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REGISTERED NUMBER: 01082975 (England and Wales)













Strategic Report, Report of the Directors and

Financial Statements

for the Year Ended 31 March 2016

for

Hitachi Construction Machinery (UK)
Limited

Hitachi Construction Machinery (UK)
Limited (Registered number: 01082975)






Contents of the Financial Statements
for the Year Ended 31 March 2016




Page

Company Information 1

Strategic Report 2

Report of the Directors 3

Report of the Independent Auditors 5

Income Statement 7

Other Comprehensive Income 8

Balance Sheet 9

Statement of Changes in Equity 10

Notes to the Financial Statements 11


Hitachi Construction Machinery (UK)
Limited

Company Information
for the Year Ended 31 March 2016







DIRECTORS: J J Jones
M Sue
M Kadoya
D A Hearne
H Yoshida
A Baker



SECRETARY: A Shield



REGISTERED OFFICE: Monkton Business Park North
Hebburn
NEWCASTLE
NE31 2JZ



REGISTERED NUMBER: 01082975 (England and Wales)



AUDITORS: Ernst & Young LLP
Citygate
St James' Boulevard
Newcastle upon Tyne
NE1 4JD



BANKERS: The Royal Bank of Scotland
1 Trinity Gardens
2nd Floor
Broadchare
Quayside
Newcastle Upon Tyne
NE1 2HF



SOLICITORS: Addleshaw Goddard
Sovereign House
PO Box 8
Sovereign Street
Leeds
LS1 1HQ

Hitachi Construction Machinery (UK)
Limited (Registered number: 01082975)

Strategic Report
for the Year Ended 31 March 2016

The directors present their strategic report for the year ended 31 March 2016.


The period under review has proven to be more difficult than the previous recorded trading year, due to unexpected
increase in material costs which directly impacted company performance resulting in reduced turnover and profit.
Turnover £149,997,000 (FY15 £162,991,000) : Profit before tax £5,155,000 (FY15 £9,822,000)

Continued uncertainty in global markets surrounding commodities and oil pricing has adversely impacted upon general
confidence. Early indications of recovery in oil prices seen in recent months are expected to continue, lifting prices
from their all time low. The board expect this to continue which would aid world trade in global economies, especially
for those geographical regions which are dependent upon stronger commodity pricing. The current migrant crisis
effecting the European Union is expected to continue to, undermine confidence. Despite which the board are cautiously
optimistic about future performance.

The improved demand for construction equipment continues to spread from the South East region of the country towards
the Midlands and South West regions. The directors anticipate these regions to continue to show moderate signs of
improved demand with further infrastructure developments announced by the UK government.

In the coming financial year the directors expect trading conditions to be challenging due to increased competition from
other manufacturers , although the directors anticipate the future release of new models with improved performance
among mid-range excavators will be well received by the market and will have a positive impact on company
performance for following trading year. The directors believe that the company's strategy to further develop new
customer business, whilst continuing to support our existing customer base will be essential.

The company uses a number of financial and non-financial KPI's to measure company performance and these are
reported on a continued basis both at board level and to managers during monthly meetings. These KPI's include;
customer service level, complaints, sales plan achievement and a number of health and safety, environmental and
employee related KPI's. The directors consider that the company has a very effective measurement and reporting
framework, consistent with its size and complexity.

FINANCIAL RISKS AND MANAGEMENT OBJECTIVES
The company's financial instruments comprise of forward exchange contracts entered into in respect of purchases
denominated in foreign currencies, together with cash, debtors and creditors. Management objectives of continued focus
on customer requirements, effective delivery of improved services to customers, continued control of direct and indirect
costs and improved product quality continue to be at the forefront of the company's principles.

Cash Flow Risk
The company invests surplus cash in a floating rate interest yielding bank deposit account and has access to a floating
rate interest bearing overdraft facility.

Credit Risk
The company has external debtors, however, the company manages credit risk by undertaking appraisals of customers in
order to ensure that credit is extended to customers who are credit worthy, and unlikely to default.

Liquidity Risk
The company aims to mitigate liquidity risk by managing cash generated by its operations.

ON BEHALF OF THE BOARD:





J J Jones - Director


30 June 2016

Hitachi Construction Machinery (UK)
Limited (Registered number: 01082975)

Report of the Directors
for the Year Ended 31 March 2016

The directors present their report with the financial statements of the company for the year ended 31 March 2016.

DIVIDENDS
The profit for the year, after taxation, was £4,125,000 (2015 - £7,723,000). An interim dividend was paid during the
year of £17,183,000 (2015 - £4,144,000). The directors propose a final dividend of £2,062,500 in respect of this
financial trading year.

DIRECTORS
The directors shown below have held office during the whole of the period from 1 April 2015 to the date of this report.

J J Jones
M Sue
M Kadoya
D A Hearne
A Baker

Other changes in directors holding office are as follows:

A J Raine - resigned 22 September 2015
P H A Burger - resigned 15 June 2015
S Urata - resigned 4 March 2016
H Yoshida - appointed 15 June 2015
C Hirose - appointed 15 June 2015 - resigned 4 March 2016

POLITICAL AND CHARITABLE CONTRIBUTIONS
The group made no political contributions during the year (2015 - £nil).

Donations to UK charities amounted to £38,781 (2015 - £17,375).

EMPLOYMENT MATTERS
It is the company's policy to give full and fair consideration to applications for employment made by disabled persons
having regard to their particular aptitudes and abilities, to continue wherever possible the employment of staff who
became disabled and to provide opportunities for training and career development of disabled employees.

Frequent meetings are held with employees representatives to discuss sales, financial position and prospects.
Opportunity is given at these meetings for senior executives to be questioned about matters, which concern the
employees.

STATEMENT OF DIRECTORS' RESPONSIBILITIES
The directors are responsible for preparing the Report of the Directors 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;
- state whether applicable 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.


Hitachi Construction Machinery (UK)
Limited (Registered number: 01082975)

Report of the Directors
for the Year Ended 31 March 2016

STATEMENT OF DIRECTORS' RESPONSIBILITIES - continued
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.

STATEMENT AS TO DISCLOSURE OF INFORMATION TO AUDITORS
So far as the directors are aware, there is no relevant audit information (as defined by Section 418 of the Companies Act
2006) of which the company's auditors are unaware, and each director has taken all the steps that he ought to have taken
as a director in order to make himself aware of any relevant audit information and to establish that the company's
auditors are aware of that information.

AUDITORS
The auditors, Ernst & Young LLP, will be proposed for re-appointment at the forthcoming Annual General Meeting.

ON BEHALF OF THE BOARD:





J J Jones - Director


30 June 2016

Report of the Independent Auditors to the Members of
Hitachi Construction Machinery (UK)
Limited

We have audited the financial statements of Hitachi Construction Machinery (UK) Limited for the year ended 31 March
2016 which comprise the Income Statement, the Statement of Comprehensive Income, the Balance Sheet, the Statement
of Changes in Equity and the related notes 1 to 22. The financial reporting framework that has been applied in their
preparation is applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted
Accounting Practice), including financial Reporting Standard 101 'Reduced Disclosure Framework'.

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 a Report of the Auditors 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.

Respective responsibilities of directors and auditors
As explained more fully in the Statement of Directors' Responsibilities set out on pages three and four, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view. Our responsibility is to audit and express an opinion on the financial statements in accordance with applicable law and International Standards on Auditing (UK and Ireland). Those standards require us to comply with the Auditing Practices Board's Ethical Standards for Auditors.

Scope of the audit of the financial statements
An audit involves obtaining evidence about the amounts and disclosures in the financial statements sufficient to give
reasonable assurance that the financial statements are free from material misstatement, whether caused by fraud or error.
This includes an assessment of whether the accounting policies are appropriate to the company's circumstances and have
been consistently applied and adequately disclosed; the reasonableness of significant accounting estimates made by the
directors; and the overall presentation of the financial statements. In addition, we read all the financial and non-financial
information in the Report and financial statements to identify material inconsistencies with the audited financial
statements and to identify any information that is apparently materially incorrect based on, or materially inconsistent
with, the knowledge acquired by us in the course of performing the audit. If we become aware of any apparent material
misstatements or inconsistencies we consider the implications for our report.

Opinion on financial statements
In our opinion the financial statements:
- give a true and fair view of the state of the company's affairs as at 31 March 2016 and of its profit for the year then
ended;
- have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice, including
Financial Reporting Standard 101 'Reduced Disclosure Framework'; and
- have been properly prepared in accordance with the requirements of the Companies Act 2006.

Opinion on other matter prescribed by the Companies Act 2006
In our opinion the information given in the Strategic Report and the Report of the Directors for the financial year for
which the financial statements are prepared is consistent with the financial statements.

Report of the Independent Auditors to the Members of
Hitachi Construction Machinery (UK)
Limited


Matters on which we are required to report by exception
We have nothing to report in respect of the following matters where 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.




Darren Rutherford (Senior Statutory Auditor)
for and on behalf of Ernst & Young LLP
Citygate
St James' Boulevard
Newcastle upon Tyne
NE1 4JD

30 June 2016

Hitachi Construction Machinery (UK)
Limited (Registered number: 01082975)

Income Statement
for the Year Ended 31 March 2016

2016 2015
Notes £'000 £'000 £'000 £'000

TURNOVER 3 149,997 162,991

Cost of sales 137,501 145,510
GROSS PROFIT 12,496 17,481

Distribution costs 1,569 1,702
Administrative expenses 5,828 6,034
7,397 7,736
OPERATING PROFIT 5,099 9,745

Interest receivable from group undertakings 57 88
5,156 9,833

Interest payable and similar charges 5 1 11
PROFIT ON ORDINARY ACTIVITIES
BEFORE TAXATION

6

5,155

9,822

Tax on profit on ordinary activities 7 1,030 2,099
PROFIT FOR THE FINANCIAL YEAR 4,125 7,723

Hitachi Construction Machinery (UK)
Limited (Registered number: 01082975)

Other Comprehensive Income
for the Year Ended 31 March 2016

2016 2015
Notes £'000 £'000

PROFIT FOR THE YEAR 4,125 7,723

OTHER COMPREHENSIVE INCOME - -
TOTAL COMPREHENSIVE INCOME
FOR THE YEAR

4,125

7,723

Hitachi Construction Machinery (UK)
Limited (Registered number: 01082975)

Balance Sheet
31 March 2016

2016 2015
Notes £'000 £'000 £'000 £'000
FIXED ASSETS
Tangible assets 9 4,398 4,178

CURRENT ASSETS
Stocks 10 27,110 21,296
Debtors 11 10,699 31,155
Cash at bank and in hand 3,893 6,368
41,702 58,819
CREDITORS
Amounts falling due within one year 12 34,110 37,893
NET CURRENT ASSETS 7,592 20,926
TOTAL ASSETS LESS CURRENT
LIABILITIES

11,990

25,104

PROVISIONS FOR LIABILITIES 14 313 369
NET ASSETS 11,677 24,735

CAPITAL AND RESERVES
Called up share capital 15 1,350 1,350
Retained earnings 16 10,327 23,385
SHAREHOLDERS' FUNDS 11,677 24,735


The financial statements were approved by the Board of Directors on 30 June 2016 and were signed on its behalf by:





J J Jones - Director


Hitachi Construction Machinery (UK)
Limited (Registered number: 01082975)

Statement of Changes in Equity
for the Year Ended 31 March 2016

Called up
share Retained Total
capital earnings equity
£'000 £'000 £'000

Balance at 1 April 2014 1,350 19,806 21,156

Changes in equity
Dividends - (4,144 ) (4,144 )
Total comprehensive income - 7,723 7,723
Balance at 31 March 2015 1,350 23,385 24,735

Changes in equity
Dividends - (17,183 ) (17,183 )
Total comprehensive income - 4,125 4,125
Balance at 31 March 2016 1,350 10,327 11,677

Hitachi Construction Machinery (UK)
Limited (Registered number: 01082975)

Notes to the Financial Statements
for the Year Ended 31 March 2016

1. AUTHORISATION OF FINANCIAL STATEMENTS AND STATEMENT OF COMPLIANCE FRS 101

The financial statements of Hitachi Construction Machinery (UK) Limited for the year ended 31 March 2016
were authorised for issue by the board of directors on 30/06/2016 and the balance sheet was signed on the
board's behalf by 30/06/2016. The company is a private company and is incorporated and domiciled in the UK.
The address of its registered office is Monkton Business Park North, Hebburn, Newcastle, NE31 2JZ. The
financial statements were prepared in accordance with Financial Reporting Standard 101 Reduced Disclosure
Framework (FRS101) and in accordance with applicable accounting standards. The company's financial
statements are presented in British sterling and all values are rounded to the nearest pounds (£   ) except where
otherwise indicated. The results of Hitachi Construction Machinery (UK) Limited are included in the
consolidated financial statements of Hitachi Construction Machinery Japan, which are available from
https://www.hitachicm.com/global/environment-csr/csr-en/download/ . The principal accounting policies adopted
by the company are set out in note 2.

2. ACCOUNTING POLICIES

Basis of preparation
The principal accounting policies applied in the preparation of these financial statements are set out below.

The company transitioned from previously extant UK GAAP to FRS 101 for all periods presented. Transition
reconciliations showing all material adjustments are disclosed in note 22.

The company has taken advantage of the following disclosure exemptions in preparing these financial
statements, as permitted by FRS 101 "Reduced Disclosure Framework":

the requirements of IFRS 7 Financial Instruments: Disclosures;
the requirements of paragraphs 91 to 99 of IFRS 13 Fair Value Measurement;
the requirement in paragraph 38 of IAS 1 Presentation of Financial Statements to present comparative
information in respect of:
- paragraph 79(a)(iv) of IAS 1;
- paragraph 73(e) of IAS 16 Property, Plant and Equipment; and
- paragraph 118(e) of IAS 38 Intangible Assets;
the requirements of paragraphs 10(d), 10)(f), 16, 38A, 38B, 38C, 38D, 40A, 40B, 40C, 40D and 111 of IAS
1 Presentation of Financial Statements;
the requirements of paragraphs 134 to 136 of IAS 1 Presentation of Financial Statements;
the requirements of IAS 7 Statement of Cash Flows;
the requirements of paragraphs 30 and 31 of IAS 8 Accounting Policies, Changes in Accounting Estimates
and Errors;
the requirements of paragraphs 17 and 18A of IAS 24 Related Party Disclosures;
the requirements in IAS 24 Related Party Disclosures to disclose related party transactions entered into
between two or more members of a group;
the requirements of paragraphs 134(d) to 134(f) and 135(c) to 135(e) of IAS 36 Impairments of Assets.

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

Sale of goods
Revenue from the sale of goods is recognised when the significant risks and rewards of ownership of the goods
have passed to the buyer, usually on dispatch of the goods, or where the customer has paid for the goods but
requested that the company hold the goods on their behalf for a short period of time.

Hitachi Construction Machinery (UK)
Limited (Registered number: 01082975)

Notes to the Financial Statements - continued
for the Year Ended 31 March 2016

2. ACCOUNTING POLICIES - continued

Tangible fixed assets
Tangible fixed assets are stated at the cost less accumulated depreciation and accumulated impairment losses.
Depreciation is provided at the following annual rates in order to write off each asset over its estimated useful
life.

Freehold property - 1.5% per annum
Short leasehold - over the lease term
Plant and machinery - 10% to 20% per annum
Fixtures and fittings - 10% to 20% per annum
Motor vehicles - 25% on cost per annum
Computer equipment - 20% per annum

The carrying value of tangible fixed assets are reviewed for impairment if events or changes in circumstances
indicate that the carrying value may not be recoverable. Useful economic lives and residual values are reviewed
annually and where adjustments are required, these are made prospectively.

Stocks
Stocks are stated at the lower of cost and net realisable value. Cost is arrived at as follows:

Raw materials - purchase cost on a first in first out basis

Work in progress and finished goods - cost of direct materials and labour plus attributable overheads based
on a normal level of activity less foreseeable losses.

Net realisable value is based on estimated selling price less any further costs to be incurred to completion and
disposal.

Taxation
Current tax assets and liabilities are measured at the amount expected to be recovered from or paid to the
taxation authorities, based on tax rates and laws that are enacted or substantively enacted by the balance sheet
date. Deferred income tax is recognised on all temporary differences arising between the tax bases of assets and
liabilities and their carrying amounts in the financial statements. Deferred income tax assets are recognised only
to the extent that taxable profit will be available against which the deductible temporary differences, carried
forward tax credits or tax losses can be utilised.

Deferred income tax assets and liabilities are measured on an undiscounted basis at the tax rates that are
expected to apply when the related asset is released or liability is settled, based on tax rates and laws enacted or
substantively enacted at the balance sheet date.

The carrying amount of deferred income tax assets is reviewed at each balance sheet date. Deferred income tax
assets and liabilities are offset, only if a legally enforcement right exists to set off current tax assets against
current tax liabilities., the deferred income taxes relate to the same taxation authority and that authority permits
the company to make a single net payment. Income tax is charged or credited to other comprehensive income if
it relates to items that are charged or credited to other comprehensive income. Similarly, income tax is charged
or credited directly to equity if it relates to items that are credited or charged directly to equity. Otherwise
income tax is recognised in the income statement.

Foreign currencies
Assets and liabilities in foreign currencies are translated into sterling at the rates of exchange ruling at the
balance sheet date. Transactions in foreign currencies are translated into sterling at the rate of exchange ruling at
the date of transaction. Exchange differences are taken into account in arriving at the operating result. The
company uses forward currency contracts as hedges of its exposure to foreign currency risk. The fair value of
these contracts is included on the balance sheet as a Financial asset or a Financial liability

Hitachi Construction Machinery (UK)
Limited (Registered number: 01082975)

Notes to the Financial Statements - continued
for the Year Ended 31 March 2016

2. ACCOUNTING POLICIES - continued

Hire purchase and leasing commitments
Rentals paid under operating leases are charged to the profit or loss on a straight line basis over the period of the
lease.

Operating lease income
Operating lease income is credited to the profit and loss account on a straight line basis over the duration of the
related contracts.

Pensions
The company operates a defined contribution pension scheme. The company contributes to a private pension
scheme for directors. Contributions are charged to the income statement as they become payable in accordance
with the rules of the scheme.

Cash at bank and in hand
Cash and short term deposits in the balance sheet comprise cash at banks and in hand and short term deposits
with an original maturity of three months or less.

Trade and other debtors
Trade debtors, which generally have 30-90 day terms, are recognised and carried at the lower of their original
invoiced value and recoverable amount. Where the time value of money is material, receivables are carried at
amortised cost. Provision for impairment is made through profit or loss when there is objective evidence that the
Company will not be able to recover balances in full. Balances are written off when the probability of recovery
is assessed as being remote.

Critical accounting estimates and judgements
The company makes estimates and assumptions concerning the future. The resulting accounting estimates will,
by definition, seldom equal the related actual results. The estimates and assumptions that have a significant risk
of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are
addressed below:

(a) Useful economic lives of tangible fixed assets.
The annual depreciation charge for property, plant and equipment is sensitive to changes in the estimated useful
economic lives and residual values of the assets. The useful economic lives and residual values are re-assessed
annually. They are amended when necessary to reflect current estimates, based on technological advancement,
future investments, economic utilisation and the physical condition of the assets. See note 8 for the carrying
amount of the property, plant and equipment.

(b) Stock provisioning
The company distributes construction equipment, which is subject to changing demands. As a result, it is
necessary to consider the recoverability of the cost of stock and the associated provisioning required.

When calculating the stock provision, management considers the nature and condition of the stock, as well as
applying assumptions around anticipated saleability of finished goods and future usage of raw materials. See
note 10 for the net carrying amount of the stock and associated provision.

Hitachi Construction Machinery (UK)
Limited (Registered number: 01082975)

Notes to the Financial Statements - continued
for the Year Ended 31 March 2016

3. TURNOVER

The turnover and profit before taxation are attributable to the one principal activity of the company.

An analysis of turnover by geographical market is given below:

2016 2015
£'000 £'000
United Kingdom 147,659 161,185
Europe 2,338 1,806
149,997 162,991

4. EMPLOYEES AND DIRECTORS

2016 2015
£    £   

Wages and salaries 6,275 6,033
Social security costs 716 706
Other pension costs 191 230
7,182 6,969

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

2016 2015
No. No.

Office and management 87 70
Assembly 42 40
129 110

For part of the year the directors were remunerated by a fellow group undertaking, Heavy Machinery Group
Holdings Limited. Emoluments of £1,563,000 (2015 - £1,931,000) are largely for their services to this company.
Of this amount, £725,000 was paid directly by Hitachi Construction Machinery (UK) Limited. In addition
payments of £76,000 (2015 : £137,000) were made into the company pension scheme, of which £23,000 were
paid directly by Hitachi Construction Machinery (UK) Limited. The emoluments of the highest paid director
(including pension payments) were £706,000 (2015 : £756,000)

All other directors are remunerated by Hitachi Construction Machinery Europe (NV) and the directors believe
that any emoluments received for services to this company are negligible.

5. INTEREST PAYABLE AND SIMILAR CHARGES
2016 2015
£'000 £'000
Interest payable - 4
Other interest 1 7
1 11

Hitachi Construction Machinery (UK)
Limited (Registered number: 01082975)

Notes to the Financial Statements - continued
for the Year Ended 31 March 2016

6. PROFIT BEFORE TAXATION

The profit before taxation is stated after charging/(crediting):
2016 2015
£'000 £'000
Cost of inventories recognised as expense 137,501 145,510
Hire of plant and machinery 11 14
Depreciation - owned assets 449 408
Profit on disposal of fixed assets (91 ) (2 )
Auditors remuneration 47 45
Operating lease charges - land and buildings 259 231
Exchange gains (283 ) (391 )

7. TAXATION

Analysis of tax expense
2016 2015
£'000 £'000
Current tax:
Tax 1,086 2,119

Deferred tax (56 ) (20 )
Total tax expense in income statement 1,030 2,099

Factors affecting the tax expense
The tax assessed for the year is higher than the standard rate of corporation tax in the UK. The difference is
explained below:

2016 2015
£'000 £'000
Profit on ordinary activities before income tax 5,155 9,822
Profit on ordinary activities multiplied by the standard rate of corporation
tax in the UK of 20 % (2015 - 21 %)

1,031

2,063

Effects of:
Expenses not deductible for tax purposes 54 44
Adjustment to tax charge in respect of previous periods 1 (10 )
Difference in tax rates (55 ) -
Timing difference (1 ) 2
Tax expense 1,030 2,099

8. DIVIDENDS
2016 2015
£'000 £'000
Ordinary shares of £1 each
Interim 17,183 4,144

Hitachi Construction Machinery (UK)
Limited (Registered number: 01082975)

Notes to the Financial Statements - continued
for the Year Ended 31 March 2016

9. TANGIBLE FIXED ASSETS
Freehold Short Plant and
property leasehold machinery
£'000 £'000 £'000
COST
At 1 April 2015 3,658 73 480
Additions - 91 20
At 31 March 2016 3,658 164 500
DEPRECIATION
At 1 April 2015 485 23 445
Charge for year 48 14 6
Eliminated on disposal - - -
At 31 March 2016 533 37 451
NET BOOK VALUE
At 31 March 2016 3,125 127 49
At 31 March 2015 3,173 50 35

Fixtures
and Motor Computer
fittings vehicles equipment Totals
£'000 £'000 £'000 £'000
COST
At 1 April 2015 217 1,297 654 6,379
Additions 4 538 33 686
Disposals - (514 ) - (514 )
At 31 March 2016 221 1,321 687 6,551
DEPRECIATION
At 1 April 2015 172 826 250 2,201
Charge for year 6 283 92 449
Eliminated on disposal - (497 ) - (497 )
At 31 March 2016 178 612 342 2,153
NET BOOK VALUE
At 31 March 2016 43 709 345 4,398
At 31 March 2015 45 471 404 4,178

10. STOCKS
2016 2015
£'000 £'000
Work-in-progress 595 434
Finished goods 26,515 20,862
27,110 21,296

Stocks are stated after provisions for impairment of £585,961 (2015 - £663,397).

Hitachi Construction Machinery (UK)
Limited (Registered number: 01082975)

Notes to the Financial Statements - continued
for the Year Ended 31 March 2016

11. DEBTORS: AMOUNTS FALLING DUE WITHIN ONE YEAR
2016 2015
£'000 £'000
Trade debtors 7,974 14,164
Amounts owed by group undertakings 1,794 16,737
Other debtors 619 8
Fair value of forward contracts (note 19) 107 -
Prepayments and accrued income 205 246
10,699 31,155

12. CREDITORS: AMOUNTS FALLING DUE WITHIN ONE YEAR
2016 2015
£'000 £'000
Trade creditors 3,521 2,277
Amounts owed to group undertakings 25,403 29,058
Tax 621 1,134
Social security and other taxes 2,609 3,980
Other creditors 100 113
Accruals and deferred income 1,856 1,331
34,110 37,893

Trade creditors are non interest bearing and are normally settled on 30 day terms.

13. LEASING AGREEMENTS

Minimum lease payments under non-cancellable operating leases fall due as follows:
2016 2015
£'000 £'000
Within one year 196 160
Between one and five years 885 711
In more than five years 670 729
1,751 1,600

14. PROVISIONS FOR LIABILITIES
2016 2015
£'000 £'000
Deferred tax 313 369

Deferred
tax
£'000
Balance at 1 April 2015 369
Credit to Income Statement during year (56 )
Balance at 31 March 2016 313

Deferred tax comprises deferred tax on rolled over gains of £316,000 (2015 - £371,000) less other timing
differences of £3,000 (2015 - £2,000).

Hitachi Construction Machinery (UK)
Limited (Registered number: 01082975)

Notes to the Financial Statements - continued
for the Year Ended 31 March 2016

15. CALLED UP SHARE CAPITAL

Allotted, issued and fully paid:
Number: Class: Nominal 2016 2015
value: £'000 £'000
1,350,000 Ordinary £1 1,350 1,350

16. RESERVES

Share capital
This reserve represents the capital investment by the parent undertaking.

Retained earnings
This reserve represents the cumulative comprehensive income recognised in the company, less any dividends
paid.

17. PENSION COMMITMENTS

The company does not operate its own independent pension fund but operates a group personal pension scheme
open to all employees. The assets of the scheme are held separately from those of the company in an
independently administered fund. The pension cost charge represents contributions payable by the company to
the fund and amounted to £190,765 (2015 - £92,644). Contributions totalling £19,306 (2015 - £12,958) were
payable to the fund at the year end and are included in creditors.

18. CONTINGENT LIABILITIES

The group has a one year rolling facility of £10,000,000 with Hitachi Limited Treasury Department that is
repayable on demand. There are no fixed repayment terms and interest is in consideration of market rate.

Under certain contractual arrangements the company may have an option to buy back equipment from its
customers, once that equipment has served its purpose, typically after 3 years. The company potential buy-back
commitment in such circumstances will depend on the condition of the equipment. The directors are of the
opinion that despite being unable to reliably estimate such potential buy-back amounts, these arrangements do
not constitute any net liability to the company, since in normal circumstances the equipment can be re-sold at no
net cost to the company.

19. OTHER FINANCIAL COMMITMENTS

The group has derivative financial instruments, being forward foreign exchange contracts as at 31 March 2016
with an estimated value of £948,000 (2015 - £1,562,000). The fair value of the forward foreign exchange
contracts is recorded on the balance sheet (note 11).

20. RELATED PARTY DISCLOSURES

The company is a wholly owned subsidiary of Heavy Construction Machinery (Europe) NV and has taken
advantage of the exemption conferred by Financial Reporting Standard 101 with reference to IAS24 'Related
party disclosures' not to disclose transactions with other wholly owned subsidiaries within the group.

During the year, the group purchased parts, on an arm's length basis, with a purchase value of £104,600 (2015
- £165,980) and made sales on an arms length basis with a sales value of £4,366 (2015 - nil) from/to LDH
Attachments Limited, an entity in which D Hearne's wife is the proprietor. £9,000 (2015 - £12,000) was due to
the entity and £90 (2015 - nil) was due from the entity at 31 March 2016.

Hitachi Construction Machinery (UK)
Limited (Registered number: 01082975)

Notes to the Financial Statements - continued
for the Year Ended 31 March 2016

21. ULTIMATE CONTROLLING PARTY

The immediate parent undertaking and controlling party is Hitachi Construction Machinery (Europe) NV, who
are owned by Hitachi Construction Machinery Limited in Japan. On 05/01/2016 Hitachi Construction
Machinery (Europe) NV acquired 100% of the share capital of the company from Heavy Machinery Group
Limited, which was the immediate UK parent and controlling party up until that date.

Hitachi Construction Machinery Limited are owned 50+% by Hitachi Limited with a remainder of the shares
open to the public through their listing on the stock exchange. Hitachi Limited is therefore the ultimate parent
undertaking.

22. TRANSITION TO FRS 101

The company transitioned to FRS 101 from previously extant UK GAAP as at 1 April 2014.

The impact from the transition to FRS 101 is as follows:

Reconciliation of reserves at 1 April 2014
2014
£'000

Reserves at 1 April 2014 under previous UK GAAP 21,547
Recognition of deferred tax on rolled over gains (391 )
Reserves at 1 April 2014 under FRS 101 21,156

Reconciliation of reserves at 31 March 2015
2015
£'000

Reserves at 31 March 2015 under previous UK GAAP 25,106
Recognition of deferred tax on rolled over gains (371 )
Reserves at 31 March 2015 under FRS 101 24,735

Reconciliation of the income statement for the year ended 31 March 2015
2015
£'000

Reserves at 31 March 2015 under previous UK GAAP 7,703
Recognition of deferred tax on rolled over gains 20
Reserves at 31 March 2015 under FRS 101 7,723