Company registration number SC142257 (Scotland)
Had-Fab Limited
Annual report and financial statements
for the year ended 31 March 2024
Had-Fab Limited
Company information
Directors
Mr S Harrison
Mrs A Harrison
Secretary
Mrs A Harrison
Company number
SC142257
Registered office
Had-Fab Limited
Macmerry Industrial Estate
Tranent
EH33 1RD
Auditor
Henderson Loggie LLP
11 - 15 Thistle Street
Edinburgh
EH2 1DF
Had-Fab Limited
Contents
Page
Strategic report
1 - 3
Directors' report
4
Directors' responsibilities statement
5
Independent auditor's report
6 - 8
Profit and loss account
9
Statement of comprehensive income
10
Balance sheet
11
Statement of changes in equity
12
Notes to the financial statements
13 - 27
Had-Fab Limited
Strategic Report
for the year ended 31 March 2024
- 1 -
The directors present the strategic report for the year ended 31 March 2024.
Fair review of the business
The directors present financial key performance indicators below:
The directors report a challenging year for Had-Fab Limited, marked by a decline in both turnover and profit. The Transmission & Distribution market has temporarily slowed over the last year as the sector gears up to undertake the required significant upgrades in the network to deliver on the net zero carbon emissions targets via renewable generation.
A significant expansion in this division is expected in the coming years to meet these targets and Had-Fab Limited has continued to invest in the facilities and its people in preparation for the future demand. To partially offset this temporary decline in the power sector, our Civils & Infrastructure division has seen continued growth in the year. The completion of key projects in the year has expanded our portfolio demonstrating a strong capability in this market.
Relentless focus on continuous improvement has helped increase the operational productivity and capacity needed to reach our revenue and profit growth objectives.
At the year end the company continued to maintain a strong balance sheet with net assets amounting to £6.1m (2023 - £6.1m).
Had-Fab Limited
Strategic Report (continued)
for the year ended 31 March 2024
- 2 -
Principal risks and uncertainties
The company is exposed to market risks arising from its operations. The directors have policies in place to ensure such risks are managed.
The labour market is a further risk for Had-Fab. Skilled labour remains difficult to attract. Had-Fab Limited has looked to secure the labour force for the long term with heavy investment in our apprenticeship programme. Changes in shift patterns condensing the working week to 4-days has allowed us to retain a higher level of staff.
Business risk
Financial instruments
The company's principal financial instruments include bank overdrafts, loans and hire purchase facilities, the main purpose of which is to raise finance for the company's operations. In addition, the company has various other financial assets and liabilities such as trade debtors and trade creditors arising directly from its operations.
The company's financial risk management objectives are to ensure sufficient working capital and cash flow for the company and to ensure there is sufficient support for its growth strategy. No treasury transactions or derivatives are entered into.
Credit risk
The company provides goods on credit to its customers. The risk arises from the possibility that customers will fail to meet their obligations to pay sums due. To manage this risk all customers have their credit worthiness assessed and credit terms assigned to them. Systems are also in place to monitor adherence to these terms as appropriate. Trade debtors are monitored on an ongoing basis and provision is made for doubtful debts where necessary.
Liquidity risk
The company is funded by retained profits, an agreed loan and overdraft facility and an agreed hire purchase facility. The company's policy is to ensure that any projected borrowing required is covered by committed facilities with its bankers. The company manages its cash and borrowing requirements in order to maximise interest income and minimise interest expense, whilst ensuring the company has sufficient liquid resources to meet the operating needs of the business.
Future devlopment
The company has identified its future growth and development plans via its strategic planning process over a 5-year rolling horizon with key objectives and targets for each successive year.
We are encouraged that our core market in the power sector shows signs of continued growth within the UK network infrastructure.
Our capital commitment has improved our capabilities in our core markets as well as increasing our offerings in the Civils and Infrastructure market. We look to strengthen our relationship with key partners in the Civils and Infrastructure market and continue to develop this sector as part of our strategic growth plan.
Continued investment in our operations in terms of skills, processes improvement and technology will help to increase productivity and capacity needed to reach our revenue and profit growth objectives. We have a programmed of major capital expenditure approved to further automate more of our key manufacturing processes to increase capacity to meet forecast demand.
We also have an increased focus on our people and culture development strategy to ensure we are investing in our core assets, our people, to enhance the experience of working at Had-Fab and to make it attractive in terms of retention and securing new talent.
Had-Fab Limited
Strategic Report (continued)
for the year ended 31 March 2024
- 3 -
Mr S Harrison
Director
5 August 2024
Had-Fab Limited
Directors' report
for the year ended 31 March 2024
- 4 -
The directors present their annual report and financial statements for the year ended 31 March 2024.
Principal activities
The principal activity of the company continued to be that of steel fabrication.
Results and dividends
The results for the year are set out on page 9.
Ordinary dividends were paid amounting to £429,400. The directors do not recommend payment of a further dividend.
Directors
The directors who held office during the year and up to the date of signature of the financial statements were as follows:
Mr S Harrison
Mrs A Harrison
Auditor
Henderson Loggie LLP were appointed as auditor to the company and in accordance with section 485 of the Companies Act 2006, a resolution proposing that they be re-appointed will be put at a General Meeting.
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.
On behalf of the board
Mr S Harrison
Director
5 August 2024
Had-Fab Limited
Directors' responsibilities statement
for the year ended 31 March 2024
- 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:
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 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.
Had-Fab Limited
Independent auditor's report
to the member of Had-Fab Limited
- 6 -
Opinion
We have audited the financial statements of Had-Fab Limited (the 'company') for the year ended 31 March 2024 which comprise the profit and loss account, 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:
give a true and fair view of the state of the company's affairs as at 31 March 2024 and of its 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.
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.
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.
Had-Fab Limited
Independent auditor's report (continued)
to the member of Had-Fab Limited
- 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:
the information given in the strategic report and the directors' report for the financial year for which the financial statements are prepared is consistent with the financial statements; and
the strategic report and the directors' report have been prepared in accordance with applicable legal requirements.
Matters on which we are required to report by exception
In the light of the knowledge and understanding of the company and its environment obtained in the course of the audit, we have not identified material misstatements in the strategic report or the directors' report.
We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to report to you if, in our opinion:
adequate accounting records have not been kept, or returns adequate for our audit have not been received from branches not visited by us; or
the financial statements are not in agreement with the accounting records and returns; or
certain disclosures of remuneration specified by law are not made; or
we have not received all the information and explanations we require for our audit.
Responsibilities of directors
As explained more fully in the directors' responsibilities statement, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. In preparing the financial statements, the directors are responsible for assessing the company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the company or to cease operations, or have no realistic alternative but to do so.
Auditor's responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.
The extent to which our procedures are capable of detecting irregularities, including fraud, is detailed below.
As part of our planning process:
We enquired of management the systems and controls the company has in place, the areas of the financial statements that are mostly susceptible to the risk of irregularities and fraud, and whether there was any known, suspected or alleged fraud. Management informed us that there were no instances of known, suspected or alleged fraud;
We obtained an understanding of the legal and regulatory frameworks applicable to the company. We determined that the following were most relevant: health and safety; Employment Law; and compliance with the UK Companies Act.
We considered the incentives and opportunities that exist in the company, including the extent of management bias, which present a potential for irregularities and fraud to be perpetrated, and tailored our risk assessment accordingly; and
Using our knowledge of the company, together with the discussions held with management at the planning stage, we formed a conclusion on the risk of misstatement due to irregularities including fraud and tailored our procedures according to this risk assessment.
Had-Fab Limited
Independent auditor's report (continued)
to the member of Had-Fab Limited
- 8 -
The key procedures we undertook to detect irregularities including fraud during the course of the audit included:
Enquiries with management about any known or suspected instances of non-compliance with laws and regulations and fraud;
Reviewing legal and professional fee expense codes for evidence of non-compliance or litigation;
Inspecting Health & Safety audit reports for evidence of non-compliance;
Challenging assumptions and judgements made by management in their significant accounting estimates, in particular in relation to the carrying value of tangible fixed assets, stock and trade debtors, along with the estimation of accruals; and
Auditing the risk of management override of controls, including through testing journal entries and other adjustments for appropriateness.
Owing to the inherent limitations of an audit, there is an unavoidable risk that some material misstatements in the financial statements may not be detected, even though the audit is properly planned and performed in accordance with the ISAs (UK). For instance, the further removed non-compliance is from the events and transactions reflected in the financial statements, the less likely the auditor is to become aware of it or to recognise the non-compliance.
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.
This report is made solely to the company's member 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 member those matters we are required to state to the member 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 member, for our audit work, for this report, or for the opinions we have formed.
Diana Penny
Senior Statutory Auditor
For and on behalf of Henderson Loggie LLP
5 August 2024
Chartered Accountants
Statutory Auditor
11 - 15 Thistle Street
Edinburgh
EH2 1DF
Had-Fab Limited
Profit and loss account
for the year ended 31 March 2024
- 9 -
2024
2023
Notes
£
£
Turnover
3
14,982,512
19,094,627
Cost of sales
(10,934,643)
(12,665,943)
Gross profit
4,047,869
6,428,684
Distribution costs
(434,141)
(597,716)
Administrative expenses
(3,197,261)
(3,201,445)
Other operating income
191,382
43,164
Operating profit
4
607,849
2,672,687
Interest receivable and similar income
7
4,339
1,134
Interest payable and similar expenses
8
(100,883)
(63,868)
Profit before taxation
511,305
2,609,953
Tax on profit
9
(176,291)
(367,440)
Profit for the financial year
335,014
2,242,513
The profit and loss account has been prepared on the basis that all operations are continuing operations.
Had-Fab Limited
Statement of comprehensive income
for the year ended 31 March 2024
- 10 -
2024
2023
£
£
Profit for the year
335,014
2,242,513
Other comprehensive income
-
-
Total comprehensive income for the year
335,014
2,242,513
Had-Fab Limited
Balance sheet
as at 31 March 2024
- 11 -
2024
2023
Notes
£
£
£
£
Fixed assets
Tangible assets
11
4,947,204
5,103,950
Current assets
Stocks
12
1,081,960
1,130,731
Debtors
13
6,025,577
4,902,444
Cash at bank and in hand
31,650
1,611,462
7,139,187
7,644,637
Creditors: amounts falling due within one year
14
(4,442,164)
(4,952,310)
Net current assets
2,697,023
2,692,327
Total assets less current liabilities
7,644,227
7,796,277
Creditors: amounts falling due after more than one year
15
(1,221,105)
(1,323,182)
Provisions for liabilities
Deferred tax liability
18
(372,965)
(328,552)
(372,965)
(328,552)
Net assets
6,050,157
6,144,543
Capital and reserves
Called up share capital
21
8,502
8,502
Profit and loss reserves
6,041,655
6,136,041
Total equity
6,050,157
6,144,543
The financial statements were approved by the board of directors and authorised for issue on 5 August 2024 and are signed on its behalf by:
Mr S Harrison
Mrs A Harrison
Director
Director
Company Registration No. SC142257
Had-Fab Limited
Statement of changes in equity
for the year ended 31 March 2024
- 12 -
Share capital
Profit and loss reserves
Total
Notes
£
£
£
Balance at 1 April 2022
8,502
4,224,728
4,233,230
Year ended 31 March 2023:
Profit and total comprehensive income for the year
-
2,242,513
2,242,513
Dividends
10
-
(331,200)
(331,200)
Balance at 31 March 2023
8,502
6,136,041
6,144,543
Year ended 31 March 2024:
Profit and total comprehensive income for the year
-
335,014
335,014
Dividends
10
-
(429,400)
(429,400)
Balance at 31 March 2024
8,502
6,041,655
6,050,157
Had-Fab Limited
Notes to the financial statements
for the year ended 31 March 2024
- 13 -
1
Accounting policies
Company information
Had-Fab Limited is a private company limited by shares incorporated in Scotland. The registered office is Had-Fab Limited, Macmerry Industrial Estate, Tranent, EH33 1RD.
1.1
Accounting convention
These financial statements have been prepared in accordance with FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” (“FRS 102”) and the requirements of the Companies Act 2006.
The financial statements are prepared in sterling, which is the functional currency of the company. Monetary amounts in these financial statements are rounded to the nearest £.
The financial statements have been prepared under the historical cost convention, [modified to include the revaluation of freehold properties and to include investment properties and certain financial instruments at fair value]. 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:
Section 7 ‘Statement of Cash Flows’: Presentation of a statement of cash flow and related notes and disclosures;
Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instrument Issues: Interest income/expense and net gains/losses for financial instruments not measured at fair value; basis of determining fair values; details of collateral, loan defaults or breaches, details of hedges, hedging fair value changes recognised in profit or loss and in other comprehensive income;
Section 26 ‘Share based Payment’: Share-based payment expense charged to profit or loss, reconciliation of opening and closing number and weighted average exercise price of share options, how the fair value of options granted was measured, measurement and carrying amount of liabilities for cash-settled share-based payments, explanation of modifications to arrangements;
Section 33 ‘Related Party Disclosures’: Compensation for key management personnel.
The financial statements of the company are consolidated in the financial statements of Had-Fab Holdings Limited. These consolidated financial statements are available from its registered office, Macmerry Industrial Estate, Tranent, East Lothian, EH33 1RD.
Had-Fab Limited
Notes to the financial statements (continued)
for the year ended 31 March 2024
1
Accounting policies (continued)
- 14 -
1.2
Going concern
The directors are required to prepare the statutory financial statements on the going concern basis unless it is inappropriate to presume that the company will continue in business. In satisfaction of this responsibility the directors have considered the company's ability to meet its liabilities as they fall due. This assessment considers the company's principal risks and is dependent on a number of factors including financial performance and access to funding facilities. true
The directors have prepared detailed financial projections for a period extending over 12 months from the date of approval of these financial statements. These projections have also been sensitised to reflect plausible downside scenarios.
Based on these projections, the directors have a reasonable expectation that the company has adequate resources with sufficient levers available to continue in operational existence for the foreseeable future and to meet its obligations as they fall due.
The directors therefore consider that it is appropriate to prepare the financial statements on the going concern basis.
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 consists of two main service lines, revenue from design & fabrication services and revenue from sale of materials & fabricated steel structures.
Revenue from the sale of fabricated steel structures and materials 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.
Where bill-and-hold arrangements are in place, revenue is only recognised when the reason for the arrangements substantive, the goods are ready for physical transfer, the goods are separately identified as belonging to the customer and the company does no have the ability to use the goods or direct to another customer.
Revenue from design and fabrication services is recognised by reference to the stage of completion when the stage of completion, costs incurred and costs to complete can be estimated reliably. The stage of completion is calculated by comparing costs incurred, mainly in relation to contractual hourly staff rates and materials, as a proportion of total costs. Where the outcome cannot be estimated reliably, revenue is recognised only to the extent of the expenses recognised that it is probable will be recovered.
1.4
Tangible fixed assets
Tangible fixed assets are initially measured at cost and subsequently measured at cost or valuation, net of depreciation and any impairment losses.
Had-Fab Limited
Notes to the financial statements (continued)
for the year ended 31 March 2024
1
Accounting policies (continued)
- 15 -
Depreciation is recognised so as to write off the cost or valuation of assets less their residual values over their useful lives on the following bases:
Freehold buildings
4% straight line
Plant and machinery
5-15% straight line and 20% reducing balance
Fixtures and fittings
20% reducing balance
Motor vehicles
25% straight line
Freehold land is not depreciated.
The gain or loss arising on the disposal of an asset is determined as the difference between the sale proceeds and the carrying value of the asset, and is credited or charged to profit or loss.
1.5
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.
1.6
Stocks
Stocks are stated at the lower of cost and estimated selling price less costs to complete and sell. Cost comprises direct materials and, where applicable, direct labour costs and those overheads that have been incurred in bringing the stocks to their present location and condition.
Stocks held for distribution at no or nominal consideration are measured at the lower of cost and replacement cost, adjusted where applicable for any loss of service potential.
At each reporting date, an assessment is made for impairment. Any excess of the carrying amount of stocks over its estimated selling price less costs to complete and sell is recognised as an impairment loss in profit or loss. Reversals of impairment losses are also recognised in profit or loss.
Had-Fab Limited
Notes to the financial statements (continued)
for the year ended 31 March 2024
1
Accounting policies (continued)
- 16 -
1.7
Cash and cash equivalents
Cash and cash equivalents are basic financial assets and include cash in hand, deposits held at call with banks, other short-term liquid investments with original maturities of three months or less, and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities.
1.8
Financial instruments
The company has elected to apply the provisions of Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instruments Issues’ of FRS 102 to all of its financial instruments.
Financial instruments are recognised in the company's balance sheet when the company becomes party to the contractual provisions of the instrument.
Financial assets and liabilities are offset, with the net amounts presented in the financial statements, when there is a legally enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously.
Basic financial assets
Basic financial assets, which include debtors and cash and bank balances, are initially measured at transaction price including transaction costs and are subsequently carried at amortised cost using the effective interest method unless the arrangement constitutes a financing transaction, where the transaction is measured at the present value of the future receipts discounted at a market rate of interest. Financial assets classified as receivable within one year are not amortised.
Other financial assets
Other financial assets, including investments in equity instruments which are not subsidiaries, associates or joint ventures, are initially measured at fair value, which is normally the transaction price. Such assets are subsequently carried at fair value and the changes in fair value are recognised in profit or loss, except that investments in equity instruments that are not publicly traded and whose fair values cannot be measured reliably are measured at cost less impairment.
Impairment of financial assets
Financial assets, other than those held at fair value through profit and loss, are assessed for indicators of impairment at each reporting end date.
Financial assets are impaired where there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial asset, the estimated future cash flows have been affected. If an asset is impaired, the impairment loss is the difference between the carrying amount and the present value of the estimated cash flows discounted at the asset’s original effective interest rate. The impairment loss is recognised in profit or loss.
If there is a decrease in the impairment loss arising from an event occurring after the impairment was recognised, the impairment is reversed. The reversal is such that the current carrying amount does not exceed what the carrying amount would have been, had the impairment not previously been recognised. The impairment reversal is recognised in profit or loss.
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.
Had-Fab Limited
Notes to the financial statements (continued)
for the year ended 31 March 2024
1
Accounting policies (continued)
- 17 -
Classification of financial liabilities
Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the company after deducting all of its liabilities.
Basic financial liabilities
Basic financial liabilities, including creditors, bank loans, loans from fellow group companies and preference shares that are classified as debt, are initially recognised at transaction price unless the arrangement constitutes a financing transaction, where the debt instrument is measured at the present value of the future payments discounted at a market rate of interest. Financial liabilities classified as payable within one year are not amortised.
Debt instruments are subsequently carried at amortised cost, using the effective interest rate method.
Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Amounts payable are classified as current liabilities if payment is due within one year or less. If not, they are presented as non-current liabilities. Trade creditors are recognised initially at transaction price and subsequently measured at amortised cost using the effective interest method.
Other financial liabilities
Derivatives, including interest rate swaps and forward foreign exchange contracts, are not basic financial instruments. Derivatives are initially recognised at fair value on the date a derivative contract is entered into and are subsequently re-measured at their fair value. Changes in the fair value of derivatives are recognised in profit or loss in finance costs or finance income as appropriate, unless hedge accounting is applied and the hedge is a cash flow hedge.
Debt instruments that do not meet the conditions in FRS 102 paragraph 11.9 are subsequently measured at fair value through profit or loss. Debt instruments may be designated as being measured at fair value through profit or loss to eliminate or reduce an accounting mismatch or if the instruments are measured and their performance evaluated on a fair value basis in accordance with a documented risk management or investment strategy.
Derecognition of financial liabilities
Financial liabilities are derecognised when the company’s contractual obligations expire or are discharged or cancelled.
1.9
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.
1.10
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.
Had-Fab Limited
Notes to the financial statements (continued)
for the year ended 31 March 2024
1
Accounting policies (continued)
- 18 -
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.
1.11
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.
1.12
Retirement benefits
Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.
1.13
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.
Rental income from operating leases is recognised on a straight line basis over the term of the relevant lease. Initial direct costs incurred in negotiating and arranging an operating lease are added to the carrying amount of the leased asset and recognised on a straight line basis over the lease term.
Had-Fab Limited
Notes to the financial statements (continued)
for the year ended 31 March 2024
1
Accounting policies (continued)
- 19 -
1.14
Government grants
Government grants are recognised at the fair value of the asset received or receivable when there is reasonable assurance that the grant conditions will be met and the grants will be received.
A grant that specifies performance conditions is recognised in income when the performance conditions are met. Where a grant does not specify performance conditions it is recognised in income when the proceeds are received or receivable. A grant received before the recognition criteria are satisfied is recognised as a liability.
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.
Stock valuation
The carrying value of stock is judgemental as the directors are required to estimate the future selling price of stock less costs to complete and sell. The value of this estimate is compared to the carrying value, with any excess of the carrying value over the estimated amount being recognised as an impairment loss.
3
Turnover and other revenue
2024
2023
£
£
Turnover analysed by class of business
Rendering of services
372,785
1,552,301
Sale of goods
14,609,727
17,542,326
14,982,512
19,094,627
Had-Fab Limited
Notes to the financial statements (continued)
for the year ended 31 March 2024
3
Turnover and other revenue (continued)
- 20 -
2024
2023
£
£
Turnover analysed by geographical market
United Kingdom
14,576,354
18,153,370
Europe
406,158
941,257
14,982,512
19,094,627
2024
2023
£
£
Other revenue
Interest income
4,339
1,134
Grants received
43,208
6,248
4
Operating profit
2024
2023
Operating profit for the year is stated after charging/(crediting):
£
£
Exchange gains
(7,321)
(2)
Government grants
(43,208)
(6,248)
Fees payable to the company's auditor for the audit of the company's financial statements
29,000
27,500
Depreciation of owned tangible fixed assets
362,686
341,159
Depreciation of tangible fixed assets held under finance leases
123,247
119,773
(Profit)/loss on disposal of tangible fixed assets
-
5,258
Operating lease charges
184,793
138,598
5
Employees
The average monthly number of persons (including directors) employed by the company during the year was:
2024
2023
Number
Number
Shop floor
85
92
Office
40
23
Total
125
115
Had-Fab Limited
Notes to the financial statements (continued)
for the year ended 31 March 2024
5
Employees (continued)
- 21 -
Their aggregate remuneration comprised:
2024
2023
£
£
Wages and salaries
4,816,098
4,560,263
Social security costs
483,980
518,033
Pension costs
300,970
447,653
5,601,048
5,525,949
6
Directors' remuneration
2024
2023
£
£
Remuneration for qualifying services
22,000
54,708
Company pension contributions to defined contribution schemes
117,860
85,198
139,860
139,906
7
Interest receivable and similar income
2024
2023
£
£
Interest income
Other interest income
4,339
1,134
8
Interest payable and similar expenses
2024
2023
£
£
Interest on bank overdrafts and loans
72,355
49,925
Interest on finance leases and hire purchase contracts
28,528
13,943
100,883
63,868
9
Taxation
2024
2023
£
£
Current tax
UK corporation tax on profits for the current period
133,055
347,027
Adjustments in respect of prior periods
(1,177)
(85,530)
Total current tax
131,878
261,497
Had-Fab Limited
Notes to the financial statements (continued)
for the year ended 31 March 2024
9
Taxation
2024
2023
£
£ (continued)
- 22 -
Deferred tax
Origination and reversal of timing differences
44,413
105,943
Total tax charge
176,291
367,440
The actual charge for the year can be reconciled to the expected charge for the year based on the profit or loss and the standard rate of tax as follows:
2024
2023
£
£
Profit before taxation
511,305
2,609,953
Expected tax charge based on the standard rate of corporation tax in the UK of 25% (2023: 19%)
127,826
495,891
Tax effect of expenses that are not deductible in determining taxable profit
2,189
256
Tax effect of income not taxable in determining taxable profit
20,460
Adjustments in respect of prior years
(1,179)
(85,530)
Depreciation on assets not qualifying for tax allowances
57,005
(17,063)
Research and development tax credit
(20,460)
(52,427)
Other permanent differences
(11,098)
Deferred tax adjustments in respect of prior years
1,548
1,167
Remeasurement of deferred tax for changes in tax rate
25,146
Taxation charge for the year
176,291
367,440
10
Dividends
2024
2023
£
£
Final paid
429,400
331,200
Had-Fab Limited
Notes to the financial statements (continued)
for the year ended 31 March 2024
- 23 -
11
Tangible fixed assets
Freehold buildings
Plant and machinery
Fixtures and fittings
Motor vehicles
Total
£
£
£
£
£
Cost
At 1 April 2023
4,064,687
5,281,859
638,726
183,901
10,169,173
Additions
138,909
101,475
88,803
329,187
Disposals
(11,920)
(11,920)
At 31 March 2024
4,203,596
5,383,334
727,529
171,981
10,486,440
Depreciation and impairment
At 1 April 2023
1,108,304
3,532,339
353,485
71,095
5,065,223
Depreciation charged in the year
138,571
239,942
66,997
40,423
485,933
Eliminated in respect of disposals
(11,920)
(11,920)
At 31 March 2024
1,246,875
3,772,281
420,482
99,598
5,539,236
Carrying amount
At 31 March 2024
2,956,721
1,611,053
307,047
72,383
4,947,204
At 31 March 2023
2,956,383
1,749,520
285,241
112,806
5,103,950
The net carrying value of tangible fixed assets includes the following in respect of assets held under finance leases or hire purchase contracts.
2024
2023
£
£
Plant and machinery
779,356
754,102
Fixtures and fittings
14,830
18,539
Motor vehicles
21,911
40,752
816,097
813,393
12
Stocks
2024
2023
£
£
Raw materials and consumables
617,492
635,195
Work in progress
464,468
495,536
1,081,960
1,130,731
Had-Fab Limited
Notes to the financial statements (continued)
for the year ended 31 March 2024
- 24 -
13
Debtors
2024
2023
Amounts falling due within one year:
£
£
Trade debtors
2,842,206
3,327,181
Gross amounts owed by contract customers
162,187
Other debtors
2,494,978
1,055,358
Prepayments and accrued income
688,393
357,718
6,025,577
4,902,444
14
Creditors: amounts falling due within one year
2024
2023
Notes
£
£
Bank loans and overdrafts
16
214,183
77,116
Obligations under finance leases
17
130,008
187,190
Trade creditors
2,704,474
2,450,585
Amounts owed to group undertakings
11,630
12,560
Corporation tax
50,037
347,027
Other taxation and social security
458,955
573,019
Government grants
19
45,852
29,987
Other creditors
387,324
104,482
Accruals and deferred income
439,701
1,170,344
4,442,164
4,952,310
15
Creditors: amounts falling due after more than one year
2024
2023
Notes
£
£
Bank loans and overdrafts
16
860,580
937,060
Obligations under finance leases
17
272,423
302,409
Government grants
19
88,102
83,713
1,221,105
1,323,182
Had-Fab Limited
Notes to the financial statements (continued)
for the year ended 31 March 2024
- 25 -
16
Loans and overdrafts
2024
2023
£
£
Bank loans
1,053,254
1,014,176
Bank overdrafts
21,509
1,074,763
1,014,176
Payable within one year
214,183
77,116
Payable after one year
860,580
937,060
Bank loans and overdrafts are secured by bond and floating charge by Had-Fab Limited over the whole assets of the company and first standard securities over the factory and land at Macmerry Industrial Estate.
Bank loans comprise of three separate loans.
£492,518 is repayable in monthly instalments with the final repayment due in August 2030. Interest is payable on the debt at a rate of 1.70% above base rate.
£435,736 is repayable in monthly instalments with the final repayment due in November 2033. Interest is payable on the debt at a rate of 2.45% over base rate.
£125,000 is a capital import finance facility entered into to finance the purchase of new machinery, which will convert to hire purchase on receipt of the machinery. Interest is payable on the debt at a rate of 2.5% over base rate.
17
Finance lease obligations
2024
2023
Future minimum lease payments due under finance leases:
£
£
Within one year
130,008
187,190
In two to five years
272,423
302,409
402,431
489,599
Finance lease payments represent rentals payable by the company for certain items of plant and machinery. Leases include purchase options at the end of the lease period, and no restrictions are placed on the use of the assets. All leases are on a fixed repayment basis and no arrangements have been entered into for contingent rental payments.
Finance leases liabilities are secured over the assets to which they relate.
Had-Fab Limited
Notes to the financial statements (continued)
for the year ended 31 March 2024
- 26 -
18
Deferred taxation
The following are the major deferred tax liabilities and assets recognised by the company and movements thereon:
Liabilities
Liabilities
2024
2023
Balances:
£
£
Accelerated capital allowances
372,965
328,552
2024
Movements in the year:
£
Liability at 1 April 2023
328,552
Charge to profit or loss
44,413
Liability at 31 March 2024
372,965
19
Government grants
2024
2023
£
£
Arising from government grants
133,954
113,700
Included in the financial statements as follows:
Current liabilities
45,852
29,987
Non-current liabilities
88,102
83,713
133,954
113,700
20
Retirement benefit schemes
2024
2023
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
300,970
447,653
21
Share capital
2024
2023
2024
2023
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary Shares of £1 each of £1 each
8,502
8,502
8,502
8,502
Had-Fab Limited
Notes to the financial statements (continued)
for the year ended 31 March 2024
- 27 -
22
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:
2024
2023
£
£
Within one year
175,497
105,900
Between two and five years
505,535
409,004
In over five years
662,500
704,726
1,343,532
1,219,630
23
Capital commitments
Amounts contracted for but not provided in the financial statements:
2024
2023
£
£
Acquisition of tangible fixed assets
1,000,000
127,165
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