
Prepayments and accrued income
217,108
260,970
3,582,067
3,191,145
Trade debtors are stated inclusive of a provision for bad debts of £144,353 (2022: £30,803)
Amounts owed by Group undertakings are unsecured, have no fixed date of repayment and are repayable on demand.
12
Creditors: amounts falling due within one year
2023
2022
Notes
£
£
Obligations under finance leases
14
196,801
227,442
Trade creditors
807,720
269,085
Amounts owed to group undertakings
241,060
141
Corporation tax
39,469
80,327
Other taxation and social security
601,610
383,878
Other creditors
311,590
217,546
Accruals and deferred income
722,461
601,415
2,920,711
1,779,834
Obligations under finance leases are secured on the asset to which the liability relates.
WASHTEC (UK) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 21 -
13
Creditors: amounts falling due after more than one year
2023
2022
Notes
£
£
Obligations under finance leases
14
225,477
422,277
Deferred income
27,614
64,735
253,091
487,012
Obligations under finance leases are secured on the asset to which the liability relates.
14
Finance lease obligations
2023
2022
Future minimum lease payments due under finance leases:
£
£
Within one year
213,551
255,565
In two to five years
235,655
449,206
449,206
704,771
Less: future finance charges
(26,928)
(55,052)
422,278
649,719
The finance leases relate to twenty sales and lease back car wash machines that are sublet to a customer in exchange for a monthly rent. The various lease terms expire between 2023 and 2025. Although there are no renewal clauses there is an option to purchase each piece of equipment within 7 days of the lease expiration date for a specified fee of between £50 and £100 per asset.
15
Provisions for liabilities
2023
2022
£
£
Warranty provision
191,516
148,929
Movements on provisions:
Warranty provision
£
At 1 January 2023
148,929
Additional provisions in the year
42,587
At 31 December 2023
191,516
The warranty provision relates to the estimated future cost of product repairs. £176,235 (2022: £148,929) of the provision is expected to be utilised in the next 12 months with the balance expected to be utilised after 12 months.
WASHTEC (UK) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 22 -
16
Deferred taxation
The following are the major deferred tax liabilities and assets recognised by the company and movements thereon:
Liabilities
Liabilities
2023
2022
Balances:
£
£
Accelerated capital allowances
-
10,886
2023
Movements in the year:
£
Liability at 1 January 2023
10,886
Credit to profit or loss
(10,886)
Liability at 31 December 2023
-
17
Retirement benefit schemes
2023
2022
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
125,216
108,611
The company operates a defined contribution pension scheme for all qualifying employees. The assets of the scheme are held separately from those of the company in an independently administered fund. Contributions outstanding at the year end amounted to £20,919 (2022: £13,522).
18
Share capital
2023
2022
2023
2022
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary shares of £1 each
250,000
250,000
250,000
250,000
WASHTEC (UK) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 23 -
19
Operating lease commitments
Lessee
At the reporting end date the company had outstanding commitments for future minimum lease payments under non-cancellable operating leases, which fall due as follows:
2023
2022
£
£
Within one year
286,778
274,550
Between two and five years
270,204
255,431
556,982
529,981
20
Related party transactions
Transactions with related parties
The company has taken advantage of the exemption available in FRS 102 from the requirement to disclose transactions with wholly owned group companies on the grounds that consolidated financial statements are prepared by the ultimate parent company.
21
Ultimate controlling party
The immediate parent company is WashTec Cleaning Technology GmbH and the ultimate undertaking and controlling party is Washtec AG, both of which are incorporated in Germany. The only company in which the results of WashTec (UK) Limited are consolidated is WashTec AG. Copies of the consolidated financial statements of WashTec AG can be obtained from the company secretary at Argonstrasse 7, 86153 Augsburg, Germany.
22
Restatement of balance sheet
Warranty provisions totalling £148,929 have been reclassified from creditors amounts falling due within one year to provisions for liabilities on the balance sheet. This has no impact on the profit for that year or the net assets of the company for that year.
The directors believe this reclassification was necessary to reflect the nature of this provision.
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