Company registration number 14333330 (England and Wales)
HANDEL GROUP LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 DECEMBER 2022
HANDEL GROUP LIMITED
COMPANY INFORMATION
Directors
Mr B S Forsey
(Appointed 2 September 2022)
Mr S Smogur
(Appointed 2 September 2022)
Mr. S Purchase
(Appointed 2 September 2022)
Company number
14333330
Registered office
The Colour Hub
Millbuck Close
Elgin Drive
Swindon
Wiltshire
United Kingdom
SN2 8XU
Auditor
Azets Audit Services
Epsilon House
The Square
Gloucester Business Park
Gloucester
United Kingdom
GL3 4AD
HANDEL GROUP LIMITED
CONTENTS
Page
Strategic report
1
Directors' report
2 - 3
Independent auditor's report
4 - 6
Group statement of comprehensive income
7
Group balance sheet
8
Company balance sheet
9
Group statement of changes in equity
10
Company statement of changes in equity
11
Group statement of cash flows
12
Notes to the financial statements
13 - 33
HANDEL GROUP LIMITED
STRATEGIC REPORT
FOR THE PERIOD ENDED 31 DECEMBER 2022
- 1 -

The directors present the strategic report for the Period ended 31 December 2022.

Review of the business

Strategically, October 2022 saw the completion of the long-planned MBO. This move enables the directors to focus on continued delivery of the group’s long term strategy of margin improvement, whilst pursuing broader strategic opportunities to improve profit sustainability, cash generation and long term growth. These tandem strategies are being executed in 2023 with great success. The MBO was primarily funded through deferred consideration, at a fixed rate of interest and payable over 6 years.

 

As the parent company was created as part of the aforementioned MBO, these financial statements therefore reflect the post acquisition period only.

 

For full detail of the results for 2022 as a whole, refer to the accounts of the subsidiary entity, ESP Colour Limited. However, as can be seen from these financial statements, the group is profitable, reflective of the directors efforts and strategy mentioned above.

 

In summary, whilst the business faced a number of headwinds in 2022 it delivered a reasonable net profit and is performing well in 2023 to date.

Principal risks and uncertainties

Financial risk. The group has external financing in relation to both working capital and asset purchase requirements and is therefore exposed to movements in interest rates along with liquidity risk. However, the vast majority of the group’s borrowing is at a fixed rate of interest and the directors closely monitor borrowing facilities in place and operate within said facilities in order to mitigate this risk.

 

Credit risk. Credit risk arises from the group offering credit terms to its customers to which there is a risk of non-payment. In order to reduce this risk the directors closely manage the sales ledger and also insures its trade debts against non-payment. Additionally, the business utilises credit facilities offered by some key suppliers. The directors retain close working relationships with these suppliers, operating transparently and communicating regularly.

 

Inflation. The business purchases large amounts of materials, primarily paper and associated materials. Whilst the majority of the business revenues are based on variable pricing which reflect these increases, some contracts are based on fixed prices. The directors have managed this risk through contractual terms that allow periodic review of prices to limit downside risk.

 

Health and Safety. The group is committed to ensuring the Health and Safety of its employees and site visitors. Accordingly, it is making investments in this crucial area through recruitment of dedicated resources and providing external training to key operational staff.

Key performance indicators

The directors consider the key financial performance indicators (KPIs) when assessing the performance of the group. The key performance indicators used by the directors are level of turnover and the gross profit margin.

On behalf of the board

Mr S Smogur
Director
29 September 2023
HANDEL GROUP LIMITED
DIRECTORS' REPORT
FOR THE PERIOD ENDED 31 DECEMBER 2022
- 2 -

The directors present their annual report and financial statements for the Period ended 31 December 2022.

Principal activities

The principal activity of the company and group is that of printing

Results and dividends

The results for the Period are set out on page 7.

No ordinary dividends were paid. The directors do not recommend payment of a further dividend.

Directors

The directors who held office during the Period and up to the date of signature of the financial statements were as follows:

Mr B S Forsey
(Appointed 2 September 2022)
Mr S Smogur
(Appointed 2 September 2022)
Mr. S Purchase
(Appointed 2 September 2022)
Statement of directors' responsibilities

The directors are responsible for preparing the Annual Report and the financial statements in accordance with applicable law and regulations.

 

Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the group and company, and of the profit or loss of the group for that period. In preparing these financial statements, the directors are required to:

 

 

The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the group’s and company’s transactions and disclose with reasonable accuracy at any time the financial position of the group and 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 group and company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

Statement of disclosure to auditor

So far as each person who was a director at the date of approving this report is aware, there is no relevant audit information of which the auditor of the company is unaware. Additionally, the directors individually have taken all the necessary steps that they ought to have taken as directors in order to make themselves aware of all relevant audit information and to establish that the auditor of the company is aware of that information.

Strategic report

The company has chosen in accordance with Companies Act 2006, s. 414C(11) to set out in the company's strategic report information required by Large and Medium-sized Companies and Groups (Accounts and Reports) Regulations 2008, Sch. 7 to be contained in the directors' report. It has done so in respect of 'fair review of the business' and 'key performance indicators'.

HANDEL GROUP LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE PERIOD ENDED 31 DECEMBER 2022
- 3 -
On behalf of the board
Mr S Smogur
Director
29 September 2023
HANDEL GROUP LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF HANDEL GROUP LIMITED
- 4 -
Opinion

We have audited the financial statements of Handel Group Limited (the 'parent company') and its subsidiaries (the 'group') for the Period ended 31 December 2022 which comprise the group statement of comprehensive income, the group balance sheet, the company balance sheet, the group statement of changes in equity, the company statement of changes in equity, the group statement of cash flows and notes to the financial statements, including significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice).

In our opinion the financial statements:

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 Auditor's responsibilities for the audit of the financial statements section of our report. We are independent of the group and parent company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC’s Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Conclusions relating to going concern

In auditing the financial statements, we have concluded that the directors' use of the going concern basis of accounting in the preparation of the financial statements is appropriate.

 

Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the group's and 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.

Other information

The other information comprises the information included in the annual report other than the financial statements and our auditor's report thereon. The directors are responsible for the other information contained within the annual report. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the course of the audit, or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.

 

We have nothing to report in this regard.

Opinions on other matters prescribed by the Companies Act 2006

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

HANDEL GROUP LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF HANDEL GROUP LIMITED
- 5 -
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 their environment obtained in the course of the audit, we have not identified material misstatements in the strategic report or the directors' report.

 

We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to report to you if, in our opinion:

Responsibilities of directors

As explained more fully in the directors' responsibilities statement, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. In preparing the financial statements, the directors are responsible for assessing the 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 parent company or to cease operations, or have no realistic alternative but to do so.

Auditor's responsibilities for the audit of the financial statements

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.

A further description of our responsibilities is available on the Financial Reporting Council’s website at: https://www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor's report.

HANDEL GROUP LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF HANDEL GROUP LIMITED
- 6 -

Extent to which the audit was considered capable of detecting irregularities, including fraud

Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above and on the Financial Reporting Council’s website, to detect material misstatements in respect of irregularities, including fraud.

 

We obtain and update our understanding of the entity, its activities, its control environment, and likely future developments, including in relation to the legal and regulatory framework applicable and how the entity is complying with that framework.  Based on this understanding, we identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion.  This includes consideration of the risk of acts by the entity that were contrary to applicable laws and regulations, including fraud.

 

In response to the risk of irregularities and non-compliance with laws and regulations, including fraud, we designed procedures which included:

 

 

Because of the inherent limitations of an audit, there is a risk that we will not detect all irregularities, including those leading to a material misstatement in the financial statements or non-compliance with regulation.  This risk increases the more that compliance with a law or regulation is removed from the events and transactions reflected in the financial statements, as we will be less likely to become aware of instances of non-compliance.  The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.

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 2006. Our audit work has been undertaken so that we might state to the company’s members those matters we are required to state to them in an auditor's report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company’s members as a body, for our audit work, for this report, or for the opinions we have formed.

Robert Hull (Senior Statutory Auditor)
For and on behalf of Azets Audit Services
29 September 2023
Chartered Accountants
Statutory Auditor
Epsilon House
The Square
Gloucester Business Park
Gloucester
United Kingdom
GL3 4AD
HANDEL GROUP LIMITED
GROUP STATEMENT OF COMPREHENSIVE INCOME
FOR THE PERIOD ENDED 31 DECEMBER 2022
- 7 -
Period
ended
31 December
2022
Notes
£
Turnover
3
4,084,161
Cost of sales
(3,308,294)
Gross profit
775,867
Administrative expenses
(587,242)
Operating profit
4
188,625
Interest payable and similar expenses
8
(91,518)
Profit before taxation
97,107
Tax on profit
9
-
0
Profit for the financial Period
25
97,107
Other comprehensive income
Revaluation of tangible fixed assets
135,000
Total comprehensive income for the Period
232,107
Profit for the financial Period is attributable to:
- Owners of the parent company
87,396
- Non-controlling interests
9,711
97,107
Total comprehensive income for the Period is attributable to:
- Owners of the parent company
222,396
- Non-controlling interests
9,711
232,107
HANDEL GROUP LIMITED
GROUP BALANCE SHEET
AS AT
31 DECEMBER 2022
31 December 2022
- 8 -
2022
Notes
£
£
Fixed assets
Goodwill
10
2,032,356
Other intangible assets
10
57,117
Total intangible assets
2,089,473
Tangible assets
11
2,754,643
Investments
12
53,885
4,898,001
Current assets
Stocks
15
1,683,057
Debtors
16
4,525,931
Cash at bank and in hand
837,843
7,046,831
Creditors: amounts falling due within one year
17
(6,404,151)
Net current assets
642,680
Total assets less current liabilities
5,540,681
Creditors: amounts falling due after more than one year
18
(4,819,414)
Provisions for liabilities
Deferred tax liability
21
246,011
(246,011)
Net assets
475,256
Capital and reserves
Called up share capital
23
100
Revaluation reserve
24
135,000
Profit and loss reserves
25
87,396
Equity attributable to owners of the parent company
222,496
Non-controlling interests
252,760
475,256
The financial statements were approved by the board of directors and authorised for issue on 29 September 2023 and are signed on its behalf by:
29 September 2023
Mr S Smogur
Director
Company registration number 14333330 (England and Wales)
HANDEL GROUP LIMITED
COMPANY BALANCE SHEET
AS AT 31 DECEMBER 2022
31 December 2022
- 9 -
2022
Notes
£
£
Fixed assets
Investments
12
3,500,000
Current assets
Debtors
16
100
Creditors: amounts falling due within one year
17
(366,667)
Net current liabilities
(366,567)
Total assets less current liabilities
3,133,433
Creditors: amounts falling due after more than one year
18
(1,833,333)
Net assets
1,300,100
Capital and reserves
Called up share capital
23
100
Profit and loss reserves
25
1,300,000
Total equity
1,300,100

As permitted by s408 Companies Act 2006, the company has not presented its own profit and loss account and related notes. The company’s profit for the year was £1,300,000.

The financial statements were approved by the board of directors and authorised for issue on 29 September 2023 and are signed on its behalf by:
29 September 2023
Mr S Smogur
Director
Company registration number 14333330 (England and Wales)
HANDEL GROUP LIMITED
GROUP STATEMENT OF CHANGES IN EQUITY
FOR THE PERIOD ENDED 31 DECEMBER 2022
- 10 -
Share capital
Revaluation reserve
Profit and loss reserves
Total controlling interest
Non-controlling interest
Total
Notes
£
£
£
£
£
£
Balance at 2 September 2022
-
-
-
-
-
-
Period ended 31 December 2022:
Profit for the period
-
-
87,396
87,396
9,711
97,107
Other comprehensive income:
Revaluation of tangible fixed assets
-
135,000
-
135,000
-
135,000
Total comprehensive income
-
135,000
87,396
222,396
9,711
232,107
Issue of share capital
23
100
-
-
100
-
100
Acquisition of subsidiary
-
-
-
-
243,049
243,049
Balance at 31 December 2022
100
135,000
87,396
222,496
252,760
475,256
HANDEL GROUP LIMITED
COMPANY STATEMENT OF CHANGES IN EQUITY
FOR THE PERIOD ENDED 31 DECEMBER 2022
- 11 -
Share capital
Profit and loss reserves
Total
Notes
£
£
£
Balance at 2 September 2022
-
-
-
Period ended 31 December 2022:
Profit and total comprehensive income
-
1,300,000
1,300,000
Issue of share capital
23
100
-
100
Balance at 31 December 2022
100
1,300,000
1,300,100
HANDEL GROUP LIMITED
GROUP STATEMENT OF CASH FLOWS
FOR THE PERIOD ENDED 31 DECEMBER 2022
- 12 -
2022
Notes
£
£
Cash flows from operating activities
Cash generated from/(absorbed by) operations
30
248,853
Interest paid
(91,518)
Net cash inflow/(outflow) from operating activities
157,335
Investing activities
Purchase of business
(1,300,000)
Cash acquired on purchase of business
854,600
Net cash used in investing activities
(445,400)
Financing activities
Proceeds from issue of shares
100
Repayment of bank loans
(458,250)
Proceeds from finance leases obligations
1,584,058
Net cash generated from/(used in) financing activities
1,125,908
Net increase in cash and cash equivalents
837,843
Cash and cash equivalents at beginning of Period
-
Cash and cash equivalents at end of Period
837,843
HANDEL GROUP LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 DECEMBER 2022
- 13 -
1
Accounting policies
Company information

Handel Group Limited (“the company”) is a private limited company domiciled and incorporated in England and Wales. The registered office is .

 

The group consists of Handel Group Limited and all of its subsidiaries.

1.1
Reporting period

Handel Group Limited ("the company") was incorporated on 2 September 2022 and the financial statements therefore present a period shorter than one year.

 

The company has taken advantage of section 392 of the Companies Act 2006, in order to amend the reporting period to 31 December 2022, in line with the reporting period end of the entities acquired in the period.

1.2
Accounting convention

These financial statements have been prepared in accordance with FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” (“FRS 102”) and the requirements of the Companies Act 2006.

The financial statements are prepared in sterling, which is the functional currency of the company. Monetary amounts in these financial statements are rounded to the nearest £.

The financial statements have been prepared under the historical cost convention. The principal accounting policies adopted are set out below.

The company is a qualifying entity for the purposes of FRS 102, being a member of a group where the parent of that group prepares publicly available consolidated financial statements, including this company, which are intended to give a true and fair view of the assets, liabilities, financial position and profit or loss of the group. The company has therefore taken advantage of exemptions from the following disclosure requirements for parent company information presented within the consolidated financial statements:

 

HANDEL GROUP LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 31 DECEMBER 2022
1
Accounting policies
(Continued)
- 14 -
1.3
Business combinations

In the parent company financial statements, the cost of a business combination is the fair value at the acquisition date of the assets given, equity instruments issued and liabilities incurred or assumed, plus costs directly attributable to the business combination. The excess of the cost of a business combination over the fair value of the identifiable assets, liabilities and contingent liabilities acquired is recognised as goodwill. The cost of the combination includes the estimated amount of contingent consideration that is probable and can be measured reliably, and is adjusted for changes in contingent consideration after the acquisition date. Provisional fair values recognised for business combinations in previous periods are adjusted retrospectively for final fair values determined in the 12 months following the acquisition date. Investments in subsidiaries, joint ventures and associates are accounted for at cost less impairment.

 

Deferred tax is recognised on differences between the value of assets (other than goodwill) and liabilities recognised in a business combination accounted for using the purchase method and the amounts that can be deducted or assessed for tax, considering the manner in which the carrying amount of the asset or liability is expected to be recovered or settled. The deferred tax recognised is adjusted against goodwill or negative goodwill.

1.4
Basis of consolidation

The consolidated group financial statements consist of the financial statements of the parent company Handel Group Limited together with all entities controlled by the parent company (its subsidiaries) and the group’s share of its interests in joint ventures and associates.

 

All financial statements are made up to 31 December 2022. Where necessary, adjustments are made to the financial statements of subsidiaries to bring the accounting policies used into line with those used by other members of the group.

 

All intra-group transactions, balances and unrealised gains on transactions between group companies are eliminated on consolidation. Unrealised losses are also eliminated unless the transaction provides evidence of an impairment of the asset transferred.

Subsidiaries are consolidated in the group’s financial statements from the date that control commences until the date that control ceases.

Entities in which the group holds an interest and which are jointly controlled by the group and one or more other venturers under a contractual arrangement are treated as joint ventures. Entities other than subsidiary undertakings or joint ventures, in which the group has a participating interest and over whose operating and financial policies the group exercises a significant influence, are treated as associates.

Investments in joint ventures and associates are carried in the group balance sheet at cost plus post-acquisition changes in the group’s share of the net assets of the entity, less any impairment in value. The carrying values of investments in joint ventures and associates include acquired goodwill.

 

If the group’s share of losses in a joint venture or associate equals or exceeds its investment in the joint venture or associate, the group does not recognise further losses unless it has incurred obligations to do so or has made payments on behalf of the joint venture or associate.

 

Unrealised gains arising from transactions with joint ventures and associates are eliminated to the extent of the group’s interest in the entity.

1.5
Going concern

At the time of approving the financial statements, the directors have a reasonable expectation that the group has adequate resources to continue in operational existence for the foreseeable future. Thus the directors continue to adopt the going concern basis of accounting in preparing the financial statements.

HANDEL GROUP LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 31 DECEMBER 2022
1
Accounting policies
(Continued)
- 15 -
1.6
Turnover

Turnover is recognised at the fair value of the consideration received or receivable for goods and services provided in the normal course of business, and is shown net of VAT and other sales related taxes. The fair value of consideration takes into account trade discounts, settlement discounts and volume rebates.

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), the amount of revenue can be measured reliably, it is probable that the economic benefits associated with the transaction will flow to the entity and the costs incurred or to be incurred in respect of the transaction can be measured reliably.

Revenue from contracts for the provision of professional services is recognised by reference to the stage of completion when the stage of completion, costs incurred and costs to complete can be estimated reliably. The stage of completion is calculated by comparing costs incurred, mainly in relation to contractual hourly staff rates and materials, as a proportion of total costs. Where the outcome cannot be estimated reliably, revenue is recognised only to the extent of the expenses recognised that it is probable will be recovered.

1.7
Intangible fixed assets - goodwill

Goodwill represents the excess of the cost of acquisition of a business over the fair value of net assets acquired. It is initially recognised as an asset at cost and is subsequently measured at cost less accumulated amortisation and accumulated impairment losses. Goodwill is considered to have a finite useful life and is amortised on a systematic basis over its expected life, which is between 4-20 years.

 

For the purposes of impairment testing, goodwill is allocated to the cash-generating units expected to benefit from the acquisition. Cash-generating units to which goodwill has been allocated are tested for impairment at least annually, or more frequently when there is an indication that the unit may be impaired. If the recoverable amount of the cash-generating unit is less than the carrying amount of the unit, the impairment loss is allocated first to reduce the carrying amount of any goodwill allocated to the unit and then to the other assets of the unit pro-rata on the basis of the carrying amount of each asset in the unit.

1.8
Intangible fixed assets other than goodwill

Intangible assets acquired separately from a business are recognised at cost and are subsequently measured at cost less accumulated amortisation and accumulated impairment losses.

 

Intangible assets acquired on business combinations are recognised separately from goodwill at the acquisition date where it is probable that the expected future economic benefits that are attributable to the asset will flow to the entity and the fair value of the asset can be measured reliably; the intangible asset arises from contractual or other legal rights; and the intangible asset is separable from the entity.

Amortisation is recognised so as to write off the cost or valuation of assets less their residual values over their useful lives on the following bases:

Software
20% or 33% straight line
1.9
Tangible fixed assets

Tangible fixed assets are initially measured at cost and subsequently measured at cost or valuation, net of depreciation and any impairment losses.

HANDEL GROUP LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 31 DECEMBER 2022
1
Accounting policies
(Continued)
- 16 -

Depreciation is recognised so as to write off the cost or valuation of assets less their residual values over their useful lives on the following bases:

Leasehold land and buildings
Over the term of the lease and 33.3% straight line
Plant and equipment
2 - 33% straight line
Fixtures and fittings
20 - 33% straight line
Motor vehicles
33% straight line

The gain or loss arising on the disposal of an asset is determined as the difference between the sale proceeds and the carrying value of the asset, and is recognised in the profit and loss account.

1.10
Fixed asset investments

Equity investments are measured at fair value through profit or loss, except for those equity investments that are not publicly traded and whose fair value cannot otherwise be measured reliably, which are recognised at cost less impairment until a reliable measure of fair value becomes available.

 

In the parent company financial statements, investments in subsidiaries, associates and jointly controlled entities are initially measured at cost and subsequently measured at cost less any accumulated impairment losses.

A subsidiary is an entity controlled by the group. Control is the power to govern the financial and operating policies of the entity so as to obtain benefits from its activities.

An associate is an entity, being neither a subsidiary nor a joint venture, in which the company holds a long-term interest and where the company has significant influence. The group considers that it has significant influence where it has the power to participate in the financial and operating decisions of the associate.

 

Investments in associates are initially recognised at the transaction price (including transaction costs) and are subsequently adjusted to reflect the group’s share of the profit or loss, other comprehensive income and equity of the associate using the equity method. Any difference between the cost of acquisition and the share of the fair value of the net identifiable assets of the associate on acquisition is recognised as goodwill. Any unamortised balance of goodwill is included in the carrying value of the investment in associates.

 

Losses in excess of the carrying amount of an investment in an associate are recorded as a provision only when the company has incurred legal or constructive obligations or has made payments on behalf of the associate.

 

In the parent company financial statements, investments in associates are accounted for at cost less impairment.

Entities in which the group has a long term interest and shares control under a contractual arrangement are classified as jointly controlled entities.

1.11
Impairment of fixed assets

At each reporting period end date, the group reviews the carrying amounts of its tangible and intangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where it is not possible to estimate the recoverable amount of an individual asset, the company estimates the recoverable amount of the cash-generating unit to which the asset belongs.

 

The carrying amount of the investments accounted for using the equity method is tested for impairment as a single asset. Any goodwill included in the carrying amount of the investment is not tested separately for impairment.

HANDEL GROUP LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 31 DECEMBER 2022
1
Accounting policies
(Continued)
- 17 -

Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.

 

If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (or cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the impairment loss is treated as a revaluation decrease.

Recognised impairment losses are reversed if, and only if, the reasons for the impairment loss have ceased to apply. Where an impairment loss subsequently reverses, the carrying amount of the asset (or cash-generating unit) is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset (or cash-generating unit) in prior years. A reversal of an impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the reversal of the impairment loss is treated as a revaluation increase.

1.12
Stocks

Stocks are stated at the lower of cost and estimated selling price less costs to complete and sell. Cost comprises direct materials and, where applicable, direct labour costs and those overheads that have been incurred in bringing the stocks to their present location and condition.

 

Stocks held for distribution at no or nominal consideration are measured at the lower of cost and replacement cost, adjusted where applicable for any loss of service potential.

At each reporting date, an assessment is made for impairment. Any excess of the carrying amount of stocks over its estimated selling price less costs to complete and sell is recognised as an impairment loss in profit or loss. Reversals of impairment losses are also recognised in profit or loss.

1.13
Cash and cash equivalents

Cash and cash equivalents are basic financial assets and include cash in hand, deposits held at call with banks, other short-term liquid investments with original maturities of three months or less, and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities.

1.14
Financial instruments

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 and 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 debtors and cash and bank balances, are initially measured at transaction price including transaction costs and are subsequently carried at amortised cost using the effective interest method 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. Financial assets classified as receivable within one year are not amortised.

HANDEL GROUP LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 31 DECEMBER 2022
1
Accounting policies
(Continued)
- 18 -
Other financial assets

Other financial assets, including investments in equity instruments which are not subsidiaries, associates or joint ventures, are initially measured at fair value, which is normally the transaction price. Such assets are subsequently carried at fair value and the changes in fair value are recognised in profit or loss, except that investments in equity instruments that are not publicly traded and whose fair values cannot be measured reliably are measured at cost less impairment.

Impairment of financial assets

Financial assets, other than those held at fair value through profit and loss, are assessed for indicators of impairment at each reporting end date.

 

Financial assets are impaired where there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial asset, the estimated future cash flows have been affected. If an asset is impaired, the impairment loss is the difference between the carrying amount and the present value of the estimated cash flows discounted at the asset’s original effective interest rate. The impairment loss is recognised in profit or loss.

 

If there is a decrease in the impairment loss arising from an event occurring after the impairment was recognised, the impairment is reversed. The reversal is such that the current carrying amount does not exceed what the carrying amount would have been, had the impairment not previously been recognised. The impairment reversal is recognised in profit or loss.

Derecognition of financial assets

Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire or are settled, or when the group transfers the financial asset and substantially all the risks and rewards of ownership to another entity, or if some significant risks and rewards of ownership are retained but control of the asset has transferred to another party that is able to sell the asset in its entirety to an unrelated third party.

Classification of financial liabilities

Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the group after deducting all of its liabilities.

Basic financial liabilities

Basic financial liabilities, including creditors, bank loans, loans from fellow group companies and preference shares that are classified as debt, are initially recognised at transaction price unless the arrangement constitutes a financing transaction, where the debt instrument is measured at the present value of the future payments discounted at a market rate of interest. Financial liabilities classified as payable within one year are not amortised.

 

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

 

Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Amounts payable are classified as current liabilities if payment is due within one year or less. If not, they are presented as non-current liabilities. Trade creditors are recognised initially at transaction price and subsequently measured at amortised cost using the effective interest method.

HANDEL GROUP LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 31 DECEMBER 2022
1
Accounting policies
(Continued)
- 19 -
Other financial liabilities

Derivatives, including interest rate swaps and forward foreign exchange contracts, are not basic financial instruments. Derivatives are initially recognised at fair value on the date a derivative contract is entered into and are subsequently re-measured at their fair value. Changes in the fair value of derivatives are recognised in profit or loss in finance costs or finance income as appropriate, unless hedge accounting is applied and the hedge is a cash flow hedge.

 

Debt instruments that do not meet the conditions in FRS 102 paragraph 11.9 are subsequently measured at fair value through profit or loss. Debt instruments may be designated as being measured at fair value through profit or loss to eliminate or reduce an accounting mismatch or if the instruments are measured and their performance evaluated on a fair value basis in accordance with a documented risk management or investment strategy.

Derecognition of financial liabilities

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

1.15
Equity instruments

Equity instruments issued by the group are recorded at the proceeds received, net of transaction costs. Dividends payable on equity instruments are recognised as liabilities once they are no longer at the discretion of the group.

1.16
Taxation

The tax expense represents the sum of the tax currently payable and deferred tax.

Current tax

The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the profit and loss account because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The group’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.

Deferred tax

Deferred tax liabilities are generally recognised for all timing differences and deferred tax assets are recognised to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits. Such assets and liabilities are not recognised if the timing difference arises from goodwill or from the initial recognition of other assets and liabilities in a transaction that affects neither the tax profit nor the accounting profit.

 

The carrying amount of deferred tax assets is reviewed at each reporting end date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realised. Deferred tax is charged or credited in the profit and loss account, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity. Deferred tax assets and liabilities are offset if, and only if, there is a legally enforceable right to offset current tax assets and liabilities and the deferred tax assets and liabilities relate to taxes levied by the same tax authority.

HANDEL GROUP LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 31 DECEMBER 2022
1
Accounting policies
(Continued)
- 20 -
1.17
Provisions

Provisions are recognised when the group has a legal or constructive present obligation as a result of a past event, it is probable that the group will be required to settle that obligation and a reliable estimate can be made of the amount of the obligation.

 

The amount recognised as a provision is the best estimate of the consideration required to settle the present obligation at the reporting end date, taking into account the risks and uncertainties surrounding the obligation. Where the effect of the time value of money is material, the amount expected to be required to settle the obligation is recognised at present value. When a provision is measured at present value, the unwinding of the discount is recognised as a finance cost in profit or loss in the period in which it arises.

1.18
Employee benefits

The costs of short-term employee benefits are recognised as a liability and an expense, unless those costs are required to be recognised as part of the cost of stock or fixed assets.

 

The cost of any unused holiday entitlement is recognised in the period in which the employee’s services are received.

 

Termination benefits are recognised immediately as an expense when the company is demonstrably committed to terminate the employment of an employee or to provide termination benefits.

1.19
Retirement benefits

Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.

1.20
Leases

Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessees. All other leases are classified as operating leases.

 

Assets held under finance leases are recognised as assets at the lower of the assets fair value at the date of inception and the present value of the minimum lease payments. The related liability is included in the balance sheet as a finance lease obligation. Lease payments are treated as consisting of capital and interest elements. The interest is charged to profit or loss so as to produce a constant periodic rate of interest on the remaining balance of the liability.

Rentals payable under operating leases, including any lease incentives received, are charged to profit or loss on a straight line basis over the term of the relevant lease except where another more systematic basis is more representative of the time pattern in which economic benefits from the leased asset are consumed.

1.21
Foreign exchange

Transactions in currencies other than pounds sterling are recorded at the rates of exchange prevailing at the dates of the transactions. At each reporting end date, monetary assets and liabilities that are denominated in foreign currencies are retranslated at the rates prevailing on the reporting end date. Gains and losses arising on translation in the period are included in profit or loss.

HANDEL GROUP LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 31 DECEMBER 2022
- 21 -
2
Judgements and key sources of estimation uncertainty

In the application of the group’s accounting policies, the directors are required to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.

 

The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised where the revision affects only that period, or in the period of the revision and future periods where the revision affects both current and future periods.

Critical judgements

The following judgements (apart from those involving estimates) have had the most significant effect on amounts recognised in the financial statements.

Depreciation

The annual depreciation charge for tangible assets is sensitive to changes in the estimated useful lives and residual values of the assets. The useful 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.

 

Rates of depreciation charged are considered on a line by line basis and disclosed within the accounting policy for depreciation.

 

Refer to the tangible fixed assets note for the carrying amount for each class of assets.

3
Turnover
2022
£
Turnover analysed by class of business
Sale of goods
4,084,161
2022
£
Turnover analysed by geographical market
UK
4,084,161
4
Operating profit
2022
£
Operating profit for the period is stated after charging/(crediting):
Exchange gains
(21)
Depreciation of owned tangible fixed assets
50,829
Depreciation of tangible fixed assets held under finance leases
34,192
Amortisation of intangible assets
85,260
Operating lease charges
54,639
HANDEL GROUP LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 31 DECEMBER 2022
- 22 -
5
Auditor's remuneration
2022
Fees payable to the company's auditor and associates:
£
For audit services
Audit of the financial statements of the group and company
6,876
6
Employees

The average monthly number of persons (including directors) employed by the group and company during the Period was:

Group
Company
2022
2022
Number
Number
Production
121
-
Administration
19
3
Total
140
3

Their aggregate remuneration comprised:

Group
Company
2022
2022
£
£
Wages and salaries
886,234
-
0
Social security costs
85,133
-
0
Pension costs
20,841
-
0
992,208
-
0
7
Directors' remuneration
2022
£
Remuneration for qualifying services
46,347
Company pension contributions to defined contribution schemes
3,468
49,815
The number of directors for whom retirement benefits are accruing under defined contribution schemes amounted to 3.
HANDEL GROUP LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 31 DECEMBER 2022
- 23 -
8
Interest payable and similar expenses
2022
£
Interest on bank overdrafts and loans
16,524
Interest on invoice finance arrangements
6,773
Interest on finance leases and hire purchase contracts
65,700
Other interest
2,521
Total finance costs
91,518
HANDEL GROUP LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 31 DECEMBER 2022
- 24 -
9
Taxation

The actual charge for the Period can be reconciled to the expected charge/(credit) for the Period based on the profit or loss and the standard rate of tax as follows:

2022
£
Profit before taxation
97,107
Expected tax charge based on the standard rate of corporation tax in the UK of 19.00%
18,450
Tax effect of expenses that are not deductible in determining taxable profit
8,175
Research and development tax credit
(83,314)
Other differences including change in rate
56,689
Taxation charge
-

Factors that may affect future tax charges

An increase in the main rate of UK Corporation Tax from 19% to 25% intended to take effect from 1 April 2023 had been enacted at the Balance Sheet date. Consequently, a rate of 25% has been used for purposes of providing for the effects of deferred taxation.

 

10
Intangible fixed assets
Group
Goodwill
Software
Total
£
£
£
Cost
At 2 September 2022
-
0
-
0
-
0
Additions - separately acquired
1,797,520
-
0
1,797,520
Additions - business combinations
2,326,151
133,598
2,459,749
At 31 December 2022
4,123,671
133,598
4,257,269
Amortisation and impairment
At 2 September 2022
-
0
-
0
-
0
Amortisation charged for the Period
66,846
18,414
85,260
Business combinations
2,024,469
58,067
2,082,536
At 31 December 2022
2,091,315
76,481
2,167,796
Carrying amount
At 31 December 2022
2,032,356
57,117
2,089,473
The company had no intangible fixed assets at 31 December 2022.
HANDEL GROUP LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 31 DECEMBER 2022
- 25 -
11
Tangible fixed assets
Group
Leasehold land and buildings
Plant and equipment
Fixtures and fittings
Total
£
£
£
£
Cost or valuation
At 2 September 2022
-
0
-
0
-
0
-
0
Additions - Business combinations
599,129
9,933,654
289,546
10,822,329
Revaluation
-
0
135,000
-
0
135,000
At 31 December 2022
599,129
10,068,654
289,546
10,957,329
Depreciation and impairment
At 2 September 2022
-
0
-
0
-
0
-
0
Depreciation charged in the Period
8,738
76,180
103
85,021
Business combinations
445,375
7,412,481
259,809
8,117,665
At 31 December 2022
454,113
7,488,661
259,912
8,202,686
Carrying amount
At 31 December 2022
145,016
2,579,993
29,634
2,754,643
The company had no tangible fixed assets at 31 December 2022.

The net carrying value of tangible fixed assets includes the following in respect of assets held under finance leases or hire purchase contracts.

Group
Company
2022
2022
£
£
Plant and equipment
1,530,856
-
0

The fair value of certain items of plant and equipment was reassessed by the directors at 31st December 2022 to be £135,000. Consequently, a gain of £135,000 (2021: £Nil) was recognised in profit or loss, net of taxation.

 

If these items of plant and equipment were measured using the cost model, the carrying amounts would have been £Nil.

 

HANDEL GROUP LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 31 DECEMBER 2022
- 26 -
12
Fixed asset investments
Group
Company
2022
2022
Notes
£
£
Investments in subsidiaries
13
-
0
3,500,000
Investments in associates
14
53,885
-
0
53,885
3,500,000
Movements in fixed asset investments
Group
Shares in associates
£
Cost or valuation
At 2 September 2022
-
Additions
53,885
Business combinations
158,700
At 31 December 2022
212,585
Impairment
At 2 September 2022
-
Business combinations
158,700
At 31 December 2022
158,700
Carrying amount
At 31 December 2022
53,885
Movements in fixed asset investments
Company
Shares in subsidiaries
£
Cost or valuation
At 2 September 2022
-
Additions
3,500,000
At 31 December 2022
3,500,000
Carrying amount
At 31 December 2022
3,500,000
13
Subsidiaries

Details of the company's subsidiaries at 31 December 2022 are as follows:

HANDEL GROUP LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 31 DECEMBER 2022
13
Subsidiaries
(Continued)
- 27 -
Name of undertaking
Registered office
Class of
% Held
shares held
Direct
Indirect
ESP Co Holdings Limited
England and Wales
Ordinary
90.00
-
ESP Colour Limited
England and Wales
Ordinary
0
90.00
ESP Smile Limited
England and Wales
Ordinary
0
90.00
Kingfisher Print and Design Limited
England and Wales
Ordinary
0
90.00
PrintMX Ltd
England and Wales
Ordinary
0
90.00
14
Associates

Details of associates at 31 December 2022 are as follows:

Name of undertaking
Registered office
Class of
% Held
shares held
Direct
Indirect
ESP Web2Print LLP
Esp Group, Elgin Drive, Swindon, England, SN2 8XU
LLP Member
0
34

The indirect holding in this entity is owned by virtue of the stake in ESP Colour Limited.

 

ESP Web2Print LLP was dissolved on 25 April 2023.

15
Stocks
Group
Company
2022
2022
£
£
Raw materials and consumables
1,387,826
-
0
Work in progress
295,231
-
1,683,057
-
0
16
Debtors
Group
Company
2022
2022
Amounts falling due within one year:
£
£
Trade debtors
3,318,784
-
0
Corporation tax recoverable
97,814
-
0
Other debtors
485,219
100
Prepayments and accrued income
624,114
-
0
4,525,931
100

Included within other debtors is £244,640 in respect of an invoice discounting arrangement. This is secured by a fixed and floating charge over the assets and undertaking of the group.

HANDEL GROUP LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 31 DECEMBER 2022
- 28 -
17
Creditors: amounts falling due within one year
Group
Company
2022
2022
Notes
£
£
Bank loans
19
358,751
-
0
Obligations under finance leases
20
573,054
-
0
Other borrowings
19
366,667
366,667
Trade creditors
3,553,835
-
0
Other taxation and social security
288,277
-
Other creditors
29,290
-
0
Accruals and deferred income
1,234,277
-
0
6,404,151
366,667

The obligations under finance leases are secured by the assets to which they relate.

18
Creditors: amounts falling due after more than one year
Group
Company
2022
2022
Notes
£
£
Bank loans and overdrafts
19
519,646
-
0
Obligations under finance leases
20
2,466,435
-
0
Other borrowings
19
1,833,333
1,833,333
4,819,414
1,833,333

The obligations under finance leases are secured by the assets to which they relate.

19
Loans and overdrafts
Group
Company
2022
2022
£
£
Bank loans
878,397
-
0
Other loans
2,200,000
2,200,000
3,078,397
2,200,000
Payable within one year
725,418
366,667
Payable after one year
2,352,979
1,833,333
HANDEL GROUP LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 31 DECEMBER 2022
19
Loans and overdrafts
(Continued)
- 29 -

Bank loans attract interest at 2.94% over base rate and 5.50% fixed rate, and are due to be fully repaid by November 2026.

 

Bank loans are secured by a fixed and floating charge over the assets and undertaking of the group.

 

Other loans are in relation to unsecured loan notes and bear a fixed interest rate of 3%. All amounts are repayable by 1 November 2028.

20
Finance lease obligations
Group
Company
2022
2022
£
£
Future minimum lease payments due under finance leases:
Within one year
826,946
-
0
In two to five years
2,928,210
-
0
3,755,156
-
Less: future finance charges
(715,667)
-
0
3,039,489
-
0

Finance lease payments represent rentals payable by the company or group for certain items of plant and machinery. Leases include purchase options at the end of the lease period, and no restrictions are placed on the use of the assets. The average lease term is 3 years. All leases are on a fixed repayment basis and no arrangements have been entered into for contingent rental payments.

21
Deferred taxation

The following are the major deferred tax liabilities and assets recognised by the group and company, and movements thereon:

Liabilities
2022
Group
£
Accelerated capital allowances
433,455
Tax losses
(187,444)
246,011
The company has no deferred tax assets or liabilities.
Deferred tax liabilities were taken on in acquisitions.
HANDEL GROUP LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 31 DECEMBER 2022
- 30 -
22
Retirement benefit schemes
2022
Defined contribution schemes
£
Charge to profit or loss in respect of defined contribution schemes
20,841

A defined contribution pension scheme is operated for all qualifying employees. The assets of the scheme are held separately from those of the group in an independently administered fund.

23
Share capital
Group and company
2022
2022
Ordinary share capital
Number
£
Issued and fully paid
Ordinary of £1 each
100
100

Called-up share capital represents the nominal value of shares that have been issued.

 

Ordinary shares rank pari passu and are each entitled to one vote in any circumstances; pari passu to dividend payments or any distribution; and pari passu to participate in a distribution; arising from a winding up of the company.

 

24
Revaluation reserve
Group
Company
2022
2022
£
£
At the beginning of the Period
-
0
-
0
Revaluation surplus arising in the year
135,000
-
0
At the end of the Period
135,000
-
0
Revaluation reserve includes all current period revaluations of fixed assets.
25
Profit and loss reserves
Group
Company
2022
2022
£
£
At the beginning of the Period
-
-
Profit for the Period
87,396
1,300,000
At the end of the Period
87,396
1,300,000

Retained earnings include all current period profits and losses.

HANDEL GROUP LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 31 DECEMBER 2022
- 31 -
26
Acquisition of a business

On 21 October 2022 the group acquired 90 percent of the issued capital of ESP Co Holdings Limited.

Book Value
Adjustments
Fair Value
Net assets acquired
£
£
£
Intangible assets
339,492
-
339,492
Property, plant and equipment
2,313,570
-
2,313,570
Inventories
1,336,050
-
1,336,050
Trade and other receivables
5,335,028
-
5,335,028
Cash and cash equivalents
769,140
-
769,140
Borrowings
(1,202,982)
-
(1,202,982)
Obligations under finance leases
(1,187,778)
-
(1,187,778)
Trade and other payables
(5,778,630)
-
(5,778,630)
Deferred tax
(221,410)
-
(221,410)
Total identifiable net assets
1,702,480
-
1,702,480
Goodwill
1,797,520
Total consideration
3,500,000
The consideration was satisfied by:
£
Cash
1,300,000
Issue of loan notes
2,200,000
3,500,000
Contribution by the acquired business for the reporting period included in the group statement of comprehensive income since acquisition:
£
Turnover
4,084,161
Profit after tax
97,107
27
Financial commitments, guarantees and contingent liabilities

Refer to the operating lease commitments note.

 

There were no other financial commitments, guarantees or contingent liabilities at 31 December 2022.

HANDEL GROUP LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 31 DECEMBER 2022
- 32 -
28
Operating lease commitments
Lessee

At the reporting end date the group had outstanding commitments for future minimum lease payments under non-cancellable operating leases, which fall due as follows:

Group
Company
2022
2022
£
£
Within one year
238,901
-
Between two and five years
751,866
-
In over five years
382,293
-
1,373,060
-
29
Related party transactions
Transactions with related parties

During the Period the group entered into the following transactions with related parties:

Sales
Purchases
2022
2022
£
£
Group
Entities with control, joint control or significant influence over the group
251,915
14,274

The following amounts were outstanding at the reporting end date:

Amounts due from related parties
2022
Balance
£
Group
Entities with control, joint control or significant influence over the group
95,116
HANDEL GROUP LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 31 DECEMBER 2022
- 33 -
30
Cash generated from/(absorbed by) group operations
2022
£
Profit for the Period after tax
97,107
Adjustments for:
Finance costs
91,518
Amortisation and impairment of intangible assets
85,260
Depreciation and impairment of tangible fixed assets
85,021
Movements in working capital:
Increase in stocks
(198,557)
Decrease in debtors
1,376,602
Decrease in creditors
(1,288,098)
Cash generated from/(absorbed by) operations
248,853
31
Analysis of changes in net debt - group
2 September 2022
Cash flows
31 December 2022
£
£
£
Cash at bank and in hand
-
837,843
837,843
Borrowings excluding overdrafts
-
(3,078,397)
(3,078,397)
Obligations under finance leases
-
(3,039,489)
(3,039,489)
-
(5,280,043)
(5,280,043)
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