REGISTERED NUMBER: 08780150 (England and Wales) |
GROUP STRATEGIC REPORT, |
REPORT OF THE DIRECTORS AND |
CONSOLIDATED FINANCIAL STATEMENTS |
FOR THE YEAR ENDED 31 OCTOBER 2023 |
FOR |
HBS ELECTRONICS (HOLDINGS) LIMITED |
REGISTERED NUMBER: 08780150 (England and Wales) |
GROUP STRATEGIC REPORT, |
REPORT OF THE DIRECTORS AND |
CONSOLIDATED FINANCIAL STATEMENTS |
FOR THE YEAR ENDED 31 OCTOBER 2023 |
FOR |
HBS ELECTRONICS (HOLDINGS) LIMITED |
HBS ELECTRONICS (HOLDINGS) LIMITED (REGISTERED NUMBER: 08780150) |
CONTENTS OF THE CONSOLIDATED FINANCIAL STATEMENTS |
for the year ended 31 October 2023 |
Page |
Company Information | 1 |
Group Strategic Report | 2 |
Report of the Directors | 4 |
Report of the Independent Auditors | 5 |
Consolidated Income Statement | 9 |
Consolidated Other Comprehensive Income | 10 |
Consolidated Balance Sheet | 11 |
Company Balance Sheet | 12 |
Consolidated Statement of Changes in Equity | 13 |
Company Statement of Changes in Equity | 14 |
Consolidated Cash Flow Statement | 15 |
Notes to the Consolidated Cash Flow Statement | 16 |
Notes to the Consolidated Financial Statements | 17 |
HBS ELECTRONICS (HOLDINGS) LIMITED |
COMPANY INFORMATION |
for the year ended 31 October 2023 |
DIRECTORS: |
REGISTERED OFFICE: |
REGISTERED NUMBER: |
AUDITORS: |
Chartered Certified Accountants |
19-20 Bourne Court |
Southend Road |
Woodford Green |
Essex |
IG8 8HD |
HBS ELECTRONICS (HOLDINGS) LIMITED (REGISTERED NUMBER: 08780150) |
GROUP STRATEGIC REPORT |
for the year ended 31 October 2023 |
The directors present their strategic report of the company and the group for the year ended 31 October 2023. |
REVIEW OF BUSINESS |
The group had a successful year with trading returning to pre-pandemic levels across many of the sectors of the business. Group turnover was at £18.8m (2022: £21.6m) having sold one of its subsidiary company's (Didsbury Engineering Ltd) at the end of February 2023. Group operating profit (excluding exceptional items was £1.4m (2022: £3.3m). The gain on the sale of Didsbury of £13.1m increased profit before tax to £14.6m. |
In May 2023, the owners sold 80% of the business to an Employee Ownership Trust. A contribution of £14.2m was made to the Trust during the year. |
The state of affairs at the balance sheet date is considered to be satisfactory with group net assets of £11.0m (2022: £11.1m). |
A review of the group's activities is given below:- |
The group's main activities centre around aviation, defence and ancillary services and include headset design and manufacture; hoist and lifting gear for civil and military aircraft; plastic moulding and all forms of precision engineering. |
Members of the group include |
- HBS Electronics Limited, an earpiece design business based in Sudbury, Suffolk. |
- Linton Plastic Moulders Limited, a plastic moulding business based in Sudbury, Suffolk. |
- Clement Clarke Communications, a communications product business based in Sudbury, Suffolk. |
- Flycom Avionics Limited, an avionics equipment provider based in Sudbury, Suffolk. |
- Didsbury Engineering Limited, a lift and hoist manufacturer based in Manchester - this business was sold in February 2023. |
- Oldbury Engineering Limited, a precision engineering business based in Horsham, Surrey. |
- Redmayne Engineering Limited, a precision engineering business based in Brockenhurst, Hampshire. |
- E.D.S Engineering Limited, a precision machining and tooling business based in Chelmsford. |
- Sensorcom Limited, a communications and product services business based in Beckenham. |
The group continues to expand its service offering to its major customers which includes many blue chip companies in the aviation support services industry as well as governments. |
Trading in all subsidiaries has been satisfactory during the period under review. |
The key financial performance indicators for the group are as follows:- |
2023 | 2022 | Measure |
Gross profit margin | 44% | 52% | Gross profit/Turnover |
Debtors days | 81 days | 117 days | Trade debtors/Turnover |
Creditors days | 65 days | 76 days | Trade creditors/Cost of Sales |
HBS ELECTRONICS (HOLDINGS) LIMITED (REGISTERED NUMBER: 08780150) |
GROUP STRATEGIC REPORT |
for the year ended 31 October 2023 |
PRINCIPAL RISKS AND UNCERTAINTIES |
The group faces the usual business risks of competition within its sector and pressure on prices. These risks are mitigated by the directors continuously driving the business forward into new product areas and niche markets where prices can be maintained at profitable levels. The issue of increased manufacturing costs in the UK has been addressed by making use of a factory facility which the group has access to in Serbia. |
The principal risks and uncertainties affecting the group include: |
- Retention of customers - the company maintains strong relationships with each of its key customers and has established procedures for monitoring performance and service levels. |
- Competitive risk - the company's expertise and efficiency in its marketplace and its diversity of operations helps to mitigate the possible effect of action by any one single competitor. |
- Manufacturing labour costs - the group has access to manufacturing capabilities in a factory facility in Serbia. This has allowed it to maintain tight control over its manufacturing cost base whilst still maintaining excellent quality in its products. |
- Quality control risks - the group maintains strict quality control over its products. It holds appropriate approvals with the Civil Aviation Authority (CAA) and the Federal Aviation Authority (FAA) along with other organisations to enable it to carry on its activities in various jurisdictions around the world. |
The directors believe that the group has adequate resources in place to meet its forecast trading requirements and all risks and uncertainties are managed appropriately. |
FUTURE DEVELOPMENTS |
The group continues to develop and expand its product range both within its own research and development capabilities and by the acquisition of other businesses as and when appropriate opportunities arise both in the UK and worldwide. As the group expands, further market opportunities develop and the directors are confident of sustainable future growth in their precision engineering sector. |
EMPLOYEES |
The group operates an equal opportunities policy. The aim of this policy is to ensure that there should be equal opportunity for all and this applies to external recruitment, internal appointments, terms of employment, conditions of service and opportunity for training and promotion regardless of gender, ethnic origin or disability. |
Disabled persons are given full and fair consideration for all types of vacancy in as much as the opportunities available are constrained by the practical limitations of the disability. Should, for whatever reason, an employee of the group becomes disabled whilst in the employment, every step, where appropriate will be taken to assist with rehabilitation and suitable re-training. |
The group maintains its own health, safety and environmental policies covering all aspect of its operations. Regular meetings and inspections take place to ensure all legal requirements are adhered to and that the group is responsive to the needs of the employees and the environment. |
FINANCIAL INSTRUMENTS |
The group settled its external finance following the sale of Didsbury when it redeemed its revolving credit facility with Clydesdale Bank. The group has significant cash reserves of its own. |
The group has not entered into any hedging arrangements as the directors perceive the exchange rate risk to the business to be low. |
ON BEHALF OF THE BOARD: |
30 July 2024 |
HBS ELECTRONICS (HOLDINGS) LIMITED (REGISTERED NUMBER: 08780150) |
REPORT OF THE DIRECTORS |
for the year ended 31 October 2023 |
The directors present their report with the financial statements of the company and the group for the year ended 31 October 2023. |
PRINCIPAL ACTIVITY |
The principal activity of the group in the year under review was that of precision engineering mainly in the aviation, defence and ancillary sectors. |
DIVIDENDS |
No dividends will be distributed for the year ended 31 October 2023. |
DIRECTORS |
Other changes in directors holding office are as follows: |
STATEMENT OF DIRECTORS' RESPONSIBILITIES |
The directors are responsible for preparing the Group Strategic Report, the Report of the Directors and the financial statements in accordance with applicable law and regulations. |
Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the company and the group and of the profit or loss of the group for that period. In preparing these financial statements, the directors are required to: |
- | select suitable accounting policies and then apply them consistently; |
- | make judgements and accounting estimates that are reasonable and prudent; |
- | prepare the financial statements on the going concern basis unless it is inappropriate to presume that the company will continue in business. |
The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the company's and the group's transactions and disclose with reasonable accuracy at any time the financial position of the company and the group 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 the group and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities. |
STATEMENT AS TO DISCLOSURE OF INFORMATION TO AUDITORS |
So far as the directors are aware, there is no relevant audit information (as defined by Section 418 of the Companies Act 2006) of which the group's auditors are unaware, and each director has taken all the steps that he ought to have taken as a director in order to make himself aware of any relevant audit information and to establish that the group's auditors are aware of that information. |
ON BEHALF OF THE BOARD: |
REPORT OF THE INDEPENDENT AUDITORS TO THE MEMBERS OF |
HBS ELECTRONICS (HOLDINGS) LIMITED |
Opinion |
We have audited the financial statements of HBS Electronics (Holdings) Limited (the 'parent company') and its subsidiaries (the 'group') for the year ended 31 October 2023 which comprise the Consolidated Income Statement, Consolidated Other Comprehensive Income, Consolidated Balance Sheet, Company Balance Sheet, Consolidated Statement of Changes in Equity, Company Statement of Changes in Equity, Consolidated Cash Flow Statement and Notes to the Consolidated Cash Flow Statement, Notes to the Financial Statements, including a summary of 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: |
- | give a true and fair view of the state of the group's and of the parent company affairs as at 31 October 2023 and of the group's profit for the year then ended; |
- | have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and |
- | have been prepared in accordance with the requirements of the Companies Act 2006. |
Basis for opinion |
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditors' responsibilities for the audit of the financial statements section of our report. We are independent of the group in accordance with the ethical requirements that are relevant to our audit of the financial statements in the 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 the parent company's ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue. |
Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report. |
Other information |
The directors are responsible for the other information. The other information comprises the information in the Group Strategic Report and the Report of the Directors, but does not include the financial statements and our Report of the Auditors thereon. |
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. |
In connection with our audit of the financial statements, 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 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 the audit: |
- | the information given in the Group Strategic Report and the Report of the Directors for the financial year for which the financial statements are prepared is consistent with the financial statements; and |
- | the Group Strategic Report and the Report of the Directors have been prepared in accordance with applicable legal requirements. |
REPORT OF THE INDEPENDENT AUDITORS TO THE MEMBERS OF |
HBS ELECTRONICS (HOLDINGS) LIMITED |
Matters on which we are required to report by exception |
In the light of the knowledge and understanding of the group and the parent company and its environment obtained in the course of the audit, we have not identified material misstatements in the Group Strategic Report or the Report of the Directors. |
We have nothing to report in respect of the following matters where the Companies Act 2006 requires us to report to you if, in our opinion: |
- | adequate accounting records have not been kept by the parent company, or returns adequate for our audit have not been received from branches not visited by us; or |
- | the parent company financial statements are not in agreement with the accounting records and returns; or |
- | certain disclosures of directors' remuneration specified by law are not made; or |
- | we have not received all the information and explanations we require for our audit. |
Responsibilities of directors |
As explained more fully in the Statement of Directors' Responsibilities set out on page four, 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 necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. |
In preparing the financial statements, the directors are responsible for assessing the group's and the parent company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the group or the parent company or to cease operations, or have no realistic alternative but to do so. |
REPORT OF THE INDEPENDENT AUDITORS TO THE MEMBERS OF |
HBS ELECTRONICS (HOLDINGS) LIMITED |
Auditors' responsibilities for the audit of the financial statements |
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue a Report of the Auditors 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. |
Our approach to identifying and assessing the risks of material misstatement in respect of irregularities, including fraud and non-compliance with laws and regulations, was as follows: |
- the engagement partner ensured that the engagement team collectively had the appropriate competence, capabilities and skills to identify or recognise non-compliance with applicable laws and regulations; |
- we identified the laws and regulations applicable to the group through discussions with directors and other management, and from our commercial knowledge and experience of the group sector; |
- we focused on specific laws and regulations which we considered may have a direct material effect on the financial statements or the operations of the group, including the Companies Act 2006, taxation legislation and data protection, employment, and health and safety legislation; |
- we assessed the extent of compliance with the laws and regulations identified above through making enquiries of management and inspecting legal correspondence where necessary. |
We assessed the susceptibility of the group's financial statements to material misstatement, including obtaining an understanding of how fraud might occur, by: |
- making enquiries of management as to where they considered there was susceptibility to fraud, their knowledge of actual, suspected and alleged fraud; and |
- considering the internal controls in place to mitigate risks of fraud and non-compliance with laws and regulations. |
To address the risk of fraud through management bias and override of controls, we: |
- performed analytical procedures to identify any unusual or unexpected transactions; |
- agreed income to underlying contracts; |
- tested the appropriateness of journal entries; |
- investigated the rationale behind significant or unusual transactions. |
To address the risk that revenue could be misstated due to fraud, we: |
- obtained an understanding of the company's revenue recognition policies and compared these to the accounting standard; |
- performed a walkthrough to confirm our understanding of the processes and controls through which the business initiates, records, processes and reports revenue transactions; |
- tested a sample of revenue transactions to supporting evidence; and |
- tested, on a sample basis, revenue related balances in the balance sheet. |
In response to the risk of irregularities and non-compliance with laws and regulations, we design procedures which included, but were not limited to: |
- agreeing financial statement disclosures to underlying supporting documentation; |
- enquiring of management as to actual and potential litigation and claims; and |
- reviewing legal expenses for any potential issues. |
There are inherent limitations in our audit procedures described above. The more removed that laws and regulations are from financial transactions, the less likely it is that we would become aware of non-compliance. Auditing standards also limit the audit procedures required to identify non-compliance with laws and regulations to enquiry of the directors and other management and the inspection of regulatory and legal correspondence, if any. |
Material misstatements that arise due to fraud can be harder to detect than those that arise from error as they may involve deliberate concealment or collusion. |
A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council's website at www.frc.org.uk/auditorsresponsibilities. This description forms part of our Report of the Auditors. |
REPORT OF THE INDEPENDENT AUDITORS TO THE MEMBERS OF |
HBS ELECTRONICS (HOLDINGS) LIMITED |
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 a Report of the Auditors and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company's members as a body, for our audit work, for this report, or for the opinions we have formed. |
for and on behalf of |
Chartered Certified Accountants |
19-20 Bourne Court |
Southend Road |
Woodford Green |
Essex |
IG8 8HD |
HBS ELECTRONICS (HOLDINGS) LIMITED (REGISTERED NUMBER: 08780150) |
CONSOLIDATED |
INCOME STATEMENT |
for the year ended 31 October 2023 |
2023 | 2022 |
Notes | £ | £ |
TURNOVER | 4 | 18,778,389 | 21,626,887 |
Cost of sales | (10,511,911 | ) | (10,464,718 | ) |
GROSS PROFIT | 8,266,478 | 11,162,169 |
Administrative expenses | (6,539,657 | ) | (7,916,093 | ) |
1,726,821 | 3,246,076 |
Other operating income | 8,417 | 606,608 |
OPERATING PROFIT | 6 | 1,735,238 | 3,852,684 |
Loan write off | 7 | - | (2,730,000 | ) |
Profit on sale of investment | 7 | 13,134,836 | - |
14,870,074 | 1,122,684 |
Interest receivable and similar income | 55,699 | 288 |
14,925,773 | 1,122,972 |
Interest payable and similar expenses | 8 | (317,019 | ) | (511,971 | ) |
PROFIT BEFORE TAXATION | 14,608,754 | 611,001 |
Tax on profit | 9 | (438,182 | ) | (117,177 | ) |
PROFIT FOR THE FINANCIAL YEAR |
Profit attributable to: |
Owners of the parent | 14,170,572 | 493,824 |
HBS ELECTRONICS (HOLDINGS) LIMITED (REGISTERED NUMBER: 08780150) |
CONSOLIDATED |
OTHER COMPREHENSIVE INCOME |
for the year ended 31 October 2023 |
2023 | 2022 |
Notes | £ | £ |
PROFIT FOR THE YEAR | 14,170,572 | 493,824 |
OTHER COMPREHENSIVE INCOME |
EOT gift | (14,266,000 | ) | - |
Income tax relating to other comprehensive income |
- |
- |
OTHER COMPREHENSIVE INCOME FOR THE YEAR, NET OF INCOME TAX |
(14,266,000 |
) |
- |
TOTAL COMPREHENSIVE INCOME FOR THE YEAR |
(95,428 |
) |
493,824 |
Total comprehensive income attributable to: |
Owners of the parent | (95,428 | ) | 493,824 |
HBS ELECTRONICS (HOLDINGS) LIMITED (REGISTERED NUMBER: 08780150) |
CONSOLIDATED BALANCE SHEET |
31 October 2023 |
2023 | 2022 |
Notes | £ | £ | £ | £ |
FIXED ASSETS |
Intangible assets | 11 | 1,623,096 | 4,245,542 |
Tangible assets | 12 | 1,523,655 | 2,155,525 |
Investments | 13 | - | - |
3,146,751 | 6,401,067 |
CURRENT ASSETS |
Stocks | 14 | 7,668,980 | 7,289,703 |
Debtors | 15 | 6,144,067 | 12,522,545 |
Cash at bank and in hand | 2,646,258 | 6,024,063 |
16,459,305 | 25,836,311 |
CREDITORS |
Amounts falling due within one year | 16 | 7,936,470 | 8,175,307 |
NET CURRENT ASSETS | 8,522,835 | 17,661,004 |
TOTAL ASSETS LESS CURRENT LIABILITIES |
11,669,586 |
24,062,071 |
CREDITORS |
Amounts falling due after more than one year |
17 |
(218,289 |
) |
(12,456,816 |
) |
PROVISIONS FOR LIABILITIES | 21 | (422,291 | ) | (480,821 | ) |
NET ASSETS | 11,029,006 | 11,124,434 |
CAPITAL AND RESERVES |
Called up share capital | 22 | 200 | 200 |
Retained earnings | 23 | 11,028,806 | 11,124,234 |
SHAREHOLDERS' FUNDS | 11,029,006 | 11,124,434 |
The financial statements were approved by the Board of Directors and authorised for issue on 30 July 2024 and were signed on its behalf by: |
Mr G W Harvey - Director |
HBS ELECTRONICS (HOLDINGS) LIMITED (REGISTERED NUMBER: 08780150) |
COMPANY BALANCE SHEET |
31 October 2023 |
2023 | 2022 |
Notes | £ | £ | £ | £ |
FIXED ASSETS |
Intangible assets | 11 |
Tangible assets | 12 |
Investments | 13 |
CURRENT ASSETS |
Debtors | 15 |
Cash at bank |
CREDITORS |
Amounts falling due within one year | 16 |
NET CURRENT LIABILITIES | ( |
) | ( |
) |
TOTAL ASSETS LESS CURRENT LIABILITIES |
CREDITORS |
Amounts falling due after more than one year |
17 |
NET ASSETS |
CAPITAL AND RESERVES |
Called up share capital | 22 |
Retained earnings |
SHAREHOLDERS' FUNDS |
Company's profit/(loss) for the financial year | 20,888,537 | (1,627,104 | ) |
The financial statements were approved by the Board of Directors and authorised for issue on |
HBS ELECTRONICS (HOLDINGS) LIMITED (REGISTERED NUMBER: 08780150) |
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY |
for the year ended 31 October 2023 |
Called up |
share | Retained | Total |
capital | earnings | equity |
£ | £ | £ |
Balance at 1 November 2021 | 200 | 10,630,410 | 10,630,610 |
Changes in equity |
Total comprehensive income | - | 493,824 | 493,824 |
Balance at 31 October 2022 | 200 | 11,124,234 | 11,124,434 |
Changes in equity |
Total comprehensive income | - | (95,428 | ) | (95,428 | ) |
Balance at 31 October 2023 | 200 | 11,028,806 | 11,029,006 |
HBS ELECTRONICS (HOLDINGS) LIMITED (REGISTERED NUMBER: 08780150) |
COMPANY STATEMENT OF CHANGES IN EQUITY |
for the year ended 31 October 2023 |
Called up |
share | Retained | Total |
capital | earnings | equity |
£ | £ | £ |
Balance at 1 November 2021 |
Changes in equity |
Deficit for the year | - | (1,627,104 | ) | (1,627,104 | ) |
Total comprehensive income | - | ( |
) | ( |
) |
Balance at 31 October 2022 |
Changes in equity |
Profit for the year | - | 20,888,537 | 20,888,537 |
Capital contribution to EOT | - | (14,266,000 | ) | (14,266,000 | ) |
Total comprehensive income | - |
Balance at 31 October 2023 |
HBS ELECTRONICS (HOLDINGS) LIMITED (REGISTERED NUMBER: 08780150) |
CONSOLIDATED CASH FLOW STATEMENT |
for the year ended 31 October 2023 |
2023 | 2022 |
Notes | £ | £ |
Cash flows from operating activities |
Cash generated from operations | 1 | 6,282,442 | 3,703,754 |
Interest paid | (260,561 | ) | (448,845 | ) |
Interest element of hire purchase payments paid |
(56,458 |
) |
(63,126 |
) |
Tax paid | (297,968 | ) | - |
Taxation refund | - | 130,185 |
Net cash from operating activities | 5,667,455 | 3,321,968 |
Cash flows from investing activities |
Purchase of intangible fixed assets | (4,460,534 | ) | (629,450 | ) |
Purchase of tangible fixed assets | (57,021 | ) | (225,065 | ) |
Sale of tangible fixed assets | 136,873 | 19,091 |
Proceeds from sale of subsidiary | 19,500,000 | - |
Interest received | 55,699 | 288 |
Net cash from investing activities | 15,175,017 | (835,136 | ) |
Cash flows from financing activities |
Loan repayments | (12,000,000 | ) | - |
Capital repayments in year | (322,710 | ) | (490,701 | ) |
Amount introduced by directors | 2,368,433 | - |
Amount withdrawn by directors | - | (2,368,433 | ) |
Contribution to Employee Ownership Trust | (14,266,000 | ) | - |
Net cash from financing activities | (24,220,277 | ) | (2,859,134 | ) |
Decrease in cash and cash equivalents | (3,377,805 | ) | (372,302 | ) |
Cash and cash equivalents at beginning of year |
2 |
6,024,063 |
6,396,365 |
Cash and cash equivalents at end of year | 2 | 2,646,258 | 6,024,063 |
HBS ELECTRONICS (HOLDINGS) LIMITED (REGISTERED NUMBER: 08780150) |
NOTES TO THE CONSOLIDATED CASH FLOW STATEMENT |
for the year ended 31 October 2023 |
1. | RECONCILIATION OF PROFIT BEFORE TAXATION TO CASH GENERATED FROM OPERATIONS |
2023 | 2022 |
£ | £ |
Profit before taxation | 14,608,754 | 611,001 |
Depreciation charges | 987,368 | 1,888,689 |
Loss on disposal of fixed assets | 15 | 13,063 |
Profit on sale of subsidiary | (13,134,836 | ) | - |
Finance costs | 317,019 | 511,971 |
Finance income | (55,699 | ) | (288 | ) |
2,722,621 | 3,024,436 |
Increase in stocks | (379,277 | ) | (839,016 | ) |
Decrease in trade and other debtors | 4,139,320 | 1,891,695 |
Decrease in trade and other creditors | (200,222 | ) | (373,361 | ) |
Cash generated from operations | 6,282,442 | 3,703,754 |
2. | CASH AND CASH EQUIVALENTS |
The amounts disclosed on the Cash Flow Statement in respect of cash and cash equivalents are in respect of these Balance Sheet amounts: |
Year ended 31 October 2023 |
31.10.23 | 1.11.22 |
£ | £ |
Cash and cash equivalents | 2,646,258 | 6,024,063 |
Year ended 31 October 2022 |
31.10.22 | 1.11.21 |
£ | £ |
Cash and cash equivalents | 6,024,063 | 6,396,365 |
3. | ANALYSIS OF CHANGES IN NET (DEBT)/FUNDS |
At 1.11.22 | Cash flow | At 31.10.23 |
£ | £ | £ |
Net cash |
Cash at bank and in hand | 6,024,063 | (3,377,805 | ) | 2,646,258 |
6,024,063 | (3,377,805 | ) | 2,646,258 |
Debt |
Finance leases | (797,247 | ) | 322,710 | (474,537 | ) |
Debts falling due after 1 year | (12,000,000 | ) | 12,000,000 | - |
(12,797,247 | ) | 12,322,710 | (474,537 | ) |
Total | (6,773,184 | ) | 8,944,905 | 2,171,721 |
HBS ELECTRONICS (HOLDINGS) LIMITED (REGISTERED NUMBER: 08780150) |
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS |
for the year ended 31 October 2023 |
1. | STATUTORY INFORMATION |
HBS Electronics (Holdings) Limited is a |
The presentation currency of the financial statements is the Pound Sterling (£). |
2. | ACCOUNTING POLICIES |
Basis of preparing the financial statements |
Basis of consolidation |
The consolidated financial statements include the financial statements of the company and its subsidiary undertakings made up to 31 October 2023. A subsidiary is an entity that is controlled by the parent. The results of subsidiary undertakings are included in the consolidated profit and loss account from the date that control commences until the date that control ceases. Control is established when the company has the power to govern the operating and financial policies of an entity so as to obtain benefits from its activities. In assessing control, the group takes into consideration potential voting rights that are currently exercisable. |
Under Section 408 of the Companies Act 2006 the company is exempt from the requirement to present its own profit and loss account. |
In the parent financial statements, investments in subsidiaries are carried at cost less impairment. |
Turnover |
Turnover represents the invoiced value of goods and services supplied to external customers, excluding value added tax. Turnover is recognised and a debtor recorded as accrued income once all obligations under the sales order have been performed. |
Goodwill |
Purchased goodwill is the excess of the fair value of the purchase consideration over the fair value of the net assets acquired on acquisition of subsidiary undertakings and is capitalised and amortised over its useful economic life, subject to a maximum period of 10 years. Where impairment of an investment occurs, the amount is written off in the year concerned. |
Intangible assets |
Intangible assets are initially measured at cost. After initial recognition, intangible assets are measured at cost less any accumulated amortisation and any accumulated impairment losses. |
Patents and licences are being amortised evenly over their estimated useful life of seven years. |
Tangible fixed assets |
Short leasehold | - |
Plant and machinery | - |
Fixtures and fittings | - |
Motor vehicles | - |
Computer equipment | - |
Depreciation methods, useful lives and residual values are reviewed if there is an indication of a significant change since last annual reporting date in the pattern by which the group expects to consume an asset's future economic benefits. |
HBS ELECTRONICS (HOLDINGS) LIMITED (REGISTERED NUMBER: 08780150) |
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - continued |
for the year ended 31 October 2023 |
2. | ACCOUNTING POLICIES - continued |
Stocks |
Stocks are stated at the lower of cost and estimated selling price less costs to complete and sell (net realisable value). Costs, which comprise direct production costs, are based on the method most appropriate to the type of inventory class. Overheads are charged to profit or loss as incurred. Net realisable value is based on the estimated selling price less any estimated completion or selling costs. |
When stocks are sold, the carrying amount of those stocks is recognised as an expense in the period in which the related revenue is recognised. The amount of any write-down of stocks to net realisable value and all losses of stocks are recognised as an expense in the period in which the write-down or loss occurs. The amount of any reversal of any write-down of stocks is recognised as a reduction in the amount of stocks recognised as an expense in the period in which the reversal occurs. |
Financial instruments |
Basic financial assets, including trade and other receivables and cash and bank balances are initially recognised at transaction price, 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. |
Such assets are subsequently carried at amortised cost using the effective interest method. |
Basic financial liabilities, including trade and other payables, bank loans, loans from fellow group companies, are initially recognised at transaction price. |
Debt instruments are recognised at initial transaction price. |
Taxation |
Taxation for the year comprises current and deferred tax. Tax is recognised in the Consolidated Income Statement, except to the extent that it relates to items recognised in other comprehensive income or directly in equity. |
Current or deferred taxation assets and liabilities are not discounted. |
Current tax is recognised at the amount of tax payable using the tax rates and laws that have been enacted or substantively enacted by the balance sheet date. |
Taxation |
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 substantively 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. |
HBS ELECTRONICS (HOLDINGS) LIMITED (REGISTERED NUMBER: 08780150) |
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - continued |
for the year ended 31 October 2023 |
2. | ACCOUNTING POLICIES - continued |
Research and development |
Expenditure on research and development activities is recognised in the profit and loss account as an expense as incurred. |
Expenditure on development activities may be capitalised if the product or process is technically and commercially feasible and the group intends and has the technical ability and sufficient resources to complete development, future economic benefits are probable and if the group can measure reliably the expenditure attributable to the intangible asset during its development. Development activities involve design for, construction or testing of the production of new or substantially improved products or processes. The expenditure capitalised includes the cost of materials, direct labour and an appropriate proportion of overheads and capitalised borrowing costs. Other development expenditure is recognised in the profit and loss account as an expense as incurred. Capitalised development expenditure is stated at cost less accumulated amortisation and less accumulated impairment losses. |
Foreign currencies |
The financial statements are presented in sterling, which is also the functional currency of the group. Transactions in currencies other than the functional currency of the group are recorded at the rate of exchange on the date the transaction occurred. Monetary items denominated in other currencies are translated at the rate prevailing at the end of the reporting period. All differences are taken to profit and loss. Non-monetary items that are measured at historic cost in a foreign currency are not retranslated. |
Hire purchase and leasing commitments |
Assets that are held by the group under leases which transfer to the group substantially all the risks and rewards of ownership are classified as being held under finance leases. Leases which do not transfer substantially all the risks and rewards of ownership to the group are classified as operating leases. |
Assets held under finance leases are initially recognised as assets of the group at their fair value at the inception of the lease or, if lower, at the present value of the minimum lease payments. The corresponding liability to the lessor is included in the statement of financial position as a finance lease obligation. Lease payments are apportioned between finance expenses and reduction of the lease obligation so as to achieve a constant rate of interest on the remaining balance of the liability. Finance expenses are recognised immediately in profit or loss, unless they are directly attributable to qualifying assets, in which case they are capitalised in accordance with the group's policy on borrowing costs (see the accounting policy above). Contingent rentals are recognised as expenses in the periods in which they are incurred. |
Operating lease payments are recognised as an expense on a straight-line basis over the lease term, except where another systematic basis is more representative of the time pattern in which economic benefits from the leased asset are consumed. Contingent rentals arising under operating leases are recognised as an expense in the period in which they are incurred. |
In the event that lease incentives are received to enter into operating leases, such incentives are recognised as a liability. The aggregate benefit of incentives is recognised as a reduction of rental expense on a straight line basis over the lease term, except where another systematic basis is more representative of the time pattern in which economic benefits from the leased asset are consumed. |
Pension costs and other post-retirement benefits |
The group operates a small self administered pension scheme for the directors. No contributions were paid during the year. The group also operates a fully insured defined contribution pension scheme for certain members of staff and the pension charge represents the amounts paid by the group to the fund during the year. These contributions are invested separately from the group's assets. |
Fixed asset investments |
Fixed asset investments are shown at acquisition cost subject to any provisions for permanent diminution in value. |
HBS ELECTRONICS (HOLDINGS) LIMITED (REGISTERED NUMBER: 08780150) |
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - continued |
for the year ended 31 October 2023 |
2. | ACCOUNTING POLICIES - continued |
Related parties |
For the purposes of these financial statements, a party is considered to be related to the company if: |
- the party has the ability, directly or indirectly, through one or more intermediaries, to control the Company or exercise significant influence over the company in making financial and operating policy decisions, or has joint control over the company; or |
- the company and the party are subject to common control; or |
- the party is an associate of the company or a joint venture in which the company is a venturer; or |
- the party is a member of key management personnel of the company or the company's parent, or a close family member of such an individual, or is an entity under the control, joint control or significant influence of such individuals; or |
- the party is a close family member of a party referred to in (i) or is an entity under the control, joint control or significant influence of such individuals; or |
- the party is a post-employment benefit plan which is for the benefit of employees of the company or of any entity that is a related party of the company; or |
- the party, or any member of a group of which it is part, provides key management personnel services to the company or its parent. |
3. | CRITICAL ACCOUNTING JUDGEMENTS AND KEY SOURCES OF ESTIMATION UNCERTAINTY |
In the application of the group's accounting policies, which are described above, management is required to make judgements, estimates and assumptions about the carrying values of assets and liabilities that are not readily apparent from other sources. The estimates and underlying 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 if the revision affects only that period, or in the period of the revision and future periods if the revision affects both current and future periods. |
The items in the financial statements where these judgements and estimates have been made include: |
- assessing the useful economic lives attributed to tangible fixed assets used to determine the annual depreciation charge, |
- the provision required for any bad or doubtful debts and |
- any provision for slow moving or obsolete stock. |
4. | TURNOVER |
The turnover and profit before taxation are attributable to the one principal activity of the group. |
An analysis of turnover by geographical market is given below: |
2023 | 2022 |
£ | £ |
United Kingdom | 17,839,843 | 20,880,134 |
Europe | 547,039 | 431,246 |
Rest of the World | 391,507 | 315,507 |
18,778,389 | 21,626,887 |
5. | EMPLOYEES AND DIRECTORS |
The average number of employees by undertakings that are proportionately consolidated during the year was 179 (2022:174). |
HBS ELECTRONICS (HOLDINGS) LIMITED (REGISTERED NUMBER: 08780150) |
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - continued |
for the year ended 31 October 2023 |
6. | OPERATING PROFIT |
The operating profit is stated after charging/(crediting): |
2023 | 2022 |
£ | £ |
Other operating leases | 683,528 | 724,707 |
Depreciation - owned assets | 332,119 | 442,956 |
Depreciation - assets on hire purchase contracts | 219,884 | 214,771 |
Loss on disposal of fixed assets | 15 | 13,063 |
Goodwill amortisation | 362,289 | 1,108,855 |
Patents and licences amortisation | 62,504 | 72,031 |
Development costs amortisation | 10,572 | 21,942 |
Auditors' remuneration | 85,698 | 92,419 |
Foreign exchange differences | 124,885 | (406,457 | ) |
7. | EXCEPTIONAL ITEMS |
2023 | 2022 |
£ | £ |
Exceptional items | (130,136 | ) | - |
Loan write off | - | (2,730,000 | ) |
Profit on sale of investment | 13,134,836 | - |
13,004,700 | (2,730,000 | ) |
The profit on sale of investment of £13,134,836 relates to the disposal of Didsbury Engineering Ltd, a subsidiary company, during the year. |
The exceptional item of £130,136 for the year relates to a payment towards a piece of machinery that Clement Clarke Communications Ltd, a subsidiary company, no longer expects to receive. The amount has also been deemed as irrecoverable and therefore written off. |
Last year's exceptional item represented the loan write off of £2,730,000 for MACL Holdings Ltd. |
8. | INTEREST PAYABLE AND SIMILAR EXPENSES |
2023 | 2022 |
£ | £ |
Bank loan interest | 260,561 | 448,845 |
Hire purchase | 56,458 | 63,126 |
317,019 | 511,971 |
HBS ELECTRONICS (HOLDINGS) LIMITED (REGISTERED NUMBER: 08780150) |
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - continued |
for the year ended 31 October 2023 |
9. | TAXATION |
Analysis of the tax charge |
The tax charge on the profit for the year was as follows: |
2023 | 2022 |
£ | £ |
Current tax: |
UK corporation tax | 317,745 | 226,842 |
Deferred tax: |
Deferred tax | (25,185 | ) | (109,665 | ) |
Deferred tax release - prior |
year loss | 145,622 | - |
Total deferred tax | 120,437 | (109,665 | ) |
Tax on profit | 438,182 | 117,177 |
Reconciliation of total tax charge included in profit and loss |
The tax assessed for the year is lower than the standard rate of corporation tax in the UK. The difference is explained below: |
2023 | 2022 |
£ | £ |
Profit before tax | 14,608,754 | 611,001 |
Profit multiplied by the standard rate of corporation tax in the UK of 22.571 % (2022 - 19 %) |
3,297,342 |
116,090 |
Effects of: |
Expenses not deductible for tax purposes | 7,553 | 27 |
Depreciation in excess of capital allowances | 181,862 | 265,942 |
Deferred tax | 120,437 | (109,665 | ) |
R&D relief | (88,843 | ) | (236,982 | ) |
Loss/(Profit) on disposal of assets | (2,964,660 | ) | 2,482 |
Tax refunds | - | (33,804 | ) |
Losses utilisation | (154,640 | ) | 171,344 |
Other adjustments | 39,131 | (58,257 | ) |
Total tax charge | 438,182 | 117,177 |
Tax effects relating to effects of other comprehensive income |
2023 |
Gross | Tax | Net |
£ | £ | £ |
EOT gift | (14,266,000 | ) | - | (14,266,000 | ) |
On 31 May 2023, the shareholders sold 80% of their shares to an Employee Ownership Trust. |
10. | INDIVIDUAL INCOME STATEMENT |
As permitted by Section 408 of the Companies Act 2006, the Income Statement of the parent company is not presented as part of these financial statements. |
HBS ELECTRONICS (HOLDINGS) LIMITED (REGISTERED NUMBER: 08780150) |
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - continued |
for the year ended 31 October 2023 |
11. | INTANGIBLE FIXED ASSETS |
Group |
Patents |
and | Development |
Goodwill | licences | costs | Totals |
£ | £ | £ | £ |
COST |
At 1 November 2022 | 11,772,053 | 1,230,232 | 420,748 | 13,423,033 |
Additions | - | 235,514 | 150,967 | 386,481 |
Eliminated on disposal | (7,868,761 | ) | - | (370,437 | ) | (8,239,198 | ) |
At 31 October 2023 | 3,903,292 | 1,465,746 | 201,278 | 5,570,316 |
AMORTISATION |
At 1 November 2022 | 8,291,119 | 808,958 | 77,414 | 9,177,491 |
Amortisation for year | 362,289 | 62,504 | 10,572 | 435,365 |
Eliminated on disposal | (5,577,650 | ) | - | (87,986 | ) | (5,665,636 | ) |
At 31 October 2023 | 3,075,758 | 871,462 | - | 3,947,220 |
NET BOOK VALUE |
At 31 October 2023 | 827,534 | 594,284 | 201,278 | 1,623,096 |
At 31 October 2022 | 3,480,934 | 421,274 | 343,334 | 4,245,542 |
Company |
Goodwill |
£ |
COST |
Additions |
Reclassification/transfer | ( |
) |
At 31 October 2023 |
NET BOOK VALUE |
At 31 October 2023 |
HBS ELECTRONICS (HOLDINGS) LIMITED (REGISTERED NUMBER: 08780150) |
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - continued |
for the year ended 31 October 2023 |
12. | TANGIBLE FIXED ASSETS |
Group |
Short | Long | Plant and |
leasehold | leasehold | machinery |
£ | £ | £ |
COST |
At 1 November 2022 | 437,297 | 1,051 | 9,599,624 |
Additions | 45,600 | - | 903 |
Disposals | (113,509 | ) | - | (405,136 | ) |
At 31 October 2023 | 369,388 | 1,051 | 9,195,391 |
DEPRECIATION |
At 1 November 2022 | 174,805 | 1,051 | 7,723,357 |
Charge for year | 38,046 | - | 506,060 |
Eliminated on disposal | (56,808 | ) | - | (333,318 | ) |
At 31 October 2023 | 156,043 | 1,051 | 7,896,099 |
NET BOOK VALUE |
At 31 October 2023 | 213,345 | - | 1,299,292 |
At 31 October 2022 | 262,492 | - | 1,876,267 |
Fixtures |
and | Motor | Computer |
fittings | vehicles | equipment | Totals |
£ | £ | £ | £ |
COST |
At 1 November 2022 | 96,160 | 47,255 | 275,081 | 10,456,468 |
Additions | 3,300 | 7,218 | - | 57,021 |
Disposals | - | (14,500 | ) | (138,527 | ) | (671,672 | ) |
At 31 October 2023 | 99,460 | 39,973 | 136,554 | 9,841,817 |
DEPRECIATION |
At 1 November 2022 | 93,491 | 46,896 | 261,343 | 8,300,943 |
Charge for year | 665 | 2,859 | 4,373 | 552,003 |
Eliminated on disposal | - | (14,193 | ) | (130,465 | ) | (534,784 | ) |
At 31 October 2023 | 94,156 | 35,562 | 135,251 | 8,318,162 |
NET BOOK VALUE |
At 31 October 2023 | 5,304 | 4,411 | 1,303 | 1,523,655 |
At 31 October 2022 | 2,669 | 359 | 13,738 | 2,155,525 |
HBS ELECTRONICS (HOLDINGS) LIMITED (REGISTERED NUMBER: 08780150) |
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - continued |
for the year ended 31 October 2023 |
12. | TANGIBLE FIXED ASSETS - continued |
Group |
Fixed assets, included in the above, which are held under hire purchase contracts are as follows: |
Plant and |
machinery |
£ |
COST |
At 1 November 2022 |
and 31 October 2023 | 2,393,206 |
DEPRECIATION |
At 1 November 2022 | 1,673,329 |
Charge for year | 219,884 |
At 31 October 2023 | 1,893,213 |
NET BOOK VALUE |
At 31 October 2023 | 499,993 |
At 31 October 2022 | 719,877 |
13. | FIXED ASSET INVESTMENTS |
Company |
Shares in |
group |
undertakings |
£ |
COST |
At 1 November 2022 |
Disposals | ( |
) |
At 31 October 2023 |
NET BOOK VALUE |
At 31 October 2023 |
At 31 October 2022 |
The group or the company's investments at the Balance Sheet date in the share capital of companies include the following: |
Subsidiaries |
Registered office: Laurence Walter House, Addison Road, Sudbury, Suffolk, CO10 2YW |
Nature of business: |
% |
Class of shares: | holding |
2023 | 2022 |
£ | £ |
Aggregate capital and reserves |
(Loss)/profit for the year | ( |
) |
HBS ELECTRONICS (HOLDINGS) LIMITED (REGISTERED NUMBER: 08780150) |
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - continued |
for the year ended 31 October 2023 |
13. | FIXED ASSET INVESTMENTS - continued |
Registered office: Laurence Walter House, Addison Road, Sudbury, Suffolk, CO10 2YW |
Nature of business: |
% |
Class of shares: | holding |
2023 | 2022 |
£ | £ |
Aggregate capital and reserves |
Profit for the year |
Registered office: Laurence Walter House, Addison Road, Sudbury, Suffolk, CO10 2YW |
Nature of business: |
% |
Class of shares: | holding |
2023 | 2022 |
£ | £ |
Aggregate capital and reserves |
Profit for the year |
Registered office: Laurence Walter House, Addison Road, Sudbury, Suffolk, CO10 2YW |
Nature of business: |
% |
Class of shares: | holding |
2023 | 2022 |
£ | £ |
Aggregate capital and reserves |
Profit for the year |
Registered office: Laurence Walter House, Addison Road, Sudbury, Suffolk, CO10 2YW |
Nature of business: |
% |
Class of shares: | holding |
2023 | 2022 |
£ | £ |
Aggregate capital and reserves |
Profit/(loss) for the year | ( |
) |
HBS ELECTRONICS (HOLDINGS) LIMITED (REGISTERED NUMBER: 08780150) |
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - continued |
for the year ended 31 October 2023 |
13. | FIXED ASSET INVESTMENTS - continued |
Registered office: Laurence Walter House, Addison Road, Sudbury, Suffolk, CO10 2YW |
Nature of business: |
% |
Class of shares: | holding |
2023 | 2022 |
£ | £ |
Aggregate capital and reserves |
(Loss)/profit for the year | ( |
) |
Registered office: Laurence Walter House, Addison Road, Sudbury, Suffolk, CO10 2YW |
Nature of business: |
% |
Class of shares: | holding |
2023 | 2022 |
£ | £ |
Aggregate capital and reserves |
Profit for the year |
Registered office: Laurence Walter House, Addison Road, Sudbury, Suffolk, CO10 2YW |
Nature of business: |
% |
Class of shares: | holding |
2023 | 2022 |
£ | £ |
Aggregate capital and reserves |
Profit for the year |
Registered office: Laurence Walter House, Addison Road, Sudbury, Suffolk, CO10 2YW |
Nature of business: |
% |
Class of shares: | holding |
2023 | 2022 |
£ | £ |
Aggregate capital and reserves |
Profit for the year |
HBS ELECTRONICS (HOLDINGS) LIMITED (REGISTERED NUMBER: 08780150) |
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - continued |
for the year ended 31 October 2023 |
13. | FIXED ASSET INVESTMENTS - continued |
Registered office: Laurence Walter House, Addison Road, Sudbury, Suffolk, CO10 2YW |
Nature of business: |
% |
Class of shares: | holding |
2023 | 2022 |
£ | £ |
Aggregate capital and reserves |
Profit for the year |
14. | STOCKS |
Group |
2023 | 2022 |
£ | £ |
Stock of finished goods | 7,032,938 | 6,698,465 |
Work-in-progress | 636,042 | 591,238 |
7,668,980 | 7,289,703 |
15. | DEBTORS: AMOUNTS FALLING DUE WITHIN ONE YEAR |
Group | Company |
2023 | 2022 | 2023 | 2022 |
£ | £ | £ | £ |
Trade debtors | 4,164,814 | 6,953,366 |
Amounts owed by group undertakings | - | - |
Other debtors | 1,618,858 | 2,611,101 |
Directors' loan accounts | - | 2,368,433 | - | 2,368,433 |
Tax | 39,626 | 13,835 |
Prepayments | 320,769 | 575,810 |
6,144,067 | 12,522,545 |
16. | CREDITORS: AMOUNTS FALLING DUE WITHIN ONE YEAR |
Group | Company |
2023 | 2022 | 2023 | 2022 |
£ | £ | £ | £ |
Bank loans and overdrafts (see note 18) | - | - |
Hire purchase contracts (see note 19) | 256,248 | 340,431 |
Trade creditors | 1,863,162 | 2,179,532 |
Amounts owed to group undertakings | - | - |
Tax | 318,072 | 272,504 |
Social security and other taxes | 129,187 | 116,579 |
VAT | 658,850 | 386,570 | 64,500 | 70,395 |
Other creditors | 1,732,570 | 1,812,247 |
Other loans repayable | 2,099,790 | 2,266,899 | 2,099,790 | 2,266,899 |
Accruals and deferred income | 878,591 | 800,545 |
7,936,470 | 8,175,307 |
HBS ELECTRONICS (HOLDINGS) LIMITED (REGISTERED NUMBER: 08780150) |
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - continued |
for the year ended 31 October 2023 |
17. | CREDITORS: AMOUNTS FALLING DUE AFTER MORE THAN ONE YEAR |
Group | Company |
2023 | 2022 | 2023 | 2022 |
£ | £ | £ | £ |
Bank loans (see note 18) | - | 12,000,000 |
Hire purchase contracts (see note 19) | 218,289 | 456,816 |
218,289 | 12,456,816 |
18. | LOANS |
An analysis of the maturity of loans is given below: |
Group | Company |
2023 | 2022 | 2023 | 2022 |
£ | £ | £ | £ |
Amounts falling due within one year or on | demand: |
Bank overdrafts | - | - |
Amounts falling due between two and five | years: |
Bank loans | - | 12,000,000 |
19. | LEASING AGREEMENTS |
Minimum lease payments fall due as follows: |
Group |
Hire purchase contracts |
2023 | 2022 |
£ | £ |
Net obligations repayable: |
Within one year | 256,248 | 340,431 |
Between one and five years | 218,289 | 456,816 |
474,537 | 797,247 |
Group |
Non-cancellable operating | leases |
2023 | 2022 |
£ | £ |
Within one year | 514,000 | 579,000 |
Between one and five years | 1,322,000 | 1,860,000 |
1,836,000 | 2,439,000 |
HBS ELECTRONICS (HOLDINGS) LIMITED (REGISTERED NUMBER: 08780150) |
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - continued |
for the year ended 31 October 2023 |
20. | SECURED DEBTS |
The following secured debts are included within creditors: |
Group | Company |
2023 | 2022 | 2023 | 2022 |
£ | £ | £ | £ |
Bank overdrafts | - | - |
Bank loans | - | 12,000,000 |
Hire purchase contracts | 474,537 | 797,247 | - | - |
474,537 | 12,797,247 |
Clydesdale Bank had fixed and floating charges over the assets of the group. The facility was repaid in full in March 2023 following the sale of a subsidiary and the security was removed. |
The hire purchase and the finance lease liabilities are secured on the related assets. |
21. | PROVISIONS FOR LIABILITIES |
Group |
2023 | 2022 |
£ | £ |
Deferred tax | 422,291 | 480,821 |
Group |
Deferred |
tax |
£ |
Balance at 1 November 2022 | 480,821 |
Accelerated capital allowances | (25,185 | ) |
Deferred tax on disposal | (33,345 | ) |
Balance at 31 October 2023 | 422,291 |
22. | CALLED UP SHARE CAPITAL |
Allotted, issued and fully paid: |
Number: | Class: | Nominal | 2023 | 2022 |
value: | £ | £ |
Ordinary | 1 | 200 | 200 |
HBS ELECTRONICS (HOLDINGS) LIMITED (REGISTERED NUMBER: 08780150) |
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - continued |
for the year ended 31 October 2023 |
23. | RESERVES |
Group |
Retained |
earnings |
£ |
At 1 November 2022 | 11,124,234 |
Profit for the year | 14,170,572 |
Contribution to Employee Ownership Trust |
(14,266,000 |
) |
At 31 October 2023 | 11,028,806 |
24. | RELATED PARTY DISCLOSURES |
The parent company has taken advantage of exemption, under the terms of Financial Reporting Standard 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland', not to disclose related party transactions with wholly owned subsidiaries within the group. |
Transactions between group entities which have been eliminated on consolidation are not disclosed within the financial statements. |
During the year the parent and its subsidiary companies supplied services to related parties under common control totalling £1,360,958 (2022: £1,077,646). The total balance due at the year end amounted to £271,585 (2022: £1,809,156). |
During the year the parent and its subsidiary companies received services from related parties under common control totalling £1,685,416 (2022: £2,417,288). The total balance due at the year end amounted to £75,324 (2022: £681,217). |
At the year end, total loans due by the parent company and its subsidiaries to related parties under common control amounted to £3,080,484 (2022: £3,201,492). |
At the year end, total loans due to the parent company and its subsidiaries from related parties under common control amounted to £678,806 (2022: £1,589,380). |
Three of the subsidiaries occupy premises owned by the directors pension scheme. A commercial rent is paid to the pension scheme in this respect. The rents are set by independent market values in accordance with the leases of the properties and scheme rules. The amount of rent paid to the scheme during the year amounted to £259,522 (2022: £259,522). |
25. | AUDITOR LIABILITY LIMITATION AGREEMENT |
The group has entered into a liability limitation agreement with Raffingers, the statutory auditor, in respect of the statutory audit for the year ended 31 October 2023. The proportionate liability agreement follows the standard terms in Appendix B to the Financial Reporting Council's June 2008 Guidance on Auditor Liability Agreements, and was approved by the members on 13 November 2023. |
26. | ULTIMATE CONTROLLING PARTY |
On 31 May 2023, the HBS Group Trustees Ltd (an Employee Ownership Trust) acquired 80% of the share capital of the group's parent company. The Trustees of the Employee Ownership Trust are Mr D J Horbury, Mr K J Vincent and Mr G W Harvey. |