Company registration number 02125263 (England and Wales)
INDESPENSION LTD
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 OCTOBER 2023
INDESPENSION LTD
COMPANY INFORMATION
Directors
Dr D Graham
Miss R M Graham
Mr P Bonar
Mr S Sadler
Mr C Blundell
Mr D Grimshaw
Secretary
Miss R M Graham
Company number
02125263
Registered office
Paragon Business Park
Chorley New Road
Horwich
Bolton
BL6 6HG
Auditor
MHA
Richard House
9 Winckley Square
Preston
PR1 3HP
INDESPENSION LTD
CONTENTS
Page
Strategic report
1 - 2
Directors' report
3 - 4
Directors' responsibilities statement
5
Independent auditor's report
6 - 8
Statement of comprehensive income
9
Balance sheet
10
Statement of changes in equity
11
Notes to the financial statements
12 - 28
INDESPENSION LTD
STRATEGIC REPORT
FOR THE YEAR ENDED 31 OCTOBER 2023
- 1 -

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

Review of the business

The principal activity of Indespension Ltd is that of manufacture, distribution and retail of high quality trailers and trailer parts. Through retail branches it offers a full package of sales, servicing and hire of trailers, supply and fitting of towbars to towing vehicles and sales of a wide range of related products.

 

Turnover in the 12 months to October 2023 fell 8% year on year finishing at £18.8m compared to £20.5m in 2022. Increases in interest rates and the cost of living crisis during the year suppressed the retail side of the business in particular, but also impacted our B2B customer base with demand for large trailer orders being lower than in previous years. Lower new trailer sales were partially offset by strong performance around all our workshops where tow bar fittings and servicing were up year on year – this resulted in our overall gross margin % improving by around 2% versus prior year.

 

An EBITDA profit for the year of £500k was generated compared to £705k the year before. Despite the challenging year we are pleased with this underlying level of core profitability and remain cautiously optimistic as we move in to 2024.

 

The company actively encourages and continues to invest in new technology and innovative designs. We are confident in the quality and uniqueness of our product designs and take the appropriate steps to protect our intellectual property should circumstances arise where it has been misappropriated. The back end of the year saw the launch of our new Tilting Flatbed range of trailers which have been well received in the market.

 

The company continues to benefit from the strong and stable support of its Parent Company.

 

Moving into 2024 the order book isn’t as strong as previous years and there is a general reluctance in the market to commit to large purchases. However there remains a number of opportunities in the offing but costs are being kept to minimum until these materialise. Lower than normal trailer sales means that our workshops are busy given more people are repairing or refurbishing trailers as opposed to replacing them, which is one positive effect of the wider poor economic conditions.

Principal risks and uncertainties

Key risks include:

 

Key performance indicators

Key performance indicators remain net current assets, shareholders' funds and distributable profits. The directors consider the company to be in a strong financial position given the net current assets of £2.2m (£2.3m previous year) and shareholders' funds of £4.0m (£3.8m previous year) at 31 October 2023.

Future developments

Future investment will be aimed at continuing our production capacity improvements, investment in systems and in growing our more profitable sectors and products.

INDESPENSION LTD
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 OCTOBER 2023
- 2 -

On behalf of the board

Mr C Blundell
Director
31 July 2024
INDESPENSION LTD
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 OCTOBER 2023
- 3 -

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

Principal activities

The principal activity of the company is that of the manufacture, distribution and retail of high quality trailers and trailer parts.

Results and dividends

The results for the year are set out on page 9.

No ordinary dividends were paid. 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:

Dr D Graham
Miss R M Graham
Mr P Bonar
Mr L Mangnall
(Resigned 31 December 2023)
Mr S Sadler
Mr C Blundell
Mr D Grimshaw
Financial instruments
Financial risk management objectives and policies

The company finances its operations through a mixture of retained profits and where necessary to fund expansion or capital expenditure programmes through bank borrowings.

 

The management’s objectives are to:

 

 

 

 

The company’s funds are invested in bank accounts and borrowings are all obtained from standard bank loan accounts. As such, there is little price risk exposure.

 

The company’s funds are held primarily in short term variable rate accounts. The directors believe that this gives them the flexibility to release cash resources at short notice and also allows them to take advantage of changing conditions in the finance markets as they arise.

 

The company's borrowings are in fixed or variable interest loans.

INDESPENSION LTD
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 OCTOBER 2023
- 4 -
Research and development

Development costs are capitalised within intangible assets where they can be identified with a specific product or project anticipated to produce future benefits, and are amortised on a straight line basis over the anticipated life of the benefits arising from the completed product or project.

 

Deferred research and development costs are reviewed annually, and where future benefits are deemed to have ceased or be in doubt, the balance of any related research and development is written off to the profit and loss account.

Auditor

Following the merger of MHA Moore and Smalley with MHA, the company's independent auditor has now become MHA. The auditor, MHA, is deemed to be reappointed under section 487(2) of the Companies Act 2006.

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.

Environmental issues

The company has continued to follow policies and procedures that take account of the need to preserve and protect the environment.

Strategic report

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

On behalf of the board
Mr C Blundell
Director
31 July 2024
INDESPENSION LTD
DIRECTORS' RESPONSIBILITIES STATEMENT
FOR THE YEAR ENDED 31 OCTOBER 2023
- 5 -

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.

INDESPENSION LTD
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF INDESPENSION LTD
- 6 -
Opinion

We have audited the financial statements of Indespension Ltd (the 'company') for the year ended 31 October 2023 which comprise the statement of comprehensive income, the balance sheet, the statement of changes in equity and notes to the financial statements, including significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice).

In our opinion the financial statements:

Basis for opinion

We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditor's responsibilities for the audit of the financial statements section of our report. We are independent of the company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC’s Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Conclusions relating to going concern

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

 

Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the company's ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.

 

Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.

Other information

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

 

We have nothing to report in this regard.

INDESPENSION LTD
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF INDESPENSION LTD (CONTINUED)
- 7 -

Opinions on other matters prescribed by the Companies Act 2006

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

 

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.

Matters on which we are required to report by exception

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.

Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The specific procedures for this engagement and the extent to which these are capable of detecting irregularities, including fraud, is detailed below:

INDESPENSION LTD
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF INDESPENSION LTD (CONTINUED)
- 8 -

Because of the inherent limitations of an audit, there is a risk that we will not detect all irregularities, including those leading to a material misstatement in the financial statements or non-compliance with regulation. This risk increases the more that compliance with a law or regulation is removed from the events and transactions reflected in the financial statements, as we will be less likely to become aware of instances of non-compliance. The risk is also greater regarding irregularities occurring due to fraud rather than error, as fraud involves intentional concealment, forgery, collusion, omission or misrepresentation.

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.

Use of our report

This report is made solely to the company's members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the company's members those matters we are required to state to them in an auditor's report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company's members as a body, for our audit work, for this report, or for the opinions we have formed.

Andrew Matthews BFP ACA FCCA
Senior Statutory Auditor
For and on behalf of MHA, Statutory Auditor
Preston, United Kingdom
31 July 2024
MHA is the trading name of MacIntyre Hudson LLP, a limited liability partnership in England and Wales (registered number OC312313)
INDESPENSION LTD
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 OCTOBER 2023
- 9 -
2023
2022
Notes
£'000
£'000
Turnover
3
18,803
20,509
Cost of sales
(9,874)
(11,114)
Gross profit
8,929
9,395
Administrative expenses
(8,429)
(8,690)
EBITDA
500
705
Depreciation
(362)
(333)
Operating profit
4
138
372
Interest payable and similar expenses
7
(197)
(141)
(Loss)/profit before taxation
(59)
231
Tax on (loss)/profit
8
54
4
(Loss)/profit for the financial year
(5)
235
Other comprehensive income
Actuarial gain on defined benefit pension schemes
242
19
Tax relating to other comprehensive income
(54)
(4)
Total comprehensive income for the year
183
250
Transfers from revaluation reserve
57
84
Movement in profit and loss reserves
240
334

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

INDESPENSION LTD
BALANCE SHEET
AS AT
31 OCTOBER 2023
31 October 2023
- 10 -
2023
2022
Notes
£'000
£'000
£'000
£'000
Fixed assets
Tangible assets
9
1,659
1,744
Current assets
Stocks
10
5,306
5,114
Debtors
11
2,827
3,567
Cash at bank and in hand
11
-
0
8,144
8,681
Creditors: amounts falling due within one year
12
(5,994)
(6,418)
Net current assets
2,150
2,263
Total assets less current liabilities
3,809
4,007
Creditors: amounts falling due after more than one year
13
(293)
(453)
Net assets excluding pension surplus
3,516
3,554
Defined benefit pension surplus
17
439
218
Net assets
3,955
3,772
Capital and reserves
Called up share capital
20
1
1
Share premium account
18
757
757
Revaluation reserve
19
6
63
Profit and loss reserves
3,191
2,951
Total equity
3,955
3,772

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

The financial statements were approved by the board of directors and authorised for issue on 31 July 2024 and are signed on its behalf by:
Mr C Blundell
Director
Company registration number 02125263 (England and Wales)
INDESPENSION LTD
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 OCTOBER 2023
- 11 -
Share capital
Share premium account
Revaluation reserve
Profit and loss reserves
Total
£'000
£'000
£'000
£'000
£'000
Balance at 1 November 2021
1
757
147
2,617
3,522
Year ended 31 October 2022:
Profit
-
-
-
235
235
Other comprehensive income:
Actuarial gains on defined benefit plans
-
-
-
19
19
Tax relating to other comprehensive income
-
-
-
0
(4)
(4)
Total comprehensive income
-
-
-
250
250
Transfers
-
-
(84)
84
-
Balance at 31 October 2022
1
757
63
2,951
3,772
Year ended 31 October 2023:
Loss
-
-
-
(5)
(5)
Other comprehensive income:
Actuarial gains on defined benefit plans
-
-
-
242
242
Tax relating to other comprehensive income
-
-
-
0
(54)
(54)
Total comprehensive income
-
-
-
183
183
Transfers
-
-
(57)
57
-
Balance at 31 October 2023
1
757
6
3,191
3,955
INDESPENSION LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 OCTOBER 2023
- 12 -
1
Accounting policies
Company information

Indespension Ltd is a private company limited by shares incorporated in England and Wales. The registered office is Paragon Business Park, Chorley New Road, Horwich, Bolton, BL6 6HG.

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 £1,000 except where otherwise indicated.

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

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

 

 

The financial statements of the company are consolidated in the financial statements of D.R.A. Ltd. These consolidated financial statements are available from its registered office, Paragon Business Park, Chorley New Road, Horwich, Bolton, BL6 6HG.

INDESPENSION LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 OCTOBER 2023
1
Accounting policies
(Continued)
- 13 -
1.2
Going concern

Whilst the business continues to perform well, it faces future hurdles around cost pressures – primarily around impact of inflation and high interest rates, as well as salary cost rises for cost of living and challenges around labour availability.true

 

The directors will continue to monitor these items closely and will make decisions to align the business with movements up or down in any of these cost areas promptly.

 

Previous actions taken enabled the company to establish a strong financial platform. This, together with the current balance sheet strength, positions the company well.

 

The directors have prepared cash flow projections for the company to cover at least the twelve months following the approval of the financial statements as well as considering obligations falling due over the next twelve months. The projections indicate that the company is expected to generate sufficient resources to meet their obligations as they fall due. In addition, confirmation has been received from the parent company that they will continue to support the operations of the company financially for at least 12 months from the date the financial statements are approved.

After considering the impact of the above, at 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
Research and development expenditure

Research expenditure is written off against profits in the year in which it is incurred. Identifiable development expenditure is capitalised to the extent that the technical, commercial and financial feasibility can be demonstrated.

1.5
Tangible fixed assets

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

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

Leasehold improvements
over the period of the lease
Plant and machinery
10-30% straight line
Fixtures and fittings
7-20% straight line
Motor vehicles
20% straight line
INDESPENSION LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 OCTOBER 2023
1
Accounting policies
(Continued)
- 14 -

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
Impairment of fixed assets

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

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.

1.7
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.

 

Work in progress is valued on the basis of direct costs plus attributable overheads based on normal level of activity. Provision is made for any foreseeable losses where appropriate. No element of profit is included in the valuation of work in progress.

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

1.8
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.

INDESPENSION LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 OCTOBER 2023
1
Accounting policies
(Continued)
- 15 -
1.9
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

All of the company's assets are basic financial assets.

Impairment of financial assets

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

 

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

 

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

Derecognition of financial assets

Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire or are settled, or when the 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.

INDESPENSION LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 OCTOBER 2023
1
Accounting policies
(Continued)
- 16 -
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

All of the company's liabilities are basic financial liabilities.

Derecognition of financial liabilities

Financial liabilities are derecognised when the company’s contractual obligations expire or are discharged or cancelled.

1.10
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.

1.11
Taxation

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

Current tax

The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the profit and loss account because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The 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 liabilities are generally recognised for all timing differences and deferred tax assets are recognised to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits. Such assets and liabilities are not recognised if the timing difference arises from goodwill or from the initial recognition of other assets and liabilities in a transaction that affects neither the tax profit nor the accounting profit.

 

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

INDESPENSION LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 OCTOBER 2023
1
Accounting policies
(Continued)
- 17 -
1.12
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.

1.13
Retirement benefits

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

The cost of providing benefits under defined benefit plans is determined separately for each plan using the projected unit credit method, and is based on actuarial advice.

 

The change in the net defined benefit liability arising from employee service during the year is recognised as an employee cost. The cost of plan introductions, benefit changes, settlements and curtailments are recognised as an expense in measuring profit or loss in the period in which they arise.

The net interest element is determined by multiplying the net defined benefit liability by the discount rate, taking into account any changes in the net defined benefit liability during the period as a result of contribution and benefit payments. The net interest is recognised in profit or loss as other finance revenue or cost.

 

Remeasurement changes comprise actuarial gains and losses, the effect of the asset ceiling and the return on the net defined benefit liability excluding amounts included in net interest. These are recognised immediately in other comprehensive income in the period in which they occur and are not reclassified to profit and loss in subsequent periods.

The net defined benefit pension asset or liability in the balance sheet comprises the total for each plan of the present value of the defined benefit obligation (using a discount rate based on high quality corporate bonds), less the fair value of plan assets out of which the obligations are to be settled directly. Fair value is based on market price information, and in the case of quoted securities is the published bid price. The value of a net pension benefit asset is limited to the amount that may be recovered either through reduced contributions or agreed refunds from the scheme.

1.14
Leases

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

 

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

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

INDESPENSION LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 OCTOBER 2023
1
Accounting policies
(Continued)
- 18 -
1.15
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.

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.

Key sources of estimation uncertainty

The estimates and assumptions which have a significant risk of causing a material adjustment to the carrying amount of assets and liabilities are as follows.

Defined benefit pension scheme

The present value of the defined benefit pension scheme liability depends on a number of factors that are determined on an actuarial basis using a variety of assumptions. The assumptions used in determining the net cost or income for pensions include the discount rate. Any changes in these assumptions, which are disclosed in the notes to the accounts, will impact the carrying amount of the pension liability.

3
Turnover
2023
2022
£'000
£'000
Turnover analysed by class of business
Provision of goods and services
18,803
20,509
2023
2022
£'000
£'000
Turnover analysed by geographical market
United Kingdom
17,800
18,928
Export sales
1,003
1,581
18,803
20,509
INDESPENSION LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 OCTOBER 2023
- 19 -
4
Operating profit
2023
2022
Operating profit for the year is stated after charging/(crediting):
£'000
£'000
Exchange losses
36
150
Fees payable to the company's auditor for the audit of the company's financial statements
14
12
Depreciation of owned tangible fixed assets
254
225
Depreciation of tangible fixed assets held under finance leases
108
108
(Profit)/loss on disposal of tangible fixed assets
(20)
30
Operating lease charges
679
565
5
Employees

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

2023
2022
Number
Number
Office management
25
25
Manufacturing
81
80
Sales and distribution
66
71
Total
172
176

Their aggregate remuneration comprised:

2023
2022
£'000
£'000
Wages and salaries
5,052
4,798
Social security costs
481
452
Pension costs
137
115
5,670
5,365
6
Directors' remuneration
2023
2022
£'000
£'000
Remuneration for qualifying services
314
366
Company pension contributions to defined contribution schemes
10
8
324
374

The number of directors for whom retirement benefits are accruing under defined contribution schemes amounted to 5 (2022 - 5).

INDESPENSION LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 OCTOBER 2023
6
Directors' remuneration
(Continued)
- 20 -
Remuneration disclosed above include the following amounts paid to the highest paid director:
2023
2022
£'000
£'000
Remuneration for qualifying services
89
87
Company pension contributions to defined contribution schemes
1
1
7
Interest payable and similar expenses
2023
2022
£'000
£'000
Interest on bank overdrafts and loans
183
124
Interest on finance leases and hire purchase contracts
24
24
Net interest on the net defined benefit liability
(10)
(7)
197
141
8
Taxation
2023
2022
£'000
£'000
Deferred tax
Origination and reversal of timing differences
(54)
(4)

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

2023
2022
£'000
£'000
(Loss)/profit before taxation
(59)
231
Expected tax (credit)/charge based on the standard rate of corporation tax in the UK of 22.50% (2022: 19.00%)
(13)
44
Tax effect of expenses that are not deductible in determining taxable profit
-
0
7
Tax effect of utilisation of tax losses not previously recognised
-
0
(89)
Unutilised tax losses carried forward
(41)
-
0
Group relief
-
0
38
Other permanent differences
-
0
(4)
Taxation credit for the year
(54)
(4)
INDESPENSION LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 OCTOBER 2023
8
Taxation
(Continued)
- 21 -

In addition to the amount credited to the profit and loss account, the following amounts relating to tax have been recognised directly in other comprehensive income:

2023
2022
£'000
£'000
Deferred tax arising on:
Actuarial differences recognised as other comprehensive income
54
4
9
Tangible fixed assets
Leasehold improvements
Plant and machinery
Fixtures and fittings
Motor vehicles
Total
£'000
£'000
£'000
£'000
£'000
Cost or deemed cost
At 1 November 2022
362
3,635
919
38
4,954
Additions
62
108
96
11
277
Disposals
-
0
-
0
-
0
(19)
(19)
At 31 October 2023
424
3,743
1,015
30
5,212
Depreciation and impairment
At 1 November 2022
118
2,705
349
38
3,210
Depreciation charged in the year
30
228
103
1
362
Eliminated in respect of disposals
-
0
-
0
-
0
(19)
(19)
At 31 October 2023
148
2,933
452
20
3,553
Carrying amount
At 31 October 2023
276
810
563
10
1,659
At 31 October 2022
244
930
570
-
0
1,744

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
£'000
£'000
Plant and machinery
516
624

The directors elected to take the previous UK GAAP valuation of plant and machinery on the date of transition to FRS 102 as the deemed cost at that date. The directors continue to monitor carrying values and are releasing the excess in depreciation of the revaluation value against the revaluation reserve. This is expected to be fully released within 12 months.

INDESPENSION LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 OCTOBER 2023
- 22 -
10
Stocks
2023
2022
£'000
£'000
Raw materials and consumables
1,058
1,249
Work in progress
95
137
Finished goods and goods for resale
4,153
3,728
5,306
5,114

Stock with a gross carrying value of £5,354,000 (2022: £5,144,000) has been written down by £48,000 (2022: £30,000).

11
Debtors
2023
2022
Amounts falling due within one year:
£'000
£'000
Trade debtors
1,297
2,255
Amounts owed by group undertakings
995
843
Other debtors
53
53
Prepayments and accrued income
482
416
2,827
3,567

Trade debtors with a gross value of £1,321,000 (2022: £2,261,000) have been written down by £24,000 (2022: £6,000).

12
Creditors: amounts falling due within one year
2023
2022
Notes
£'000
£'000
Bank loans and overdrafts
14
70
1,170
Obligations under finance leases
15
89
148
Other bank borrowings
14
1,501
-
0
Trade creditors
3,571
4,309
Taxation and social security
496
677
Other creditors
63
45
Accruals and deferred income
204
69
5,994
6,418
INDESPENSION LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 OCTOBER 2023
- 23 -
13
Creditors: amounts falling due after more than one year
2023
2022
Notes
£'000
£'000
Bank loans and overdrafts
14
117
187
Obligations under finance leases
15
175
265
Other borrowings
14
1
1
293
453
14
Loans and overdrafts
2023
2022
£'000
£'000
Bank loans
187
257
Bank overdrafts
-
0
1,100
Preference shares
1
1
Other bank borrowings
1,501
-
0
1,689
1,358
Payable within one year
1,571
1,170
Payable after one year
118
188

The bank loan, bank overdraft and other bank borrowings are secured by fixed and floating charges over the assets of the company. The bank overdraft and other bank borrowings are repayable on demand.

The bank loan total comprises a £186,667 (2022: £256,666) secured Coronavirus Business Interruption Loan Scheme (CBILS) loan repayable in instalments between July 2021 and June 2026 and carrying an interest rate of 3.99% above base rate from July 2021.

15
Finance lease obligations
2023
2022
Future minimum lease payments due under finance leases:
£'000
£'000
Within one year
89
148
In two to five years
175
259
In over five years
-
0
6
264
413

Finance lease payments represent rentals payable by the company for certain items of plant and machinery held under hire purchase. Leases include purchase options at the end of the lease period, and no restrictions are placed on the use of the assets. All leases are on a fixed repayment basis and no arrangements have been entered into for contingent rental payments. The lease creditors are secured on the assets to which they relate.

INDESPENSION LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 OCTOBER 2023
- 24 -
16
Deferred taxation

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

Liabilities
Liabilities
2023
2022
Balances:
£'000
£'000
Accelerated capital allowances
243
270
Tax losses
(347)
(312)
Short term timing differences
104
42
-
-
2023
Movements in the year:
£'000
Liability at 1 November 2022
-
Credit to profit or loss
(54)
Charge to other comprehensive income
54
Liability at 31 October 2023
-

It is impractical to estimate the movement of the deferred tax liability relating to retirement obligations in the 12 months following the balance sheet date, due to the estimation uncertainty over the related obligations, which can only be assessed following the next balance sheet date. Furthermore as at the signing date of these financial statements, the group has not finalised its capital expenditure programme for 2023/24, an assessment as to the likely movement of other related timing differences cannot be made.

17
Retirement benefit schemes
2023
2022
Defined contribution schemes
£'000
£'000
Charge to profit or loss in respect of defined contribution schemes
106
91

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.

There were outstanding pension contributions at the year end of £18,851 (2022: £19,961).

INDESPENSION LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 OCTOBER 2023
17
Retirement benefit schemes
(Continued)
- 25 -
Defined benefit schemes

The company operates a defined benefit scheme for qualifying employees. Under the scheme the employees are entitled to retirement benefits based on a proportion of final salary on attainment of the retirement age. No other post retirement benefits are provided. The scheme is fully funded.

 

The most recent actuarial valuations of plan assets and the present value of the defined benefit obligation were carried out at 31 December 2022.

 

The discount rate has been determined by reference to market yields on AA corporate bonds.

2023
2022
Key assumptions
%
%
Discount rate
5.50
4.90
Expected rate of increase of pensions in payment
2.70
2.60
Inflation (CPI)
2.70
2.60
Mortality assumptions
2023
2022

Assumed life expectations on retirement at age 65:

Years
Years
Retiring today
- Males
20.7
21.1
- Females
23.1
23.5
Retiring in 20 years
- Males
21.6
22.2
- Females
24.3
24.7
Amounts recognised in the profit and loss account
2023
2022
Costs/(income):
£'000
£'000
Net interest on net defined benefit liability/(asset)
(10)
(7)
Amounts recognised in other comprehensive income
2023
2022
Costs/(income):
£'000
£'000
Actual return on scheme assets
108
218
Less: calculated interest element
262
211
Return on scheme assets excluding interest income
370
429
Actuarial changes related to obligations
(612)
(448)
Total costs/(income)
(242)
(19)
INDESPENSION LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 OCTOBER 2023
17
Retirement benefit schemes
(Continued)
- 26 -

The amounts included in the balance sheet arising from the company's obligations in respect of defined benefit plans are as follows:

2023
2022
Liabilities/(assets):
£'000
£'000
Present value of defined benefit obligations
4,654
5,291
Fair value of plan assets
(5,093)
(5,509)
Surplus in scheme
(439)
(218)
2023
Movements in the present value of defined benefit obligations
£'000
Liabilities at 1 November 2022
5,291
Benefits paid
(277)
Actuarial gains and losses
(612)
Interest cost
252
At 31 October 2023
4,654

The defined benefit obligations arise from plans which are wholly or partly funded.

2023
Movements in the fair value of plan assets
£'000
Fair value of assets at 1 November 2022
5,509
Interest income
262
Return on plan assets (excluding amounts included in net interest)
(370)
Benefits paid
(277)
Other
(31)
At 31 October 2023
5,093
2023
2022
Fair value of plan assets
£'000
£'000
Equity instruments
3,245
3,556
Property
1,550
1,550
Cash
23
33
Annuities
275
370
5,093
5,509
INDESPENSION LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 OCTOBER 2023
- 27 -
18
Share premium account

Consideration received for shares issued above their nominal value net of transaction costs.

19
Revaluation reserve

The cumulative revaluation gains and losses in respect of freehold property, except revaluation gains and losses recognised in profit or loss.

20
Share capital
2023
2022
£'000
£'000
Ordinary share capital
Issued and fully paid
1,000 Ordinary shares of £1 each
1
1
1
1

The company also had 512 preference shares of £1 each allotted, called up and fully paid at the end of the current year and the prior year.

 

The ordinary shares are included within equity, and the preference shares are classified as financial liabilities.

21
Operating lease commitments
Lessee

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
£'000
£'000
Within one year
799
842
Between two and five years
1,540
1,604
In over five years
396
415
2,735
2,861
22
Related party transactions

In accordance with FRS102, Section 33 'Related Party Transactions', transactions with other group undertakings owned 100% within the group have not been disclosed in these financial statements.

 

The Moorlands Pension Fund is a self administered pension scheme of which D.R.A. Ltd is the sponsoring employer. During the year the company made payments of £24,000 (2022: £24,000) to Moorlands Pension Fund relating to the rental of certain properties.

INDESPENSION LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 OCTOBER 2023
- 28 -
23
Ultimate controlling party

The directors consider the ultimate parent undertaking to be D.R.A. Ltd, a company registered in England & Wales, which is the largest group of undertakings to prepare group accounts including the financial statements of the company, and the ultimate controlling party to be Dr D Graham and close family. Copies of the group accounts can be obtained from Companies House, Crown Way, Cardiff, CF14 3UZ.

 

The company was under the control of the directors of D.R.A. Ltd, which controlled 100% of the company's issued ordinary share capital throughout the whole of the current year and the previous year.

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