Company registration number:
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COMPANY INFORMATION
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CONTENTS
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STRATEGIC REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
The company is a wholly owned subsidiary of Culligan Shared Services (UK) Limited. The principal activity of the company during the year was that of a holding company for the investment in Harvey Water Softeners Limited.
During the year Harvey Water Softeners continued to grow, with sales increasing to £48,347,725 (2022: £41,885,342) in context of strong macro economic headwinds. In spite of the challenging market conditions the company has been able to grow whilst maintaining gross profit margin at 30.28% (2022: 24.08%), however the acquisitions and continued investment in customer services, products and the company support functions have suppressed the overall financial performance resulting in a loss before tax of £288,196 (2022: a loss of £2,430,671). The directors however consider that the expenses incurred through improving customer services, customer experience and the company’s support functions are essential in ensuring the long-term profitability of the company.
The company’s performance is predominantly linked with its subsidiary company, Harvey Water Softeners. The company has no other investments and is reliant on the performance and operations of its subsidiary.
The are no other meaningful KPI’s considered by management to applicable to the company.
During 2023 the Board of Directors (‘The Board’) made a number of key strategic decisions to the improve the performance of the company and its subsidiaries in both the near and long term. The principal decision of the Board is set out below under “Principal Decision”.
In compliance with section 172 of the Companies Act, the background to the above decisions is set out below.
The board is fully aware of its duty to promote the success of the company pursuant to Section 172 of the Companies Act 2016. Consequently, each director must act in a way that is considered, in good faith, would be most likely to promote the success of the Company for the benefit of its members as a whole, and in doing so have regard (amongst other matters) to:
∙The likely consequences of any decision in the long term;
∙The interests of the Company’s employees;
∙The needs to fosters the Company’s business relationships with suppliers, customers and others and the impact of the Company’s operations on the community and the environment.
∙The desirability of the Company maintaining a reputation for high standards of business conduct and through this the requirement of all employees to conduct businesses honestly, fairly, legally and ethically.
∙The need to act fairly as between members of the company.
a) Stakeholder Engagement
Investors
The ultimate parent is BDT & MSD Partners (BDT). The company is a subsidiary of the Culligan Group (‘Culligan’), within BDT’s diverse portfolio, which will only continue to remain attractive to investors if we demonstrate consistent and robust growth with profitable performance.
Strategic alignment is discussed on a monthly basis with regional and global Culligan leadership, with a clear mandate and set of values cascaded from the group.
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STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
Employees
The company’s continued success is predicated by a committed, dynamic, and importantly safe workforce that are driven by success and adherence to our Culligan values. Overall employee numbers increased in the year, reflecting the increased reach and operations of the company. Operational and sales employees continued to increase supporting the growth in sales and operations of the company.
Workforce engagement is managed through several initiatives, including a structured personal performance review cycle, online learning and skills management, and feedback inputs from employee questionnaires and ENPS (employee net promotor score) tracking.
Furthermore, health and safety are core to our working practices with recordable injury frequency rates, and near misses, highlighted within company KPI dashboards and seen as a priority agenda point in wider company communications.
Customers
The company is a premium brand in the sector in which it operates, with it needing to demonstrate this in the continued high quality of products and aftersales services it provides. Customer engagement, the value derived from the water solutions the company provides, and the ability to be receptive and adapt to changing customer needs and trends, are fundamental to the continued success of the business.
NPS (net promotor score) is continuously tracked through automated requests for customer feedback, reviewed and actioned upon with a clear strategy and focus on the customer experience and how this can be continuously improved. We continue to invest in both technology and training (in both our office and field-based teams) to improve the customer journey, both in terms of quality and efficiency.
Suppliers
The company buys from a range of both international suppliers and local UK businesses - the compliance, quality, speed of supply, continuous innovation, and environmental credentials, of which are key to us being able to meet the needs of our customers and operate a lean working capital position.
The company’s supply chain works closely with suppliers, specifically our larger product manufacturers, on supply planning, product development, and any other ongoing considerations as they arise. This secures robust, timely supply and mutually beneficial alignment of product innovation.
Community and Environment
The company operates throughout the United Kingdom and has several bases of operations within the country. The directors, where possible, review all development plans and current operations in order to promote the welfare of local communities, through the provision of local training and employment opportunities and minimise any disruption created through the business activities of the company. Local engagement is encouraged for all development plans and careful consideration is taken of any local recommendations made.
Promotion of the success of the company
Through decisions and actions taken in the year, the directors have actively sought to promote the success of the company and ensure their obligations to all stakeholders are met. The directors have acted in a manner and made decisions that upholds the integrity, reputation and values of the company and have considered, with due care, the long term consequences of the key decisions being made. The directors have had regard to the requirements and expectations of all stakeholders and have sought to ensure that all decisions being made reflect the needs and benefits of the stakeholders as a whole, through acting in fairness to all stakeholders.
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STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
b) Principal Decision
During the year Harvey Water Softeners continued and expanded on the policy of the acquisition of water softener dealers. The policy has allowed the company to directly expand into new geographical regions. The direct acquisition and control has also allowed the company to streamline customer support and experience ensuring that all customers are provided with a consistent high level of service. In addition, through reducing the reliance on a secondary sales market the company has been able to prevent significant price rises for end customers even whilst input prices have increased sharply and offers a greater value to the end customer. The directors believe that increasing direct sales, standardising customer experience and streamlining the customer interactive experience provides the company with the necessary quality, market reach and level of service needed to ensure longer term growth and a strong customer base.
This report was approved by the board and signed on its behalf.
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DIRECTORS' REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
The directors present their report and the financial statements for the year ended 31 December 2023.
The directors who served during the year were:
The directors are responsible for preparing the Strategic Report, the Directors' Report and the financial statements in accordance with applicable law and regulations.
In preparing these financial statements, the directors are required to:
∙select suitable accounting policies for the Company's financial statements 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 to 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.
As a holding company, HWS Holdings Limited does not have direct engagement with suppliers or customers.
The Company has not disclosed information in respect of greenhouse gas emissions, energy consumption and energy efficiency action as its energy consumption in the United Kingdom for the year is 40,000kWh or lower.
The company has chosen in accordance with Section 414C(11) of the Companies Act 2006 (Strategic Report and Directors‘ Report) Regulations 2013 to set out within the company's Strategic Report the Company's Strategic Report Information Required by Schedule 7 of the Large and Medium Sized Companies and Groups (Accounts and Reports) Regulation 2008. This includes information that would have been included in the business review and details of the principal risks and uncertainties.
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DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
Under section 487(2) of the Companies Act 2006, Menzies LLP will be deemed to have been reappointed as auditors 28 days after these financial statements were sent to members or 28 days after the latest date prescribed for filing the accounts with the registrar, whichever is earlier.
This report was approved by the board and signed on its behalf.
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INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF HWS HOLDINGS LIMITED
We have audited the financial statements of HWS Holdings Limited (the 'Company') for the year ended 31 December 2023, which comprise the Statement of Income and Retained Earnings, the Statement of Financial Position 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 Financial Reporting Standard 102 ‘The Financial Reporting Standard applicable in the UK and Republic of Ireland' (United Kingdom Generally Accepted Accounting Practice).
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditors' responsibilities for the audit of the financial statements section of our report. We are independent of the Company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the United Kingdom, including the Financial Reporting Council's Ethical Standard and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
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 Auditors' 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.
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INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF HWS HOLDINGS LIMITED (CONTINUED)
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.
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.
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INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF HWS HOLDINGS LIMITED (CONTINUED)
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an Auditors' Report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below:
The Company is subject to laws and regulations that directly affect the financial statements including financial reporting legislation. We determined that the following laws and regulations were most significant including:
∙The Companies Act 2006;
∙Financial Reporting Standard 102;
∙UK employment legislation
∙UK health and safety legislation; and
∙General Data Protection Regulations
We assessed the extent of compliance with these laws and regulations as part of our procedures on the related financial statement items.
We understood how the Company are complying with those legal and regulatory frameworks by making inquiries to management and those responsible for legal and compliance procedures. We corroborated our inquiries through our review of board minutes.
The engagement partner assessed whether the engagement team collectively had the appropriate competence and capabilities to identify or recognise non-compliance with laws and regulations. The assessment did not identify any issues in this area.
We assessed the susceptibility of the Company's financial statements to material misstatement, including how fraud might occur. Audit procedures performed by the engagement team included:
∙Understanding how those charged with governance considered and addressed the potential for override of controls or other inappropriate influence over the financial reporting process;
∙Challenging assumptions and judgments made by management in its significant accounting estimates; and
∙Identifying and testing journal entries, in particular any journal entries posted with unusual account combinations.
As a result of the above procedures, we considered the opportunities and incentives that may exist within the organisation for fraud in the following areas:
∙The use of management override of controls to manipulate results.
Because of the inherent limitations of an audit, there is a risk that we will not detect all irregularities, including those leading to a material misstatement in the financial statements or non-compliance with regulation. This risk increases the more that compliance with a law or regulation is removed from the events and transactions reflected in the financial statements, as we will be less likely to become aware of instances of non-compliance. The risk is also greater regarding irregularities occurring due to fraud rather than error, as fraud involves intentional concealment, forgery, collusion, omission or misrepresentation.
A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council's website at: www.frc.org.uk/auditorsresponsibilities. This description forms part of our Auditors' Report.
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INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF HWS HOLDINGS LIMITED (CONTINUED)
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 Auditors' Report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the Company and the Company's members, as a body, for our audit work, for this report, or for the opinions we have formed.
for and on behalf of
Chartered Accountants
Statutory Auditor
1st Floor
Midas House
62 Goldsworth Road
Surrey
GU21 6LQ
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STATEMENT OF INCOME AND RETAINED EARNINGS
FOR THE YEAR ENDED 31 DECEMBER 2023
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STATEMENT OF FINANCIAL POSITION
AS AT 31 DECEMBER 2023
The financial statements were approved and authorised for issue by the board and were signed on its behalf by:
The notes on pages 12 to 15 form part of these financial statements.
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
HWS Holdings Limited is a private company limited by shares, incorporated in the United Kingdom under the Companies Act 2006 and is registered in England and Wales. The address of the Company's registered office and principal place of business are shown on the Company Information page.
2.Accounting policies
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 FRS 102 requires the use of certain critical accounting estimates. It also requires management to exercise judgment in applying the Company's accounting policies (see note 3).
The Company has taken advantage of the following disclosure exemptions in preparing these financial statements, as permitted by the 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 11 Financial Instruments paragraphs 11.42, 11.44 to 11.45, 11.47, 11.48(a)(iii), 11.48(a)(iv), 11.48(b) and 11.48(c);
∙the requirements of Section 12 Other Financial Instruments paragraphs 12.26 to 12.27, 12.29(a), 12.29(b) and 12.29A;
∙the requirements of Section 33 Related Party Disclosures paragraph 33.7.
This information is included in the consolidated financial statements of Osmosis Holdings, LP as at 31 December 2023 and these financial statements have been filed at Companies House under Culligan Shared Services (UK) Limited, company number: 11540567.
The Company is a parent Company that is also a subsidiary included in the consolidated financial statements of its immediate parent undertaking established under the law of an EEA state and is therefore exempt from the requirement to prepare consolidated financial statements under section 401 of the Companies Act 2006.
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
The estimates and underlying assumptions are reviewed on an ongoing basis. Revision 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 do not believe that any critical judgements are required in relation to the Company's accounting policies.
The Company has no employees other than the directors, who did not receive any remuneration (2022 - £NIL) from the Company.
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
Share premium account
Profit and loss account
The company has taken advantage of the exemption available under FRS 102 Section 33.1A not to disclose transactions with wholly owned subsidiaries.
The Company's immediate parent company is Culligan Shared Services (UK) Limited (formerly AI Aqua UK Ltd). The parent company of the largest and smallest group in which the Company's results are consolidated is Osmosis Holdings LP. The registered office is 103 South Church Steet, PO Box 10240, Grand Cayman, KY1-1002, Cayman Islands. The consolidated accounts are available from Companies House under Culligan Shared Services (UK) Limited.
The ultimate parent company and controlling party is BDT Capital Partners LLC, which is incorporated in the United States.
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