1.2 Statement of compliance

1.2.1 New standards and interpretations effective as of 1 January 2025

Where applicable, Hydratec applied new and amended IFRS standards and IFRIC interpretations relevant to the company during the financial year. The new standards and amendments to existing standards in 2025 do not directly affect the Group’s equity and results and the notes to the financial statements.

1.2.2 New standards or interpretations which have not yet taken effect

At the end of 2025, several new and amended standards and interpretations were published, but were not yet effective at the time of publication of these financial statements. Hydratec will apply these new and amended standards and interpretations as soon as they become effective. The published new and amended IFRS standards and IFRIC interpretations that are not yet effective for reporting periods beginning on 1 January 2025 have not been prematurely adopted. This concerns the following standards or amendments thereto:

• In May 2024, the IASB published “Amendments to IFRS 9 and IFRS 7, Amendments to the Classification and Measurement of Financial Instruments”. The amendments to IFRS 9, which apply to financial years beginning on or after 1 January 2026, address two more pressing issues: the settlement of financial liabilities using an electronic payment system and the assessment of the contractual cash flow characteristics of financial assets, including those with environmental, social and governance (ESG) related characteristics.
  
  Changes were also made for non-recourse assets and contractually linked instruments. In addition, changes to the explanatory notes are proposed for equity instruments at fair value, with changes in value recognised in shareholders’ equity through other comprehensive income (OCI) and financial instruments with contractual terms that refer to a contingent event, including those related to ESG.

• On 18 December 2025, the IASB published amendments to IFRS 9 and IFRS 7, which apply to financial years beginning on or after 1 January 2026. These amendments relate to contracts referencing nature-dependent electricity. These amendments address how the “own-use” requirement should be applied, hedge accounting in cases where these contracts are used as hedging instruments and additional explanatory requirements around nature-dependent electricity contracts.
  
  Hydratec Industries N.V. does not use nature-dependent electricity contracts; therefore, these standards will not be applicable.
  
  

• From 1 January 2027, the new standard IFRS 18 must be applied, replacing the current standard IAS 1. The introduction of IFRS 18 prescribes a model to improve the way information is communicated in the financial statements, with a focus on the information in the statement of profit or loss.
  
  IFRS 18 describes which items can be included in the statement of profit or loss, but unlike IAS 1.82, this list is no longer defined as “minimum line items”. In addition, IFRS 18 provides requirements to determine when additional items should be added to the statement of profit or loss and when this is not deemed necessary.
  
  The new requirements under IFRS 18 require entities to classify all their income and expenses within the statement of profit or loss in one of the following categories: operating, investing, financing, income taxes or discontinued operations. The first three categories are new, and the last two categories already existed under the current requirements under IAS 1. In addition to the fact that income and expenses under IFRS 18 must be classified into one of the above categories, entities are also required to add subtotals on the statement of profit or loss for “operating profit or loss”, “profit or loss before financing and income taxes” and “profit or loss”. The purpose of the new classification and subtotals is to improve comparability between companies.
  
  IFRS 18 also introduces a new concept: management performance measures (MPMs). These should be included in a separate section of the notes. MPMs are subtotals of costs and proceeds that are used in public communications outside the financial statements; they are supplementary to the totals and subtotals as specified by IFRS and communicate management’s view of an aspect of financial performance. 
  
  IFRS 18 also introduces some changes to IAS 7 regarding the cash flow statement. The main changes are:
  - a consistent starting point if the cash flow from operating activities is determined using the indirect method; and
  - no more options regarding the classification of interest and dividends paid and received.
  
  The assessment of the impact of the new IFRS 18 standard will be carried out in 2026.
  
  

• In May 2024, the IASB issued IFRS 19 “Subsidiaries without Public Accountability: Disclosures”. IFRS 19 allows eligible entities to opt for reduced disclosure requirements relating to share-based payments (IFRS 19.31-34). This applies to reporting periods beginning on or after 1 January 2027.