The directors present the strategic report for the period ended 31 December 2023.
The company is a holding company and is therefore dependent on the trade of its subsidiary, HHB Communications Limited.
The company was incorporated on 6 December 2022. During the period, a group reconstruction was undertaken resulting in the company acquiring HHB Communications Limited via a dividend in specie.
Subsequently, during the period, all the shares in this company were acquired by Midwich Limited, an AIM listed business, on 12th July 2023.
Treasure operations and financial instruments
The directors regularly review the financial requirements of the company and the risks associated therewith. The company depends upon the support of its subsidiary, HHB Communications Limited and its parent company, Midwich Limited, to provide financial support to this company as required.
Liquidity risk
The company manages its cash and borrowing requirements through the support of the group 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.
Credit risk
Investments of cash surpluses, borrowings and derivative instruments are made through banks and companies which mist fulfil credit rating criteria approved by the board.
The board and management use the following key performance indicators to monitor the success of the business:
Loss for the period - £148,250
Net assets - £23,851,750
From the perspective of the Board of the Company, as a result of the Group (Midwich Group plc) governance structure, the matters that it is responsible for considering under Section 172 (1) of the Companies Act 2006 (‘s172’) have been considered to an appropriate extent by the Board at H H B Communications Holdings Limited in relation both to the Group and to the Company. The Board has also considered all relevant matters where appropriate. To the extent necessary for an understanding of the development, performance and position of the entity, the Board have considered that they have acted in the way they consider would be most likely to promote the success of the Company for the benefit of all its stakeholders whilst taking into account the impact of business decisions on the stakeholders. Positive communication and engagement with key stakeholder groups such as but not limited to employees, customers, and suppliers is of paramount importance for the success of the Company and is carefully considered within the implementation of the Company’s strategy. In addition, an explanation of how the Group Board has considered the matters set out in s172 (for the Group and for the Company) is set out in the Group’s annual report, which does not form part of this report.
On behalf of the board
The directors present their annual report and financial statements for the period ended 31 December 2023.
The results for the period are set out on page 9.
No ordinary dividends were paid. The directors do not recommend payment of a final dividend.
No preference dividends were paid. The directors do not recommend payment of a final dividend.
The directors who held office during the period and up to the date of signature of the financial statements were as follows:
Rickard Luckin Limited 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.
We have audited the financial statements of H H B Communications Holdings Limited (the 'company') for the period ended 31 December 2023 which comprise the income statement, the statement of financial position, 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 101 Reduced Disclosure Framework (United Kingdom Generally Accepted Accounting Practice).
Basis for 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.
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 period 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.
The extent to which our procedures are capable of detecting irregularities, including fraud, is detailed below.
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 extent to which our procedures are capable of detecting irregularities, including fraud, is detailed below.
We identified areas of laws and regulations that could reasonably be expected to have a material effect on the financial statements from our: general commercial and sector experience; through verbal and written communications with those charged with governance and other management; and via inspection of the company’s regulatory and legal correspondence.
We discussed with those charged with governance and other management the policies and procedures regarding compliance with laws and regulations.
We communicated identified laws and regulations to our team and remained alert to any indicators of non-compliance throughout the audit, we also specifically considered where and how fraud may occur within the company.
The potential effect of these laws and regulations on the financial statements varies considerably.
Firstly, the company is subject to laws and regulations that directly affect the financial statements, including: the company’s constitution, relevant financial reporting standards; company law; tax legislation and distributable profits legislation and we assess the extent of compliance with these laws and regulations as part of our procedures on the related financial statement items.
Secondly the company is subject to many other laws and regulations where the consequences of non-compliance could have a material effect on the amounts or disclosures in the financial statements, for instance through the imposition of fines and penalties, or through losses arising from litigations. We identified the following areas as those most likely to have such an affect: data protection legislation; anti-bribery and anti-corruption legislation.
ISAs (UK) limit the required procedures to identify non-compliance with these laws and regulations and no procedures over and above those already noted are required. These limited procedures did not identify any actual or suspected non-compliance with laws and regulations that could have a material impact on the financial statements.
In relation to fraud, we performed the following specific procedures in addition to those already noted:
Challenging assumptions made by management in its significant accounting estimates;
Identifying and testing journal entries, in particular any entries posted with unusual nominal ledger account combinations, or large and unusual journal entries;
Performing analytical procedures to identify unexpected movements in account balances which may be indicative of fraud;
Ensuring that testing undertaken on both the performance statement, and the balance sheet includes a number of items selected on a random basis; and
Discussions with management.
These procedures did not identify any actual or suspected fraudulent irregularity that could have a material impact on the financial statements.
Owing to the inherent limitations of an audit, there is an unavoidable risk that we may not have detected some material misstatements in the financial statements, even though we have properly planned and performed our audit in accordance with ISAs (UK). For example, the further removed non-compliance with laws and regulations is from the events and transactions reflected in the financial statements, the less likely the procedures that we are required to undertake would identify it. In addition, as with any audit, there remains a high risk of non-detection of irregularities, as these might involve collusion, forgery, intentional omissions, misrepresentation, or the override of internal controls. We are not responsible for preventing non-compliance with laws and regulations or fraud, and cannot be expected to detect non-compliance with all laws and regulations or every incidence of fraud.
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 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.
H H B Communications Holdings Limited is a private company limited by shares incorporated in England and Wales. The registered office is Vinces Road, Diss, Norfolk, IP22 4YT. The company's principal activities and nature of its operations are disclosed in the directors' report.
The financial statements are presented for an 13 month period to bring the period end date in line with its new parent company, Midwich Limited and the Midwich Group.
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 £.
As permitted by FRS 101, the company has taken advantage of the following disclosure exemptions from the requirements of IFRS:
inclusion of an explicit and unreserved statement of compliance with IFRS;
the requirements of IAS 7 Statement of Cash Flows;
disclosure of the objectives, policies and processes for managing capital;
disclosure of the categories of financial instrument and the nature and extent of risks arising on these financial instruments;
the requirements of IFRS 7 Financial Instruments: Disclosures;
disclosure of the future impact of new International Financial Reporting Standards in issue but not yet effective at the reporting date;
the requirements of paragraphs 30 and 31 of IAS 8 Accounting Policies, Changes in Accounting Estimates and Errors;
the requirements of paragraph 17 of IAS 24 Related Party Disclosures; and
the requirements in IAS 24 Related Party Disclosures to disclose related party transactions entered into between two or more members of the group, provided that any subsidiary which is a party to the transaction is wholly owned by such a member.
Where required, equivalent disclosures are given in the group accounts of Midwich Group plc. The group accounts of Midwich Group plc are available to the public and can be obtained as set out in note 13.
The company has taken advantage of the exemption under section 400 of the Companies Act 2006 not to prepare consolidated accounts. The financial statements present information about the company as an individual entity and not about its group.
H H B Communications Holdings Limited is a wholly owned subsidiary of Midwich Limited and the results of H H B Communications Holdings Limited are included in the consolidated financial statements of Midwich Group Plc which are available from Vinces Road, Diss, Norfolk. IP22 4YT.
Interests in subsidiaries, associates and jointly controlled entities are initially measured at cost and subsequently measured at cost less any accumulated impairment losses. The investments are assessed for impairment at each reporting date and any impairment losses or reversals of impairment losses are recognised immediately in profit or loss.
A subsidiary is an entity controlled by the company. Control is the power to govern the financial and operating policies of the entity so as to obtain benefits from its activities.
Debt instruments are classified as financial assets measured at fair value through other comprehensive income where the financial assets are held within the company’s business model whose objective is achieved by both collecting contractual cash flows and selling financial assets, and the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.
A debt instrument measured at fair value through other comprehensive income is recognised initially at fair value plus transaction costs directly attributable to the asset. After initial recognition, each asset is measured at fair value, with changes in fair value included in other comprehensive income. Accumulated gains or losses recognised through other comprehensive income are directly transferred to profit or loss when the debt instrument is derecognised.
Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire, or when it transfers the financial asset and substantially all the risks and rewards of ownership to another entity.
The company recognises financial debt when the company becomes a party to the contractual provisions of the instruments. Financial liabilities are classified as either 'financial liabilities at fair value through profit or loss' or 'other financial liabilities'.
Other financial liabilities, including borrowings, trade payables and other short-term monetary liabilities, are initially measured at fair value net of transaction costs directly attributable to the issuance of the financial liability. They are subsequently measured at amortised cost using the effective interest method. For the purposes of each financial liability, interest expense includes initial transaction costs and any premium payable on redemption, as well as any interest or coupon payable while the liability is outstanding.
Financial liabilities are derecognised when, and only when, the company’s obligations are discharged, cancelled, or they expire.
Equity instruments issued by the company are recorded at the proceeds received, net of direct issue costs. Dividends payable on equity instruments are recognised as liabilities once they are no longer at the discretion of the company.
The tax expense represents the sum of the tax currently payable and deferred tax.
Exceptional items
Income and expenses classified as exceptional are shown separately on the face of the profit and loss account. Income and expenses are treated as exceptional in nature if they are significant one off income and expenses and are not expected to reoccur.
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, if the revision affects only that period, or in the period of the revision and future periods if the revision affects both current and future periods.
It is the opinion of the directors that there are no significant judgements or estimates within these financial statements.
As set out in note 7, a subsidiary was distributed up to this company via a dividend in specie at its fair value. Therefore the cost of investments in group companies was impaired back down to the fair value of the group at that date.
There were three directors and no employees for the period.
As set out in note 7, Old Oak Common Holdings Limited distributed its wholly owned subsidiary to this company via a dividend in specie at its fair value.
The charge for the period can be reconciled to the loss per the income statement as follows:
Except as detailed below the directors believe that the carrying amounts of financial assets carried at amortised cost in the financial statements approximate to their fair values.
During the period, the company acquired Old Oak Common Holdings Limited in a share for share exchange for the issue of 29,649,999 ordinary shares of £1 each.
Following the acquisition of Old Oak Common Holdings Limited, this subsidiary distributed via a dividend in specie, its wholly owned subsidiary, HHB Communications Limited to this company at a fair value of £24,000,000. The investment in the group was then impaired back to its original acquisition value by this amount.
Subsequently, Old Oak Common Holdings Limited was demerged from the group via a cancellation of the B ordinary shares of £5,650,000.
HSBC Corporate Trustee Company (UK) Limited has a fixed and floating charge over all the property or undertaking of the company.
Details of the company's subsidiaries at 31 December 2023 are as follows:
As set out in note 7, 29,649,999 ordinary shares were issued in a share for share exchange for the acquisition of Old Oak Common Holdings Limited.
The share capital of the company was redesignated as 24,000,000 ordinary A shares of £1 each and 5,650,000 ordinary B shares of £1 each.
5,650,000 ordinary B shares of £1 each were cancelled. These shares were cancelled as par of a demerger of Old Oak Common Holdings Limited from the company.
The 24,000,000 ordinary A shares of £1 each were subsequently reclassified as ordinary shares.
The company has taken the exemption as permitted FRS 101 to take advantage of not disclosing related party transactions entered into between two or more members of the group.
As at 31 December 2023, the company owed a subsidiary company £148,250.