Company registration number 01551536 (England and Wales)
PHIL HOLDEN FASTENERS LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 AUGUST 2023
PHIL HOLDEN FASTENERS LIMITED
COMPANY INFORMATION
Directors
Mr G S Lewin
Ms S E Twiggs
Secretary
S E Twiggs
Company number
01551536
Registered office
Unit 23
Cottage Lane Ind. Est.
Swannington Road
Broughton Astley
Leicester
LE9 6TU
Auditor
BK Plus Audit Limited
2 Highlands Court
Cranmore Avenue
Solihull
West Midlands
B90 4LE
PHIL HOLDEN FASTENERS LIMITED
CONTENTS
Page
Strategic report
1 - 2
Directors' report
3
Independent auditor's report
4 - 6
Profit and loss account
7
Statement of comprehensive income
8
Balance sheet
9
Statement of changes in equity
10
Statement of cash flows
11
Notes to the financial statements
12 - 26
PHIL HOLDEN FASTENERS LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 31 AUGUST 2023
- 1 -

The directors present the strategic report for the year ended 31 August 2023.

Principal activities

The principal activity of the Company is that of the supply of threaded fasteners to the construction, architectural and engineering sectors.

Fair review of the business

The financial results for the year and financial position of the Company are as shown in the annexed financial statements. The Directors are satisfied with the performance of the Company for the year and the financial position as at 31 August 2023.

 

The trading position of the Company shows a 27% increase in turnover from the previous year reflecting a strong performance irrespective of the external world economic conditions. This was achieved by continued investment in capital projects, employees training and building a positive working environment.

Key Performance indicators

The Company monitors its Key Performance Indicators (KPl's) which are measured against our business plan. The integrity of our KPl's is monitored to ensure reliance can be placed upon the figures provided.

 

The Companies return on capital employed was 78% compared with 55% in the previous year while the gross margin has improved to 38.94% from 28.73% last year. The net profit before taxation compared to sales was 16.9% (last year 8.1%).

 

The directors consider that given the economic environment in which the Company operated during the year the Company KPl's are very satisfactory.

Future Developments and Research and Development

Over the last four decades the Company has continued to evolve and deliver solutions for our customers. The Company remains committed to investment in our core products and providing innovative solutions to our customers and delivering the quality of service the Company is renowned for. This is paramount within the Company's strategic plans.

 

We are confident that the strategic actions we take will ensure the Company makes satisfactory progress. This is reflected in the current years trading and financial position at the date of the audit report which is well ahead of last year.

 

The Company's long-term success is built upon the quality of our product and a high standard of customer service. We will continue to monitor our efficiency and performance ensuring the Group continues to further benefit its stakeholders for future years.

PHIL HOLDEN FASTENERS LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 AUGUST 2023
- 2 -
Principal Risks and uncertainties

We aim to present a balanced and comprehensive review of the principal risks and uncertainties that affect the Group. As part of our review the Directors consider factors which could seriously affect the Groups performance.

 

The uncertain medium to long term effect of the ongoing war in Ukraine and other world conflicts with the resultant impact on supply chain means the Company must be aware of the impact on product lead times. In addition, the changing UK economy and political environment dictates that the Company must retain close control over its working capital to reduce the impact of any interest rate fluctuations. Given the risks the Directors remain committed to evolving and acting swiftly to combat any issues that may arise.

 

To avoid exposure to major financial risks noted the Directors enforce prudent accounting policies resulting in ongoing increased financial stability. Therefore, the directors believe that the Company's controls will continue to result in adequate available reserves to mitigate the above risks.

On behalf of the board

Mr G S Lewin
Director
20 February 2024
PHIL HOLDEN FASTENERS LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 AUGUST 2023
- 3 -

The directors present their annual report and financial statements for the year ended 31 August 2023.

Results and dividends

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

Ordinary dividends were paid amounting to £470,875. The directors do not recommend payment of a final dividend.

Directors

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

Mr G S Lewin
Ms S E Twiggs
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 company and of the profit or loss of the company 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 company’s transactions and disclose with reasonable accuracy at any time the financial position of the company and enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

Statement 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 company’s auditor 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 company’s auditor is aware of that information.

Medium-sized companies exemption

This report has been prepared in accordance with the provisions applicable to companies entitled to the medium-sized companies exemption.

On behalf of the board
Mr G S Lewin
Director
20 February 2024
PHIL HOLDEN FASTENERS LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF PHIL HOLDEN FASTENERS LIMITED
- 4 -

Qualified opinion

We have audited the financial statements of Phil Holden Fasteners Limited (the 'company') for the year ended 31 August 2023 which comprise the profit and loss account, the statement of comprehensive income, the balance sheet, the statement of changes in equity, the 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, except for the possible effects on the corresponding figures of the matter described in the Basis for Qualified Opinion paragraph, the financial statements:

Basis for qualified opinion

We were not appointed as auditor of the company until after 31 August 2021 and thus did not observe the counting of physical stock at the end of that year. We were unable to satisfy ourselves by alternative means concerning the stock quantities of £2,350,631 held at 31 August 2021 by using other audit procedures. Consequently we were unable to determine whether there was any consequential effect of cost of sales for the year ended 31 August 2022. Our audit opinion on the financial statements for the year ended 31 August 2022 was modified accordingly. Our opinion on the current year's financial statements is also modified because of the possible effect of this matter on the compararability of the current year's figures and the corresponding amounts.

 

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 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 qualified 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 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.

 

PHIL HOLDEN FASTENERS LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF PHIL HOLDEN FASTENERS LIMITED
- 5 -

Opinions on other matters prescribed by the Companies Act 2006

Except for the possible effects of the matter described in the basis for qualified opinion section of our report In our opinion, based on the work undertaken in the course of our audit:

Matters on which we are required to report by exception

Arising solely from the limitation on the scope of our work relating to stock as at 31 August 2021 referred to above:

 

Except for the matter described in the basis of qualified opinion section of our report, in the light of the knowledge and understanding of the company and its environment obtained in the course of the audit, we have not identified material misstatements in the strategic report or the directors' report.

 

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 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 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.

The extent to which our procedures are capable of detecting irregularities, including fraud, is detailed below.

 

- Enquiry of management, those charged with governance around actual and potential litigation and claims.

- Enquiry of entity staff to identify any instances of non-compliance with laws and regulations.

- Reviewing financial statement disclosures and testing to supporting documentation to assess compliance with applicable laws and regulations.

- Performing audit work over the risk of management override of controls, including testing of journal entries and other adjustments for appropriateness, evaluating the business rationale of significant transactions outside the normal course of business and reviewing accounting estimates for bias.

- Performing audit work over the risk of understatement of turnover including analytical review and obtaining corroborated explanations from Management.

PHIL HOLDEN FASTENERS LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF PHIL HOLDEN FASTENERS LIMITED
- 6 -

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.

Paul Mannion FCCA, FCA
Senior Statutory Auditor
For and on behalf of BK Plus Audit Limited
20 February 2024
Chartered Certified accountants
Statutory Auditor
2 Highlands Court
Cranmore Avenue
Solihull
West Midlands
B90 4LE
PHIL HOLDEN FASTENERS LIMITED
PROFIT AND LOSS ACCOUNT
FOR THE YEAR ENDED 31 AUGUST 2023
- 7 -
2023
2022
Notes
£
£
Turnover
3
17,008,666
13,390,113
Cost of sales
(10,386,013)
(9,543,237)
Gross profit
6,622,653
3,846,876
Selling and distribution costs
(1,707,252)
(1,397,330)
Administrative expenses
(1,878,168)
(1,276,618)
Other operating income
34
180
Operating profit
4
3,037,267
1,173,108
Interest receivable and similar income
7
-
0
9
Interest payable and similar expenses
8
(158,942)
(86,748)
Profit before taxation
2,878,325
1,086,369
Tax on profit
9
(651,176)
(210,777)
Profit for the financial year
2,227,149
875,592

The profit and loss account has been prepared on the basis that all operations are continuing operations.

PHIL HOLDEN FASTENERS LIMITED
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 AUGUST 2023
- 8 -
2023
2022
£
£
Profit for the year
2,227,149
875,592
Other comprehensive income
Revaluation of tangible fixed assets
(14,024)
274,038
Total comprehensive income for the year
2,213,125
1,149,630
PHIL HOLDEN FASTENERS LIMITED
BALANCE SHEET
AS AT
31 AUGUST 2023
31 August 2023
- 9 -
2023
2022
Notes
£
£
£
£
Fixed assets
Goodwill
11
16,000
32,000
Tangible assets
12
939,100
558,116
Investments
13
50
50
955,150
590,166
Current assets
Stocks
15
3,194,894
3,237,351
Debtors
16
3,090,398
3,734,560
Cash at bank and in hand
116,287
40,721
6,401,579
7,012,632
Creditors: amounts falling due within one year
17
(2,985,877)
(4,787,162)
Net current assets
3,415,702
2,225,470
Total assets less current liabilities
4,370,852
2,815,636
Creditors: amounts falling due after more than one year
18
(384,343)
(659,283)
Provisions for liabilities
Deferred tax liability
21
103,282
29,400
(103,282)
(29,400)
Net assets
3,883,227
2,126,953
Capital and reserves
Called up share capital
23
2,501
2,501
Share premium account
799
799
Revaluation reserve
260,014
274,038
Capital redemption reserve
22,500
22,500
Profit and loss reserves
3,597,413
1,827,115
Total equity
3,883,227
2,126,953

These financial statements have been prepared in accordance with the provisions relating to medium-sized companies.true

The financial statements were approved by the board of directors and authorised for issue on 20 February 2024 and are signed on its behalf by:
Ms S E Twiggs
Director
Company registration number 01551536 (England and Wales)
PHIL HOLDEN FASTENERS LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 AUGUST 2023
- 10 -
Share capital
Share premium account
Revaluation reserve
Capital redemption reserve
Profit and loss reserves
Total
Notes
£
£
£
£
£
£
Balance at 1 September 2021
3,150
-
0
-
0
21,850
1,779,229
1,804,229
Year ended 31 August 2022:
Profit
-
-
-
-
875,592
875,592
Other comprehensive income:
Revaluation of tangible fixed assets
-
-
274,038
-
-
274,038
Total comprehensive income
-
-
274,038
-
875,592
1,149,630
Issue of share capital
23
1
799
-
-
-
800
Dividends
10
-
-
-
-
(680,206)
(680,206)
Own shares acquired
-
-
-
-
(147,500)
(147,500)
Redemption of shares
23
(650)
-
0
-
650
-
0
-
0
Balance at 31 August 2022
2,501
799
274,038
22,500
1,827,115
2,126,953
Year ended 31 August 2023:
Profit
-
-
-
-
2,227,149
2,227,149
Other comprehensive income:
Revaluation of tangible fixed assets
-
-
(14,024)
-
-
(14,024)
Total comprehensive income
-
-
(14,024)
-
2,227,149
2,213,125
Dividends
10
-
-
-
-
(470,875)
(470,875)
Transfers
-
-
-
0
-
14,024
14,024
Balance at 31 August 2023
2,501
799
260,014
22,500
3,597,413
3,883,227
PHIL HOLDEN FASTENERS LIMITED
STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 AUGUST 2023
- 11 -
2023
2022
Notes
£
£
£
£
Cash flows from operating activities
Cash generated from operations
28
3,603,109
283,823
Interest paid
(158,942)
(86,748)
Tax paid
(199,662)
(145,762)
Net cash inflow from operating activities
3,244,505
51,313
Investing activities
Purchase of tangible fixed assets
(499,558)
(93,758)
Proceeds from disposal of tangible fixed assets
9,900
35,000
Interest received
-
0
9
Net cash used in investing activities
(489,658)
(58,749)
Financing activities
Proceeds from issue of shares
-
0
800
Purchase of own shares
-
0
(147,500)
Proceeds from new bank loans
-
0
731,712
Repayment of bank loans
(2,202,797)
(270,466)
Payment of finance leases obligations
(5,609)
-
0
Dividends paid
(470,875)
(680,206)
Net cash used in financing activities
(2,679,281)
(365,660)
Net increase/(decrease) in cash and cash equivalents
75,566
(373,096)
Cash and cash equivalents at beginning of year
40,721
413,817
Cash and cash equivalents at end of year
116,287
40,721
PHIL HOLDEN FASTENERS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 AUGUST 2023
- 12 -
1
Accounting policies
Company information

Phil Holden Fasteners Limited is a private company limited by shares incorporated in England and Wales. The registered office is Unit 23, Cottage Lane Ind. Est., Swannington Road, Broughton Astley, Leicester, LE9 6TU.

1.1
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 has taken advantage of the exemption under section 400 of the Companies Act 2006 not to prepare consolidated accounts. The financial statements present information about the company as an individual entity and not about its group.

 

Phil Holden Fasteners Limited is a wholly owned subsidiary of PHF Holdings Limited and the results of Phil Holden Fasteners Limited are included in the consolidated financial statements of PHF Holdings Limited which are available from Unit 23, Cottage Lane Ind. Est.,Swannington Road, Broughton Astley, Leicester, United Kingdom, LE9 6TU.

1.2
Going concern

Atruet the time of approving the financial statements, the directors have a reasonable expectation that the company 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.

1.3
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.

1.4
Intangible fixed assets - goodwill

Goodwill represents the excess of the cost of acquisition of a business over the value of net assets acquired in 2020. Goodwill is considered to have a finite useful life and is amortised on a systematic basis over its expected life, which is five years.

 

1.5
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.

PHIL HOLDEN FASTENERS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 AUGUST 2023
1
Accounting policies
(Continued)
- 13 -

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:

Freehold land and buildings
2% on cost
Plant and equipment
33% straight line and 15% on reducing balance
Motor vehicles
20% straight line

Freehold land is not depreciated.

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 credited or charged to profit or loss.

1.6
Fixed asset investments

Interests in subsidiaries, associates and jointly controlled entities are initially measured at cost and subsequently measured at cost less any accumulated impairment losses. The investments are assessed for impairment at each reporting date and any impairment losses or reversals of impairment losses are recognised immediately in profit or loss.

A subsidiary is an entity controlled by the company. 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 company considers that it has significant influence where it has the power to participate in the financial and operating decisions of the associate.

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

1.7
Impairment of fixed assets

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.

1.8
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.

 

PHIL HOLDEN FASTENERS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 AUGUST 2023
1
Accounting policies
(Continued)
- 14 -

Cost is calculated based on a First in First out (FIFO) basis.

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.

Goods are recognised in stock when the title passes to the company. This is considered to be when the goods are delivered to the premises and not when the goods are shipped.

1.9
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.

1.10
Financial instruments

The company has elected to apply the provisions of Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instruments Issues’ of FRS 102 to all of its financial instruments.

 

Financial instruments are recognised in the company's balance sheet when the company 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 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.

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.

PHIL HOLDEN FASTENERS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 AUGUST 2023
1
Accounting policies
(Continued)
- 15 -
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 company 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 company 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.

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 company’s contractual obligations expire or are discharged or cancelled.

1.11
Equity instruments

Equity instruments issued by the company 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 company.

1.12
Taxation

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

PHIL HOLDEN FASTENERS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 AUGUST 2023
1
Accounting policies
(Continued)
- 16 -
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 company’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 is recognised in respect of all timing differences that have originated but not reversed at the balance sheet date.

 

Timing differences arise from the inclusion of income and expenses in tax assessments in periods different from those in which they are recognised in financial statements. Deferred tax is measured using tax rates and laws that have been enacted or substantially enacted by the year end and that are expected to apply to the reversal of the timing difference.

 

Unrelieved tax losses and other deferred tax assets are recognised only to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits.

1.13
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.

1.14
Retirement benefits

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

1.15
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.

1.16
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.

1.17

Factoring debts

The debtors that are factored are included within debtors. The balance with the factoring company is included in Loans in Creditors.

PHIL HOLDEN FASTENERS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 AUGUST 2023
- 17 -
2
Judgements and key sources of estimation uncertainty

In the application of the company’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.

3
Turnover and other revenue
2023
2022
£
£
Turnover analysed by geographical market
UK
14,494,833
11,315,876
Overseas
2,513,833
2,074,237
17,008,666
13,390,113
2023
2022
£
£
Other revenue
Interest income
-
9
4
Operating profit
2023
2022
Operating profit for the year is stated after charging/(crediting):
£
£
Fees payable to the company's auditor for the audit of the company's financial statements
22,500
13,500
Depreciation of owned tangible fixed assets
109,913
63,885
Depreciation of tangible fixed assets held under finance leases
8,661
721
(Profit)/loss on disposal of tangible fixed assets
(9,900)
2,360
Amortisation of intangible assets
16,000
16,000
5
Employees

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

2023
2022
Number
Number
Admin and directors
7
8
Sales and purchases
17
16
Warehouse
38
30
Total
62
54
PHIL HOLDEN FASTENERS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 AUGUST 2023
5
Employees
(Continued)
- 18 -

Their aggregate remuneration comprised:

2023
2022
£
£
Wages and salaries
1,967,386
1,597,809
Social security costs
191,979
162,054
Pension costs
210,149
83,064
2,369,514
1,842,927
6
Directors' remuneration
2023
2022
£
£
Remuneration for qualifying services
248,814
169,398
Company pension contributions to defined contribution schemes
155,159
38,294
403,973
207,692

The number of directors for whom retirement benefits are accruing under defined contribution schemes amounted to 2 (2022 - 3).

Remuneration disclosed above include the following amounts paid to the highest paid director:
2023
2022
£
£
Remuneration for qualifying services
129,481
-
Company pension contributions to defined contribution schemes
77,086
-
7
Interest receivable and similar income
2023
2022
£
£
Interest income
Interest on bank deposits
-
0
9
2023
2022
Investment income includes the following:
£
£
Interest on financial assets not measured at fair value through profit or loss
-
0
9
PHIL HOLDEN FASTENERS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 AUGUST 2023
- 19 -
8
Interest payable and similar expenses
2023
2022
£
£
Interest on financial liabilities measured at amortised cost:
Interest on bank loans
157,150
86,748
Other finance costs:
Interest on finance leases and hire purchase contracts
1,792
-
158,942
86,748
9
Taxation
2023
2022
£
£
Current tax
UK corporation tax on profits for the current period
577,295
199,663
Deferred tax
Origination and reversal of timing differences
73,881
11,114
Total tax charge
651,176
210,777

The actual charge for the year can be reconciled to the expected charge for the year based on the profit or loss and the standard rate of tax as follows:

2023
2022
£
£
Profit before taxation
2,878,325
1,086,369
Expected tax charge based on the standard rate of corporation tax in the UK of 25.00% (2022: 19.00%)
719,581
206,410
Tax effect of expenses that are not deductible in determining taxable profit
8,473
6,985
Adjustments in respect of prior years
9,284
-
0
Effect of change in corporation tax rate
(93,509)
-
0
Depreciation on assets not qualifying for tax allowances
4,506
760
Amortisation on assets not qualifying for tax allowances
4,000
3,040
Dividend income
(9)
(34)
Capital allowances-super deduction
(1,150)
(6,384)
Taxation charge for the year
651,176
210,777
10
Dividends
2023
2022
£
£
Interim paid
470,875
680,206
PHIL HOLDEN FASTENERS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 AUGUST 2023
- 20 -
11
Intangible fixed assets
Goodwill
£
Cost
At 1 September 2022 and 31 August 2023
80,000
Amortisation and impairment
At 1 September 2022
48,000
Amortisation charged for the year
16,000
At 31 August 2023
64,000
Carrying amount
At 31 August 2023
16,000
At 31 August 2022
32,000
12
Tangible fixed assets
Freehold land and buildings
Plant and equipment
Motor vehicles
Total
£
£
£
£
Cost or valuation
At 1 September 2022
380,000
496,302
-
0
876,302
Additions
-
0
349,559
149,999
499,558
Disposals
-
0
(111,962)
-
0
(111,962)
At 31 August 2023
380,000
733,899
149,999
1,263,898
Depreciation and impairment
At 1 September 2022
-
0
318,186
-
0
318,186
Depreciation charged in the year
18,024
84,342
16,208
118,574
Eliminated in respect of disposals
-
0
(111,962)
-
0
(111,962)
At 31 August 2023
18,024
290,566
16,208
324,798
Carrying amount
At 31 August 2023
361,976
443,333
133,791
939,100
At 31 August 2022
380,000
178,116
-
0
558,116

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

2023
2022
£
£
Plant and equipment
16,862
25,523
PHIL HOLDEN FASTENERS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 AUGUST 2023
12
Tangible fixed assets
(Continued)
- 21 -

Freehold land and buildings with a carrying amount of £361,976 have been pledged to secure borrowings of the company. The company is therefore not permitted to sell the asset or pledge the asset as security for other borrowings without the prior approval of the lender.

Freehold Land and buildings include Land at carrying value of £55,550 (cost £34,244).

The following assets are carried at valuation. If the assets were measured using the cost model, the carrying amounts would be as follows:

Freehold Property
2023
2022
£
£
Cost
234,244
234,244
Accumulated depreciation
(132,282)
(128,282)
Carrying value
101,962
105,962
13
Fixed asset investments
2023
2022
Notes
£
£
Investments in subsidiaries
14
50
50
14
Subsidiaries

Details of the company's subsidiaries at 31 August 2023 are as follows:

Name of undertaking
Registered office
Nature of business
Class of
% Held
shares held
Direct
Freshspirit Limited
England and Wales
Dormant
Ordinary shares of £1 each
100.00
The aggregate capital and reserves and the result for the year of the subsidiaries noted above was as follows:
Name of undertaking
Capital and Reserves
Profit/(Loss)
£
£
Freshspirit Limited
100
-
0
15
Stocks
2023
2022
£
£
Finished goods and goods for resale
3,194,894
3,237,351
PHIL HOLDEN FASTENERS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 AUGUST 2023
- 22 -
16
Debtors
2023
2022
Amounts falling due within one year:
£
£
Trade debtors
2,908,514
3,561,467
Amounts owed by group undertakings
-
0
20,215
Other debtors
6,203
-
0
Prepayments and accrued income
175,681
152,878
3,090,398
3,734,560

The trade debtors are subject to factoring arrangements. The associated liability recognised in creditors amounts to £443,558 ( 2022:£2,248,327).

17
Creditors: amounts falling due within one year
2023
2022
Notes
£
£
Bank loans
20
586,678
2,519,939
Obligations under finance leases
19
5,659
5,864
Trade creditors
1,429,927
1,710,714
Amounts owed to group undertakings
47,119
100
Corporation tax
577,295
199,663
Other taxation and social security
162,506
174,978
Other creditors
8,266
7,694
Accruals and deferred income
168,427
168,210
2,985,877
4,787,162
18
Creditors: amounts falling due after more than one year
2023
2022
Notes
£
£
Bank loans
20
369,366
638,902
Obligations under finance leases
19
14,977
20,381
384,343
659,283
Amounts included above which fall due after five years are as follows:
Payable by instalments
-
25,393
PHIL HOLDEN FASTENERS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 AUGUST 2023
- 23 -
19
Finance lease obligations
2023
2022
Future minimum lease payments due under finance leases:
£
£
Within one year
5,659
5,864
In two to five years
14,977
20,381
20,636
26,245
20
Loans
2023
2022
£
£
Bank loans
956,044
3,158,841
Payable within one year
586,678
2,519,939
Payable after one year
369,366
638,902

Bank loans includes a mortgage totalling £204,154 which is secured on a legal charge over the company's freehold property.

 

In addition other Bank loans are secured by fixed and floating charge over all assets.

21
Deferred taxation

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

Liabilities
Liabilities
2023
2022
Balances:
£
£
Accelerated capital allowances
103,282
29,400
2023
Movements in the year:
£
Liability at 1 September 2022
29,400
Charge to profit or loss
73,882
Liability at 31 August 2023
103,282
PHIL HOLDEN FASTENERS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 AUGUST 2023
- 24 -
22
Retirement benefit schemes
2023
2022
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
210,149
83,064

The company operates a defined contribution pension scheme for all qualifying employees. The assets of the scheme are held separately from those of the company in an independently administered fund.

23
Share capital
2023
2022
2023
2022
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary A of 1p each
250,000
250,000
2,500
2,500
Ordinary B of 1p each
95
95
1
1
Ordinary C of 1p each
5
5
-
-
250,100
250,100
2,501
2,501
24
Financial commitments, guarantees and contingent liabilities

The Parent company, PHF Holdings Limited, purchased the entire issued share capital of Phil Holden Fasteners Limited for a total consideration of £2,043,000. The total consideration consists of issued share capital of £8,000, and a balance of £2,035,000 which is payable to the previous shareholder. Amounts totalling £915,000 were paid as at 31 August 2023. These payments were funded by the payment of dividends from Phil Holden Fasteners Limited to PHF Holdings Limited. A suitable loan agreement will be put in place by Phil Holden Fasteners Limited to pay the remaining four equal annual instalments of £280,000 until January 2027.

25
Operating lease commitments

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

2023
2022
£
£
Within one year
116,466
125,285
Between two and five years
183,193
210,232
In over five years
100,664
143,370
400,323
478,887
26
Related party transactions
Remuneration of key management personnel

The aggregate of Key Management Remuneration was £329,988 (2022: £217,173)

PHIL HOLDEN FASTENERS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 AUGUST 2023
26
Related party transactions
(Continued)
- 25 -
Transactions with related parties

During the year the company entered into the following transactions with related parties:

Name of related party
Nature of relationship
PHF Holdings Limited
Parent
Description of
Income
Payments
transaction
2023
2022
2023
2022
£
£
£
£
PHF Holdings Limited
Dividend
-
0
-
0
470,875
635,000
Balances with related parties
Amounts owed by
Amounts owed to
related parties
related parties
2023
2022
2023
2022
£
£
£
£
Freshspirit Limited
-
0
-
0
100
100
PHF Holdings Limited
-
0
20,215
47,019
-
0
27
Ultimate controlling party

The company is a wholly owned subsidiary of PHF Holdings Limited, a company registered in England and Wales. The registered office of the parent company is Unit 23, Cottage Lane Ind. Est. Swannington Road, Broughton Astley, Leicester, LE9 6TU. Copies of the consolidated accounts can be obtained from the registered office.

PHIL HOLDEN FASTENERS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 AUGUST 2023
- 26 -
28
Cash generated from operations
2023
2022
£
£
Profit for the year after tax
2,227,149
875,592
Adjustments for:
Taxation charged
651,176
210,777
Finance costs
158,942
86,748
Investment income
-
0
(9)
(Gain)/loss on disposal of tangible fixed assets
(9,900)
2,360
Amortisation and impairment of intangible assets
16,000
16,000
Depreciation and impairment of tangible fixed assets
118,574
64,606
Movements in working capital:
Decrease/(increase) in stocks
42,457
(886,720)
Decrease/(increase) in debtors
644,162
(416,951)
(Decrease)/increase in creditors
(245,451)
331,420
Cash generated from operations
3,603,109
283,823
29
Analysis of changes in net debt
1 September 2022
Cash flows
31 August 2023
£
£
£
Cash at bank and in hand
40,721
75,566
116,287
Borrowings excluding overdrafts
(3,158,841)
2,202,797
(956,044)
Obligations under finance leases
(26,245)
5,609
(20,636)
(3,144,365)
2,283,972
(860,393)
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