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Registered number: 13035862








EXCHANGER INDUSTRIES UK LIMITED AND ITS SUBSIDIARIES
 
ANNUAL REPORT AND FINANCIAL STATEMENTS

 
FOR THE YEAR ENDED 31 DECEMBER 2022

 
EXCHANGER INDUSTRIES UK LIMITED AND ITS SUBSIDIARIES
 

COMPANY INFORMATION


Directors
M. El Baroudi 
J. Thomas 
D. Williamson 




Registered number
13035862



Registered office
3 Abloy House
Hatters Lane

Watford

Hertfordshire

WD18 8AJ




Independent auditors
Wilder Coe Ltd
Chartered Accountants & Statutory Auditors

1st Floor Sackville House

143-149 Fenchurch Street

London

EC3M 6BL





 
EXCHANGER INDUSTRIES UK LIMITED AND ITS SUBSIDIARIES
 

CONTENTS



Page
Group Strategic Report
 
1 - 2
Directors' Report
 
3 - 4
Independent Auditors' Report
 
5 - 8
Consolidated Statement of Comprehensive Income
 
9
Consolidated Balance Sheet
 
10 - 11
Company Balance Sheet
 
12
Consolidated Statement of Changes in Equity
 
13
Company Statement of Changes in Equity
 
14
Consolidated Statement of Cash Flows
 
15 - 16
Consolidated Analysis of Net Debt
 
17
Notes to the Financial Statements
 
18 - 36


 
EXCHANGER INDUSTRIES UK LIMITED AND ITS SUBSIDIARIES
 

GROUP STRATEGIC REPORT
FOR THE YEAR ENDED 31 DECEMBER 2022

Introduction

Exchanger Industries UK Limited has its head office in the UK and is the immediate parent company of HRS Investments Ltd and its subsidiaries. The Company also directly holds the remaining minority shareholding not held by HRS Investments Ltd in HRS Process Systems Ltd, an Indian company.
The Company was incorporated on the 20th November 2020. On the 20th July 2021, the Company purchased a 100% shareholding in HRS Investments Ltd, along with a 14% shareholding in HRS Process Systems Ltd. The purchase of these investments was financed by the issue of shares, a long term bank loan, and other third party short term loans.
HRS Investments Ltd is the parent company for a number of worldwide subsidiaries in the UK, India, Spain, USA, Malaysia, Australia, and New Zealand, primarily involved in the engineering, design, procurement, and manufacture of heat exchanger equipment and process systems throughout the world.

Business review
 
Group turnover was £43.1m in 2022 with profit before tax of £2.4m. This compared to turnover of £12.7m and profit before tax of £1.3m for the post acquisition period in 2021.
The Group experienced growth in all its key markets during 2022 with an overall growth rate in excess of 50% on the pro-rata 2021 revenues.
Issues with general worldwide supply chain disruptions and price increases were well managed through close liaison and cooperation with key suppliers and customers.
Outlook
The Group continues to put an emphasis on both the management of global international customers and local management of domestic customers in each region in which it operates to grow revenues. The Group understands that customers’ requirements may vary, and works with each customer to try and provide the best solution for each customer based upon their circumstances.
Revenues have continued to grow in the first half of 2023, particularly in India and Europe, and the Group has added additional resources throughout the world to drive future growth.

Principal risks and uncertainties

The principal risks and uncertainties affecting the Company primarily relate to worldwide economic conditions affecting its subsidiaries which may affect the level of capital expenditures undertaken by customers across the world.
The Company has a long term loan based upon SONIA overnight interest rates and is therefore affected by UK interest rates.
In addition, currency fluctuations will affect the profitability of the Company through the translation of Indian Rupees, Euros, and United States Dollar transactions back into Sterling.


Financial key performance indicators

The Group’s key financial aims are to grow turnover and operating profits year on year. During 2022 the Group achieved these aims.
The Company looks to ensure that all covenants and repayments on its outstanding loans are met. During 2022 the Company achieved these aims.

Page 1

 
EXCHANGER INDUSTRIES UK LIMITED AND ITS SUBSIDIARIES
 

GROUP STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022

Other key performance indicators

The retaining of good quality staff is key to the Group’s success. To achieve this, the Group continuously reviews the level of salaries against local market rates. The Group also encourages performance by clearly structured and defined bonus schemes. During 2022, the Group had a 100% retention rate for employees within its senior management teams.
The Group’s focus is on providing customers with quality, technologically advanced, environmentally efficient, value for money products and services. Maintaining and enhancing the Group’s reputation is essential to the future success of the business. The aim of the Group is to build key relationships with relevant industry sectors and customers to increase the amount of repeat business generated.


This report was approved by the board on 29 September 2023 and signed on its behalf.



J. Thomas
Director

Page 2

 
EXCHANGER INDUSTRIES UK LIMITED AND ITS SUBSIDIARIES
 

 
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 DECEMBER 2022

The directors present their report and the audited financial statements for the year ended 31 December 2022.

Directors' responsibilities statement

The directors are responsible for preparing the Group Strategic Report, the Directors' Report and the consolidated 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 applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice), including Financial Reporting Standard 102 ‘The Financial Reporting Standard applicable in the UK and Republic of Ireland'. Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the Company and the Group and of the profit or loss of the Group for that period.

 In preparing these financial statements, the directors are required to:


select suitable accounting policies for the Group's financial statements and then apply them consistently;

make judgments and accounting estimates that are reasonable and prudent; and

prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Group 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 the Group and to enable them to ensure that the financial statements comply with the Companies Act 2006They are also responsible for safeguarding the assets of the Company and the Group and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

Disclosure of information to auditors

Each of the persons who are directors at the time when this Directors' Report is approved has confirmed that:
 
so far as the director is aware, there is no relevant audit information of which the Company and the Group's auditors are unaware, and

the director has taken all the steps that ought to have been taken as a director in order to be aware of any relevant audit information and to establish that the Company and the Group's auditors are aware of that information.

Principal activity

The principal activity of the Group is that of process engineering.

Directors

The directors who served during the year were:

M. El Baroudi 
J. Thomas 

Post year end, the following director was appointed: 
D. Williamson (appointed 19 April 2023)
 
Page 3

 
EXCHANGER INDUSTRIES UK LIMITED AND ITS SUBSIDIARIES
 

 
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022


Auditors

The auditorsWilder Coe Ltdwill be proposed for reappointment in accordance with section 485 of the Companies Act 2006.

This report was approved by the board 29 September 2023 and signed on its behalf.
 





J. Thomas
Director

Page 4

 
EXCHANGER INDUSTRIES UK LIMITED AND ITS SUBSIDIARIES
 

 
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF EXCHANGER INDUSTRIES UK LIMITED AND ITS SUBSIDIARIES
 

Opinion


We have audited the financial statements of Exchanger Industries UK Limited (the 'parent Company') and its subsidiaries (the 'Group') for the year ended 31 December 2022, which comprise the Consolidated Statement of Comprehensive Income, the Consolidated Balance Sheet, the Company Balance Sheet, the Consolidated Statement of Cash Flows, the Consolidated Statement of Changes in Equity, the Company Statement of Changes in Equity and the related notes, including a summary of significant accounting policiesThe 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 Group's and of the parent Company's affairs as at 31 December 2022 and of the Group's 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.


Basis for opinion


We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditors' responsibilities for the audit of the financial statements section of our report. We are independent of the Group 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.


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 Group's or the parent 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.


Page 5

 
EXCHANGER INDUSTRIES UK LIMITED AND ITS SUBSIDIARIES
 

 
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF EXCHANGER INDUSTRIES UK LIMITED AND ITS SUBSIDIARIES (CONTINUED)


Other information


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 ReportOur 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.


Opinion on other matters prescribed by the Companies Act 2006
 

In our opinion, based on the work undertaken in the course of the audit:


the information given in the Group 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 Group Strategic Report and the Directors' Report have been prepared in accordance with applicable legal requirements.


Matters on which we are required to report by exception
 

In the light of the knowledge and understanding of the Group and the parent Company and its environment obtained in the course of the audit, we have not identified material misstatements in the Group 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 by the parent Company, or returns adequate for our audit have not been received from branches not visited by us; or
the parent Company financial statements are not in agreement with the accounting records and returns; or
certain disclosures of directors' remuneration specified by law are not made; or
we have not received all the information and explanations we require for our audit.


Responsibilities of directors
 

As explained more fully in the Directors' Responsibilities Statement set out on page 3, 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 Group's and the parent 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 Group or the parent Company or to cease operations, or have no realistic alternative but to do so.


Page 6

 
EXCHANGER INDUSTRIES UK LIMITED AND ITS SUBSIDIARIES
 

 
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF EXCHANGER INDUSTRIES UK LIMITED AND ITS SUBSIDIARIES (CONTINUED)


Auditors' 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 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 Group 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:

Discussions with and enquiries of management and those charged with governance were held with a view to identifying those laws and regulations that could be expected to have a material impact on the financial statements. During the engagement team briefing, the outcomes of these discussions and enquiries were shared with the team, as well as consideration as to where and how fraud may occur in the entity.
 
The following laws and regulations were identified as being of significance to the entity:
 
Those laws and regulations considered to have a direct effect on the financial statements include UK financial reporting standards, company law, tax and pensions legislation and distributable profits legislation.
 
Those laws and regulations for which non-compliance may be fundamental to the operating aspects of the business and therefore may have a material effect on the financial statements include employment legislation.
 
Audit procedures undertaken in response to the potential risks relating to irregularities (which include fraud and non-compliance with laws and regulations) comprised of: enquiries of management and those charged with governance as to whether the entity complies with such laws and regulations; enquiries with the same concerning any actual or potential litigation or claims; inspection of relevant legal correspondence; review of board minutes; testing the appropriateness of journal entries; and the performance of analytical review to identify unexpected movements in account balances which may be indicative of fraud.
No instances of material non-compliance were identified. However, the likelihood of detecting irregularities, including fraud, is limited by the inherent difficulty in detecting irregularities, the effectiveness of the entity’s controls, and the nature, timing and extent of the audit procedures performed. Irregularities that result from fraud might be inherently more difficult to detect than irregularities that result from error. As explained above, there is an unavoidable risk that material misstatements may not be detected, even though the audit has been planned and performed in accordance with ISAs (UK).


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.


Page 7

 
EXCHANGER INDUSTRIES UK LIMITED AND ITS SUBSIDIARIES
 

 
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF EXCHANGER INDUSTRIES UK LIMITED AND ITS SUBSIDIARIES (CONTINUED)


Use of our report
 

This report is made solely to the Company's members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006Our 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.




Charlotte Wilmore BFP ACA (Senior Statutory Auditor)
for and behalf of





Wilder Coe Ltd
Chartered Accountants & Statutory Auditors
1st Floor Sackville House
143-149 Fenchurch Street
London
EC3M 6BL

Date: 29 September 2023
Page 8

 
EXCHANGER INDUSTRIES UK LIMITED AND ITS SUBSIDIARIES
 

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2022

Year ended
31 December
Period ended
31 December
2022
2021
Note
£
£

  

Turnover
 3 
43,113,583
12,660,408

Cost of sales
  
(26,803,725)
(8,445,155)

Gross profit
  
16,309,858
4,215,253

Other operating income
  
339,906
5,671

Administrative expenses
  
(13,205,300)
(2,798,555)

Exceptional items
 4 
(402,863)
-

Operating profit
 5 
3,041,601
1,422,369

Interest receivable and similar income
  
52,292
96,573

Interest payable and similar expenses
 7 
(674,039)
(251,179)

Profit on ordinary activities before taxation
  
2,419,854
1,267,763

Taxation on profit on ordinary activities
 8 
(1,658,600)
(513,934)

Profit for the financial year/period
  
761,254
753,829

Foreign exchange reserve movements
  
33,585
23,492

Other comprehensive income for the year/period
  
33,585
23,492

Total comprehensive income for the year/period
  
794,839
777,321

Profit for the year/period attributable to:
  

Owners of the parent Company
  
761,254
753,829

  
761,254
753,829

Total comprehensive income for the year/period attributable to:
  

Owners of the parent Company
  
794,839
777,321

  
794,839
777,321

The notes on pages 18 to 36 form part of these financial statements.

Page 9

 
EXCHANGER INDUSTRIES UK LIMITED AND ITS SUBSIDIARIES
REGISTERED NUMBER: 13035862

CONSOLIDATED BALANCE SHEET
AS AT 31 DECEMBER 2022

2022
2021
Note
£
£

Fixed assets
  

Intangible assets
 9 
13,920,838
15,484,337

Tangible assets
 10 
2,428,579
2,529,961

  
16,349,417
18,014,298

Current assets
  

Stocks
 12 
10,036,787
6,166,478

Debtors: amounts falling due after more than one year
 13 
-
76,339

Debtors: amounts falling due within one year
 13 
13,056,566
7,630,788

Cash at bank and in hand
 14 
3,829,181
5,724,835

  
26,922,534
19,598,440

Creditors: amounts falling due within one year
 15 
(20,178,145)
(15,329,351)

Net current assets
  
 
 
6,744,389
 
 
4,269,089

Total assets less current liabilities
  
23,093,806
22,283,387

Creditors: amounts falling due after more than one year
 16 
(10,688,780)
(11,143,876)

Provisions for liabilities
  

Deferred taxation
 18 
(215,527)
(222,714)

Other provisions
 19 
(477,863)
-

  
 
 
(693,390)
 
 
(222,714)

Net assets
  
11,711,636
10,916,797


Capital and reserves
  

Allotted, called up and fully paid share capital
 20 
1,201
1,201

Share premium account
 21 
10,209,453
10,209,453

Foreign exchange reserve
 21 
57,077
23,492

Profit and loss account
 21 
1,443,905
682,651

Equity shareholders' funds
  
11,711,636
10,916,797


Page 10

 
EXCHANGER INDUSTRIES UK LIMITED AND ITS SUBSIDIARIES
REGISTERED NUMBER: 13035862

CONSOLIDATED BALANCE SHEET (CONTINUED)
AS AT 31 DECEMBER 2022

The financial statements were approved and authorised for issue by the board and were signed on its behalf on 29 September 2023.




J. Thomas
Director
The notes on pages 18 to 36 form part of these financial statements.

Page 11

 
EXCHANGER INDUSTRIES UK LIMITED AND ITS SUBSIDIARIES
REGISTERED NUMBER: 13035862

COMPANY BALANCE SHEET
AS AT 31 DECEMBER 2022

2022
2021
Note
£
£

Fixed assets
  

Investments
 11 
22,492,298
22,492,298

Current assets
  

Debtors: amounts falling due after more than one year
 13 
-
76,339

Debtors: amounts falling due within one year
 13 
48,621
131,971

Cash at bank and in hand
 14 
169,896
50,652

  
218,517
258,962

Creditors: amounts falling due within one year
 15 
(4,836,941)
(4,323,543)

Net current liabilities
  
 
 
(4,618,424)
 
 
(4,064,581)

Total assets less current liabilities
  
17,873,874
18,427,717

Creditors: amounts falling due after more than one year
 16 
(7,976,101)
(8,596,497)

Net assets
  
9,897,773
9,831,220


Capital and reserves
  

Allotted, called up and fully paid share capital
 20 
1,201
1,201

Share premium account
 21 
10,209,453
10,209,453

Profit and loss account brought forward
  
(379,434)
-

Profit/(loss) for the year/period

  

66,553
(379,434)

Profit and loss account carried forward
  
(312,881)
(379,434)

Equity shareholders' funds
  
9,897,773
9,831,220


The financial statements were approved and authorised for issue by the board and were signed on its behalf on 29 September 2023.


J. Thomas
Director
The notes on pages 18 to 36 form part of these financial statements.

Page 12

 
EXCHANGER INDUSTRIES UK LIMITED AND ITS SUBSIDIARIES
 

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2022


Share capital
Share premium account
Foreign exchange reserve
Retained earnings
Total equity

£
£
£
£
£

At 1 January 2022
1,201
10,209,453
23,492
682,651
10,916,797


Comprehensive income for the year

Profit for the year
-
-
-
761,254
761,254

Currency translation differences
-
-
33,585
-
33,585


At 31 December 2022
1,201
10,209,453
57,077
1,443,905
11,711,636



CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2021


Share capital
Share premium account
Foreign exchange reserve
Retained earnings
Total equity

£
£
£
£
£


Comprehensive income for the period

Profit for the period
-
-
-
753,829
753,829

Currency translation differences
-
-
23,492
-
23,492


Contributions by and distributions to owners

Dividends: Equity capital
-
-
-
(71,178)
(71,178)

Shares issued during the period
1,201
10,209,453
-
-
10,210,654


At 31 December 2021
1,201
10,209,453
23,492
682,651
10,916,797


The notes on pages 18 to 36 form part of these financial statements.

Page 13

 
EXCHANGER INDUSTRIES UK LIMITED AND ITS SUBSIDIARIES
 

COMPANY STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2022


Share capital
Share premium account
Retained earnings
Total equity

£
£
£
£

At 1 January 2022
1,201
10,209,453
(379,434)
9,831,220


Comprehensive income for the period

Profit for the year
-
-
66,553
66,553


At 31 December 2022
1,201
10,209,453
(312,881)
9,897,773



COMPANY STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2021


Share capital
Share premium account
Retained earnings
Total equity

£
£
£
£


Comprehensive income for the period

Loss for the period
-
-
(379,434)
(379,434)


Contributions by and distributions to owners

Shares issued during the period
1,201
10,209,453
-
10,210,654


At 31 December 2021
1,201
10,209,453
(379,434)
9,831,220


The notes on pages 18 to 36 form part of these financial statements.

Page 14

 
EXCHANGER INDUSTRIES UK LIMITED AND ITS SUBSIDIARIES
 

CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 DECEMBER 2022

Year ended 31 December 2022
Period ended 31 December 2021
£
£

Cash flows from operating activities

Profit for the financial year/period
761,254
753,829

Adjustments for:

Depreciation/amortisation of assets
2,027,862
753,843

Interest paid
674,039
251,179

Interest received
(52,292)
(96,573)

Corporation tax charge
1,665,787
513,934

Deferred tax
(7,187)
-

Increase in stocks
(3,870,309)
(1,812,565)

Increase in debtors
(5,349,439)
(1,759,398)

Increase in creditors
4,559,658
6,939,744

Increase in provisions
477,863
-

Corporation tax paid
(1,359,247)
(608,276)

Foreign exchange movements
33,585
23,492

Net cash generated from operating activities

(438,426)
4,959,209


Cash flows from investing activities

Purchase of intangible fixed assets
(74,594)
-

Purchase of tangible fixed assets
(281,458)
(8,983)

Sale of tangible fixed assets
30,044
7,905

Interest received
52,292
96,573

Foreign exchange movements
(36,973)
8,123

Acquisitions, net of cash acquired
-
(18,226,289)

Net cash from investing activities

(310,689)
(18,122,671)
Page 15

 
EXCHANGER INDUSTRIES UK LIMITED AND ITS SUBSIDIARIES
 

CONSOLIDATED STATEMENT OF CASH FLOWS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022


2022
2021

£
£



Cash flows from financing activities

Issue of ordinary shares
-
10,210,654

New loans
-
9,000,000

Repayment of loans
(472,500)
-

Dividends paid
-
(71,178)

Interest paid
(674,039)
(251,179)

Net cash (generated)/used in financing activities
(1,146,539)
18,888,297

Net (decrease)/increase in cash and cash equivalents
(1,895,654)
5,724,835

Cash and cash equivalents at beginning of year
5,724,835
-

Cash and cash equivalents at the end of year
3,829,181
5,724,835


Cash and cash equivalents at the end of year comprise:

Cash at bank and in hand
3,829,181
5,724,835

3,829,181
5,724,835


The notes on pages 18 to 36 form part of these financial statements.

Page 16

 
EXCHANGER INDUSTRIES UK LIMITED AND ITS SUBSIDIARIES
 

CONSOLIDATED ANALYSIS OF NET DEBT
FOR THE YEAR ENDED 31 DECEMBER 2022




At 1 
January
2022
Cash flows
At 31 December 2022
£

£

£

Cash at bank and in hand

5,724,835

(1,895,654)

3,829,181

Debt due within 1 year

(630,000)

(157,500)

(787,500)

Debt due after 1 year

(8,370,000)

630,000

(7,740,000)


(3,275,165)
(1,423,154)
(4,698,319)

The notes on pages 18 to 36 form part of these financial statements.

Page 17

 
EXCHANGER INDUSTRIES UK LIMITED AND ITS SUBSIDIARIES
 

 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022

1.


General information

Exchanger Industries UK Limited (company number: 13035862), having its registered office and principal place of business at 3 Abloy House, Hatters Lane, Watford, Hertfordshire, WD18 8AJ, is a private limited company incorporated in England and Wales.

2.Accounting policies

 
2.1

Basis of preparation of financial statements

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 Group management to exercise judgment in applying the Group's accounting policies.

The Company has taken advantage of the exemption allowed under section 408 of the Companies Act 2006 and has not presented its own Statement of Comprehensive Income in these financial statements.

The Company has taken advantage of the exemption permitted by the FRS 102 "The Financial Reporting Standard applicable in the UK and Republic of Ireland" Section 7 'Statement of Cash Flows' to not separately prepare a Cash flow statement." - Where no single entity cashflow is prepared.

The following principal accounting policies have been applied:

 
2.2

Basis of consolidation

The consolidated financial statements present the results of the Company and its own subsidiaries ("the Group") as if they form a single entity. Intercompany transactions and balances between group companies are therefore eliminated in full.
The consolidated financial statements incorporate the results of business combinations using the purchase method. In the Balance Sheet, the acquiree's identifiable assets, liabilities and contingent liabilities are initially recognised at their fair values at the acquisition date. The results of acquired operations are included in the Consolidated Statement of Comprehensive Income from the date on which control is obtained. They are deconsolidated from the date control ceases.

Page 18

 
EXCHANGER INDUSTRIES UK LIMITED AND ITS SUBSIDIARIES
 

 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022

2.Accounting policies (continued)

 
2.3

Turnover

Turnover is recognised to the extent that it is probable that the economic benefits will flow to the Group and the turnover can be reliably measured. Turnover is measured as the fair value of the consideration received or receivable, excluding discounts, rebates, value added tax and other sales taxes. The following criteria must also be met before turnover is recognised:

Sale of goods

Turnover from the sale of goods is recognised when all of the following conditions are satisfied:
the Group has transferred the significant risks and rewards of ownership to the buyer;
the Group retains neither continuing managerial involvement to the degree usually associated with ownership nor effective control over the goods sold;
the amount of turnover can be measured reliably;
it is probable that the Group will receive the consideration due under the transaction; and
the costs incurred or to be incurred in respect of the transaction can be measured reliably.

Rendering of services

Turnover from a contract to provide services is recognised in the period in which the services are provided in accordance with the stage of completion of the contract when all of the following conditions are satisfied:
the amount of turnover can be measured reliably;
it is probable that the Group will receive the consideration due under the contract.

 
2.4

Intangible fixed assets and amortisation

Goodwill

Goodwill represents the difference between amounts paid on the cost of a business combination and the acquirer’s interest in the fair value of the Group's share of its identifiable assets and liabilities of the acquiree at the date of acquisition. Subsequent to initial recognition, goodwill is measured at cost less accumulated amortisation and accumulated impairment losses. Goodwill is amortised on a straight-line basis to the Consolidated Statement of Comprehensive Income over its useful economic life.

Product & website development and patents

Product & website development and patents are stated at cost and amortised to the Consolidated Statement of Comprehensive Income over their estimated economic life.

Page 19

 
EXCHANGER INDUSTRIES UK LIMITED AND ITS SUBSIDIARIES
 

 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022

2.Accounting policies (continued)

 
2.5

Tangible fixed assets and depreciation

Tangible fixed assets under the cost model are stated at historical cost less accumulated depreciation and any accumulated impairment losses. Historical cost includes expenditure that is directly attributable to bringing the asset to the location and condition necessary for it to be capable of operating in the manner intended by management.

Depreciation is charged so as to allocate the cost of assets less their residual value over their estimated useful lives, on a reducing balance or straight-line basis. 

Depreciation is provided on the following basis:

Freehold land and buildings
-
Buildings 2% straight-line. Land is not depreciated
Short-term leasehold property
-
straight line over the term of lease
Plant and machinery
-
10-33% straight line
Motor vehicles
-
25% reducing balance
Fixtures, fittings & equipment
-
20-33% straight line

The assets' residual values, useful lives and depreciation methods are reviewed, and adjusted prospectively if appropriate, or if there is an indication of a significant change since the last reporting date.

Gains and losses on disposals are determined by comparing the proceeds with the carrying amount and are recognised in the Consolidated Statement of Comprehensive Income.

 
2.6

Operating leases: the Group as lessee

Rentals paid under operating leases are charged to the Consolidated Statement of Comprehensive
Income on a straight-line basis over the lease term.

Benefits received and receivable as an incentive to sign an operating lease are recognised on a straight-line basis over the lease term, unless another systematic basis is representative of the time pattern of the lessee's benefit from the use of the leased asset.

 
2.7

Valuation of investments

Investments in subsidiaries are measured at cost less accumulated impairment.

 
2.8

Stocks and work in progress

Stocks are stated at the lower of cost and net realisable value, being the estimated selling price less costs to complete and sell. Work in progress and finished goods include labour and attributable overheads.

At each Balance Sheet date, stocks are assessed for impairment. If stock is impaired, the carrying amount is reduced to its selling price less costs to complete and sell. The impairment loss is recognised immediately in profit or loss.

 
2.9

Debtors

Short-term debtors are measured at transaction price, less any impairment. 

Page 20

 
EXCHANGER INDUSTRIES UK LIMITED AND ITS SUBSIDIARIES
 

 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022

2.Accounting policies (continued)

 
2.10

Cash and cash equivalents

Cash is represented by cash in hand and deposits with financial institutions repayable without penalty on notice of not more than 24 hours. Cash equivalents are highly liquid investments that mature in no more than three months from the date of acquisition and that are readily convertible to known amounts of cash with insignificant risk of change in value.

In the Consolidated Statement of Cash Flows, cash and cash equivalents are shown net of bank overdrafts that are repayable on demand and form an integral part of the Group's cash management.

 
2.11

Financial instruments

The Group has elected to apply the provisions of Section 11 “Basic Financial Instruments” of FRS 102 to all of its financial instruments.

The Group has elected to apply the recognition and measurement provisions of IFRS 9 Financial Instruments (as adopted by the UK Endorsement Board) with the disclosure requirements of Sections 11 and 12 and the other presentation requirements of FRS 102.

Financial instruments are recognised in the Group's Balance Sheet when the Group becomes party to the contractual provisions of the instrument.

Financial assets and liabilities are offset, with the net amounts presented in the financial statements, when there is a legally enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously.

Basic financial assets

Basic financial assets, which include trade and other receivables, cash and bank balances, are initially measured at their transaction price including transaction costs and are subsequently carried at their amortised cost using the effective interest method, less any provision for impairment, unless the arrangement constitutes a financing transaction, where the transaction is measured at the present value of the future receipts discounted at a market rate of interest.

Discounting is omitted where the effect of discounting is immaterial. The Group's cash and cash equivalents, trade and most other receivables due with the operating cycle fall into this category of financial instruments.

Impairment of financial assets

Financial assets are assessed for indicators of impairment at each reporting date. 

Financial assets are impaired when events, subsequent to their initial recognition, indicate the estimated future cash flows derived from the financial asset(s) have been adversely impacted. The impairment loss will be the difference between the current carrying amount and the present value of the future cash flows at the asset(s) original effective interest rate.

If there is a favourable change in relation to the events surrounding the impairment loss then the impairment can be reviewed for possible reversal. The reversal will not cause the current carrying amount to exceed the original carrying amount had the impairment not been recognised. The impairment reversal is recognised in the Consolidated Statement of Comprehensive Income.

Financial liabilities

Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. 

Page 21

 
EXCHANGER INDUSTRIES UK LIMITED AND ITS SUBSIDIARIES
 

 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022

2.Accounting policies (continued)


2.11
Financial instruments (continued)

Basic financial liabilities, which include trade and other payables, bank loans, other loans and loans due to fellow group companies are initially measured at their transaction price after transaction costs. When this constitutes a financing transaction, whereby the debt instrument is measured at the present value of the future receipts discounted at a market rate of interest. Discounting is omitted where the effect of discounting is immaterial.

Debt instruments are subsequently carried at their amortised cost using the effective interest rate method.

Trade payables are obligations to pay for goods and services that have been acquired in the ordinary course of business from suppliers. Trade payables are classified as current liabilities if the payment is due within one year. If not, they represent non-current liabilities. Trade payables are initially recognised at their transaction price and subsequently are measured at amortised cost using the effective interest method. Discounting is omitted where the effect of discounting is immaterial.

Derecognition of financial instruments

Derecognition of financial assets

Financial assets are derecognised when their contractual right to future cash flow expire, or are settled, or when the Group transfers the asset and substantially all the risks and rewards of ownership to another party. If significant risks and rewards of ownership are retained after the transfer to another party, then the Group will continue to recognise the value of the portion of the risks and rewards retained.

Derecognition of financial liabilities

Financial liabilities are derecognised when the Group's contractual obligations expire or are discharged or cancelled.

 
2.12

Creditors

Short-term creditors are measured at the transaction price.

 
2.13

Finance costs

Finance costs are charged to the Consolidated Statement of Comprehensive Income over the term of the debt using the effective interest method so that the amount charged is at a constant rate on the carrying amount. Issue costs are initially recognised as a reduction in the proceeds of the associated capital instrument.

 
2.14

Dividends

Equity dividends are recognised when they become legally payable. Interim equity dividends are recognised when paid. Final equity dividends are recognised when approved by the shareholders at an annual general meeting.

Page 22

 
EXCHANGER INDUSTRIES UK LIMITED AND ITS SUBSIDIARIES
 

 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022

2.Accounting policies (continued)

 
2.15

Pensions

Defined contribution pension plan

The Group operates a defined contribution plan for its employees. A defined contribution plan is a pension plan under which the Group pays fixed contributions into a separate entity. Once the contributions have been paid the Group has no further payment obligations.

The contributions are recognised as an expense in profit or loss when they fall due. Amounts not paid are shown in accruals as a liability in the Consolidated Balance Sheet. The assets of the plan are held separately from the Group in independently administered funds.

 
2.16

Interest income

Interest income is recognised in the Consolidated Statement of Comprehensive Income using the effective interest method.

 
2.17

Current and deferred taxation

The tax expense for the year comprises current and deferred tax. Tax is recognised in the Consolidated Statement of Comprehensive Income.

The current income tax charge is calculated on the basis of tax rates and laws that have been enacted or substantively enacted by the Balance Sheet date in the countries where the Company and the Group operate and generate income.

Deferred tax balances are recognised in respect of all timing differences that have originated but not reversed by the balance sheet date, except that:
The recognition of deferred tax assets is limited to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits;
Any deferred tax balances are reversed if and when all conditions for retaining associated tax allowances have been met; and
Where they relate to timing differences in respect of interests in subsidiaries, associates, branches and joint ventures and the Group can control the reversal of the timing differences and such reversal is not considered probable in the foreseeable future.

Deferred tax balances are not recognised in respect of permanent differences except in respect of business combinations. Deferred tax is determined using tax rates and laws that have been enacted or substantively enacted by the Balance Sheet date.

 
2.18

Exceptional items

Exceptional items are transactions that fall within the ordinary activities of the Group but are presented separately due to their size or incidence.

 
2.19

Onerous leases

Where the unavoidable costs of a lease exceed the economic benefit expected to be received from it, a provision is made for the present value of the obligations under the lease.

Page 23

 
EXCHANGER INDUSTRIES UK LIMITED AND ITS SUBSIDIARIES
 

 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022

3.


Turnover

The whole of the turnover is attributable to the principal activity of the Group, being that of process engineering.
Analysis of turnover by region of destination:


Year ended
31 December
Period ended
31 December
2022
2021
£
£

United Kingdom
8,174,463
2,657,656

Rest of Europe
4,500,280
1,182,596

North America
2,278,414
569,764

India
20,530,382
7,296,950

Rest of the World
7,630,044
953,442

43,113,583
12,660,408



4.


Exceptional items

Year ended
31 December
Period ended
31 December
2022
2021
£
£


Onerous lease provision
(477,863)
-

Profit on sale of business
75,000
-

(402,863)
-

On 30 December 2022, the trading business of two of the subsidiary companies was sold to a 3rd party meaning that those companies will no longer have a trade moving forward. The companies will remain in operation until all debts are received and liabilities paid, after which time they will be wound-up

Page 24

 
EXCHANGER INDUSTRIES UK LIMITED AND ITS SUBSIDIARIES
 

 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022

5.


Operating profit

The operating profit is stated after (crediting)/charging:

Year ended
31 December
Period ended
31 December
2022
2021
£
£

Depreciation of tangible fixed assets
389,114
73,595

Amortisation of intangible assets, including goodwill
1,638,748
680,248

Fees payable to the Group's auditor and its associates for the audit of the company's annual financial statements
25,000
25,000

Exchange differences
120,030
(280,530)

Other operating lease rentals
495,116
180,674

Auditor fees for the Company were £25,000 (2021: £25,000). 


6.


Employees

Staff costs, including directors' remuneration, were as follows:


Group
Group
Company
Company
Year ended 31 December 2022
Period ended 31 December 2021
Year ended 31 December 2022
Period ended 31 December 2021
£
£
£
£


Wages and salaries
5,698,938
2,258,659
-
-

Social security costs
551,437
295,848
-
-

Cost of defined contribution scheme
111,325
39,553
-
-

6,361,700
2,594,060
-
-


There was no directors' remuneration paid in the year/period (2021: £Nil).
The total cost to the Group of key management personnel was £767,851 (
2021: £300,474).

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



Group
Group
Company
Company
Year ended 31 December
Period ended 31 December
Year ended 31 December
Period ended 31 December
        2022
        2021
        2022
        2021
            No.
            No.
            No.
            No.









Directors
8
9
2
2



Employees
247
238
-
-

255
247
2
2

Page 25

 
EXCHANGER INDUSTRIES UK LIMITED AND ITS SUBSIDIARIES
 

 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022

7.


Interest payable and similar expenses

Year ended
31 December
Period ended
31 December
2022
2021
£
£


Bank interest payable
452,282
173,558

Other interest payable
221,757
77,621

674,039
251,179


8.


Taxation


Year ended
31 December
Period ended
31 December
2022
2021
£
£

Corporation tax


Current tax on profits for the year/period
1,240,265
420,605

Adjustments in respect of previous periods
(33,541)
32,865

Foreign tax


Foreign tax on income for the year/period
459,063
60,464

Total current tax
1,665,787
513,934

Deferred tax


Origination and reversal of timing differences
(7,187)
-

Total deferred tax
(7,187)
-


Taxation on profit on ordinary activities
1,658,600
513,934
Page 26

 
EXCHANGER INDUSTRIES UK LIMITED AND ITS SUBSIDIARIES
 

 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
 
8.Taxation (continued)


Factors affecting tax charge for the year/period

The tax assessed for the year/period is higher than (2021 - higher than) the standard rate of corporation tax in the UK of 19% (2021 - 19%). The differences are explained below:

Year ended
31 December
Period ended
31 December
2022
2021
£
£


Profit on ordinary activities before tax
2,419,854
1,267,763


Profit on ordinary activities multiplied by standard rate of corporation tax in the UK of 19% (2021 - 19%)
459,772
240,875

Effects of:


Expenses not deductible for tax purposes
87,262
699,103

Capital allowances for year/period in excess of depreciation
(1,921)
(850)

Adjustments to tax charge in respect of prior periods
(33,541)
32,865

Other timing differences leading to an decrease in taxation
-
(203,937)

Non-taxable income
-
(497,458)

Unrelieved tax losses carried forward
195,392
426,659

Movement on deferred tax
(5,688)
-

Other differences leading to an increase in the tax charge
300,408
(330,811)

Effects of different tax charges
287,021
149,668

Tax on dividends
401,406
-

Losses utilised
(31,511)
(2,180)

Total tax charge for the year/period
1,658,600
513,934


Factors that may affect future tax charges

There were cumulative taxable losses of £5,249,921 (period ended 31 December 2021: £4,387,388) available to carry forward and offset against future tax charges. 

Page 27

 
EXCHANGER INDUSTRIES UK LIMITED AND ITS SUBSIDIARIES
 

 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022

9.


Intangible assets

Group and Company





Patents
Product & website development
Goodwill
Total

£
£
£
£



Cost


At 1 January 2022
394,280
259,364
17,710,897
18,364,541


Additions
74,594
-
-
74,594


Disposals
-
-
(142,722)
(142,722)


Foreign exchange movement
19,165
-
-
19,165



At 31 December 2022

488,039
259,364
17,568,175
18,315,578



Amortisation


At 1 January 2022
363,405
259,364
2,257,435
2,880,204


Charge for the year
26,213
-
1,612,535
1,638,748


On disposals
-
-
(142,722)
(142,722)


Foreign exchange movement
18,510
-
-
18,510



At 31 December 2022

408,128
259,364
3,727,248
4,394,740



Net book value



At 31 December 2022
79,911
-
13,840,927
13,920,838



At 31 December 2021
30,875
-
15,453,462
15,484,337



Page 28

 
EXCHANGER INDUSTRIES UK LIMITED AND ITS SUBSIDIARIES
 

 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022

10.


Tangible fixed assets

Group






Freehold land and buildings
Short-term leasehold property
Motor vehicles
Plant and machinery
Fixtures, fittings & equipment

£
£
£
£
£



Cost


At 1 January 2022
2,307,617
82,998
229,002
598,558
813,573


Additions
-
-
18,971
207,996
54,491


Disposals
-
-
(15,573)
(223,103)
(36,226)


Exchange adjustments
37,265
1,322
6,761
3,096
20,427



At 31 December 2022

2,344,882
84,320
239,161
586,547
852,265



Depreciation


At 1 January 2022
482,013
36,247
107,095
347,808
528,624


Charge for the year
51,431
8,373
36,472
135,162
157,676


Disposals
-
-
(14,794)
(196,738)
(33,326)


Exchange adjustments
8,135
1,147
4,692
2,166
16,413



At 31 December 2022

541,579
45,767
133,465
288,398
669,387



Net book value



At 31 December 2022
1,803,303
38,553
105,696
298,149
182,878



At 31 December 2021
1,825,604
46,751
121,907
250,750
284,949
Page 29

 
EXCHANGER INDUSTRIES UK LIMITED AND ITS SUBSIDIARIES
 

 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022

           10.Tangible fixed assets (continued)


Total

£



Cost


At 1 January 2022
4,031,748


Additions
281,458


Disposals
(274,902)


Exchange adjustments
68,871



At 31 December 2022

4,107,175



Depreciation


At 1 January 2022
1,501,787


Charge for the year
389,114


Disposals
(244,858)


Exchange adjustments
32,553



At 31 December 2022

1,678,596



Net book value



At 31 December 2022
2,428,579



At 31 December 2021
2,529,961




The net book value of land and buildings may be further analysed as follows:


2022
2021
£
£

Long leasehold
1,803,303
1,825,604

Short leasehold
38,553
46,751

1,841,856
1,872,355


Page 30

 
EXCHANGER INDUSTRIES UK LIMITED AND ITS SUBSIDIARIES
 

 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022

11.


Investments

Company





Investments in subsidiary companies
Investments in associates
Total

£
£
£



Cost


At 1 January 2022 and 31 December 2022
20,898,738
1,593,560
22,492,298


Direct subsidiary undertaking


The following were direct subsidiaries of the Company:

Name

Registered office

Class of shares

Holding

HRS Investments Limited
3 Abloy House, Hatters Lane, Watford, Hertfordshire, WD18 8AJ
Ordinary
100%



Name
Aggregate of share capital and reserves
Profit

HRS Investments Limited
1,056,389
283,598

Page 31

 
EXCHANGER INDUSTRIES UK LIMITED AND ITS SUBSIDIARIES
 

 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022

Indirect subsidiary undertakings


The following were indirect subsidiaries of the Company 

Name

Registered office

Class of shares

Holding

HRS International Limited
3 Abloy House, Hatters Lane, Watford, Hertfordshire, WD18 8AJ
Ordinary
100%
HRS Heat Exchangers Limited
3 Abloy House, Hatters Lane, Watford, Hertfordshire, WD18 8AJ
Ordinary
100%
HRS Hevac Limited
3 Abloy House, Hatters Lane, Watford, Hertfordshire, WD18 8AJ
Ordinary
100%
Heatexchangerspares.com Limited
3 Abloy House, Hatters Lane, Watford, Hertfordshire, WD18 8AJ
Ordinary
100%
HRS Heat Exchangers SLU
Polígono Industrial San Martín, C/ Castillo de la Concepción, Nave 6.
Ordinary
100%
HRS Heat Exchangers SDN. BHD.
30B, Jalan Tapah, Off Jalan Goh Hock Huat, 41400 Klang, Selangor Darul Ehsan, Malaysia
Ordinary
100%
HRS Process Systems Pty Ltd
Banks Group, 801 Glenferrie Road, Hawthorn VIC 3122, Australia
Ordinary
100%
HRS Process Systems Limited
201 Karen Selene, 851 Bhandarkar Institute Road, Pune 411-004, India
Ordinary
100%
HRS Process Technology Inc.
840 Kennesaw Ave NW, Marietta, Georgia 30060, United States of America
Ordinary
100%
HRS Heat Exchangers NZ Limited
Level 2, 142 Broadway, Newmarket, Aukland, 1023, New Zealand
Ordinary
100%


12.


Stocks

Group
Group
2022
2021
£
£

Work in progress
4,974,562
3,324,103

Finished goods and goods for resale
5,062,225
2,842,375

10,036,787
6,166,478


The difference between purchase price or production cost of stocks and their replacement cost is not material.


13.


Debtors

Page 32

 
EXCHANGER INDUSTRIES UK LIMITED AND ITS SUBSIDIARIES
 

 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
Group
Group
Company
Company
2022
2021
2022
2021
£
£
£
£

Due after more than one year

Long term debtors
-
76,339
-
76,339


Group
Group
Company
Company
2022
2021
2022
2021
£
£
£
£

Due within one year

Trade debtors
10,424,055
5,336,082
-
-

Other debtors
1,022,920
494,036
-
-

Prepayments and accrued income
1,609,591
1,800,670
48,621
131,971

13,056,566
7,630,788
48,621
131,971



14.


Cash and cash equivalents

Group
Group
Company
Company
2022
2021
2022
2021
£
£
£
£

Cash at bank and in hand
3,829,181
5,724,835
169,896
50,652



15.


Creditors: Amounts falling due within one year

Group
Group
Company
Company
2022
2021
2022
2021
£
£
£
£

Bank loans (secured - see note 17)
787,500
630,000
787,500
630,000

Trade creditors
7,149,416
4,140,728
-
-

Amounts owed to group undertakings
1,987,424
970,001
2,974,050
1,605,215

Corporation tax
573,208
266,668
-
-

Other creditors
2,556,566
7,244,539
1,000,000
2,000,000

Accruals and deferred income
7,124,031
2,077,415
75,391
88,328

20,178,145
15,329,351
4,836,941
4,323,543


Page 33

 
EXCHANGER INDUSTRIES UK LIMITED AND ITS SUBSIDIARIES
 

 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022

16.


Creditors: Amounts falling due after more than one year

Group
Group
Company
Company
2022
2021
2022
2021
£
£
£
£

Bank loans (secured - see note 17)
7,740,000
8,370,000
7,740,000
8,370,000

Other creditors
2,948,780
2,773,876
236,101
226,497

10,688,780
11,143,876
7,976,101
8,596,497


Included within other creditors due after more than one year are two loans totalling £2,891,495 (2021: £2,773,876) which are repayable in March 2024 and March 2032. Interest is charged at an assumed rate of 4.16%. There is no security against these loans.


17.


Loans


Analysis of the maturity of loans is given below:


Group
Group
Company
Company
2022
2021
2022
2021
£
£
£
£

Amounts falling due within one year

Bank loans
787,500
630,000
787,500
630,000

Amounts falling due 1-2 years

Bank loans
7,740,000
8,370,000
7,740,000
8,370,000



8,527,500
9,000,000
8,527,500
9,000,000


The bank loan is secured on the assets of the Company and its subsidiaries by the way of a fixed and floating charge. Interest is payable on the loan at a rate of 3.5% plus the daily overnight SONIA rate.

Page 34

 
EXCHANGER INDUSTRIES UK LIMITED AND ITS SUBSIDIARIES
 

 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022

18.


Deferred taxation


Group



2022


£






At beginning of year
(222,714)


Charged to profit or loss
7,187



At end of year
(215,527)

Group
Group
2022
2021
£
£

Accelerated capital allowances
(93,279)
(91,514)

Deferred tax on revaluation
(188,775)
(188,775)

Other timing differences
66,527
57,575

(215,527)
(222,714)


19.


Provisions


Group



Provision for onerous leases

£





At 1 January 2022
-


Charged to profit or loss
477,863



At 31 December 2022
477,863


20.


Share capital

2022
2021
£
£
Allotted, called up and fully paid



1,201 (2021 - 1,201) Ordinary share capital shares of £1.00 each
1,201
1,201


Page 35

 
EXCHANGER INDUSTRIES UK LIMITED AND ITS SUBSIDIARIES
 

 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022

21.


Reserves

Share premium account

As at 31 December 2022, the value of the share premium account is £10,209,453 (2021: £10,209,453).

Profit and loss reserves

Included within the profit and loss reserve of the Company there are no non-distributable reserves.


22.


Contingent liabilities

As at 31 December 202, the Group has bank guarantees outstanding to the value of £1,789,967 (2021: £2,234,853). In the opinion of the directors, it is unlikely that any liability will crystallise in this respect.  


23.


Pension commitments

The Group operates a defined contributions pension scheme. The assets of the scheme are held separately from those of the Group in an independently administered fund. The pension cost charge represents contributions payable by the Group to the fund and amounted to £154,741 (period ended 31 December 2021: £39,553). There were no amounts due at the year end (2021: £Nil). 


24.


Commitments under operating leases

At 31 December 2022 the Group had future minimum lease payments due under non-cancellable operating leases for each of the following periods:


Group
Group
2022
2021
£
£

Not later than 1 year
262,917
281,057

Later than 1 year and not later than 5 years
487,216
715,481

750,133
996,538

The Company had no commitments under non-cancellable operating leases at the Balance Sheet date. 


25.


Immediate and ultimate parent undertaking

As at 31 December 2022 and 31 December 2021, the immediate and ultimate parent undertaking was Exchanger Industries Limited, a company incorporated in Canada. 


26.


Ultimate controlling party

As at 31 December 2022 and 31 December 2021, the ultimate controlling party is Cooperatie Nova Argent U.A by virtue of its shareholding in the ultimate parent undertaking. 

Page 36