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Registered number: 01265975









HEPCO SLIDE SYSTEMS LIMITED









ANNUAL REPORT AND FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2023

 
HEPCO SLIDE SYSTEMS LIMITED
 
 
COMPANY INFORMATION


Directors
G L Forster 
P J Fanshawe 
B R T Engstrom 
G P Forster 
C G Reed 
A Mend 




Company secretary
G L Forster



Registered number
01265975



Registered office
124 Finchley Road

London

NW3 5JS




Independent auditors
Nyman Libson Paul LLP
Chartered Accountants & Statutory Auditors

124 Finchley Road

London

NW3 5JS




Bankers
Barclays Bank plc
53 The Broadway

Ealing

London

W5 5JS





 
HEPCO SLIDE SYSTEMS LIMITED
 

CONTENTS



Page
Strategic report
 
1 - 2
Directors' report
 
3 - 5
Independent auditors' report
 
6 - 10
Statement of income and retained earnings
 
11
Statement of financial position
 
12
Notes to the financial statements
 
13 - 30


 
HEPCO SLIDE SYSTEMS LIMITED
 
 
STRATEGIC REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023

Introduction
 
The principal activities of the company are the manufacture and distribution of machine elements destined for machine builders, factories and end-users.  These include precision linear bearings, linear modules, rotary and track motion guides, rack and pinion drives, screw jacks, ball screws, pneumatic components, lifting jacks, aluminium machine frames, and systems including these elements. The company operates in the UK and also through branches in mainland Europe and Asia.
The company also has an investment business, involving land and property, and listed investment portfolios which are actively managed. 

Business review
 
During the year turnover has increased moderately compared with 2022. The company continued to capitalise on the high quality of its products which have historically increased the company's domestic and international market penetration. Additionally, the company has continued to invest heavily in machinery.
During the year, the company has continued expanding its operations in the Netherlands through trading from its European hub. This has led to the dual benefits of signficiantly alleviating the difficulties encountered following Brexit and getting goods to customers in a timely and cost efficient manner. The company has delivered more manufactured products direct to EU based customers from this facility in 2023 in order to shorten the lead times on certain product lines.

Principal risks and uncertainties
 
The company faces competitive pressure from rival manufacturers and distributors but continues to invest in machinery,  marketing and research and development to ensure that it’s market share is maintained.

Key performance indicators
 
Key financial performance indicators for the company are as follows:

2023
2022
Gross profit margin (%)



42.2
 
42.6
 
Wages to turnover ratio



0.38
 
0.36
 

Other key performance indicators for the company are as follows:

2023
2022
Training awards



2
 
3
 
Apprentices



16
 
10
 
Employee turnover (%)



16.2
 
12.8
 

Page 1

 
HEPCO SLIDE SYSTEMS LIMITED
 

STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023

Directors' statement of compliance with duty to promote the success of the company
 
Section 172 of the Companies Act 2006 requires a director of a company to act in the way he or she considers, in good faith, would most likely promote the success of the company for the benefit of its members as a whole. In doing this, section 172 requires a director to have regard, amongst other matters, to the: 
• likely consequences of any decisions in the long-term; 
• interests of the company’s employees; 
• need to foster the company’s business relationships with suppliers, customers and others; 
• impact of the company’s operations on the community and environment; 
• desirability of the company maintaining a reputation for high standards of business conduct; and 
• need to act fairly as between members of the company. 
In discharging our section 172 duties we have regard to the factors set out above.  In concluding our decisions due regard is given to what is in the long term company interest, while bearing in mind other stakeholders, for example employees, the environment, customers, to ensure a rounded view.  While we acknowledge that every decision we make will not necessarily result in a positive outcome for all of our stakeholders, by considering the company’s mission statement, strategic aims and core values and having a process in place for decision-making, we do, however, aim to make sure that our decisions are consistent. 
During the period the company received information to help it understand the interests and views of the company’s key stakeholders and other relevant factors when making decisions.  This was disseminated in a in a wide variety of ways and covered financial and operational performance, non-financial KPIs, risk, environmental, social and outcomes of specific pieces of engagement. As a result of this, the company has had an overview of engagement with stakeholders and other relevant factors which allows it to understand the nature of the stakeholders’ concerns and to comply with its section 172 duty to promote the success of the company. 


This report was approved by the board on 2 September 2024 and signed on its behalf.





P J Fanshawe
Director

C G Reed
Director

Page 2

 
HEPCO SLIDE SYSTEMS LIMITED
 
 
 
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023

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

Directors' responsibilities statement

The directors are responsible for preparing the strategic report, the directors' 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 applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice), including Financial Reporting Standard 102 ‘The Financial Reporting Standard applicable in the UK and Republic of Ireland'. 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 for the company's financial statements and then apply them consistently;

make judgments and accounting estimates that are reasonable and prudent;

state whether applicable UK Accounting Standards have been followed, subject to any material departures disclosed and explained in the financial statements;

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 to enable them to ensure that the financial statements comply with the Companies Act 2006They 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.

Results and dividends

The profit for the year, after taxation, amounted to £2,625,013 (2022 - £2,238,529).

The directors do not propose a final dividend.

Directors

The directors who served during the year were:

G L Forster 
P J Fanshawe 
B R T Engstrom 
G P Forster 
C G Reed 
A Mend 

Future developments

The directors are confident with the business proposition and place in the market. The company continues to invest heavily in plant and machinery and in its overseas operations.

Page 3

 
HEPCO SLIDE SYSTEMS LIMITED
 
 
 
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023

Financial instruments

The principal financial instruments of the company comprise cash at bank and various other items such as trade debtors and creditors. The main purpose of these instruments is to fund the company's operations. Trade debtors are managed in respect of both credit and cash flow risk by policies concerning the credit offered to customers and the regular monitoring of amounts for both time and credit limits. Trade creditors liquidity risk is managed by ensuring sufficient funds are available to meet amounts due.

Engagement with employees

The company's policy is to consult and discuss with employees, through team briefings and at meetings, matters likely to affect employees' interests.
Information of matters of concern to employees is given through information bulletins and reports which seek to achieve a common awareness on the part of all employees of the financial and economic factors affecting the group's performance.

Engagement with suppliers, customers and others

The company works very closely with its customers to service their requirements in a collaborative way and fostering long term relationships. Likewise key suppliers are worked with to enable the business to achieve excellence in its execution of its business model. The company looks to keep interested parties informed of its key activities and works with local authorities and trade bodies to promote this.

Disabled employees

The company's policy is to recruit disabled workers for those vacancies that they are able to fill. All necessary assistance with initial training courses is given. Once employed, a career plan is developed so as to ensure suitable opportunities for each disabled person. Arrangements are made, wherever possible, for retraining employees who become disabled, to enable them to perform work identified as appropriate to their aptitudes and abilities.

Qualifying third party indemnity provisions

The company on behalf of the group maintains liability insurance for its directors and officers against liabilities which directors or officers may incur personally as a consequence of claims made against them alleging breach of duty or unlawful acts of or ommissions in their capacity as a director or officer.

Disclosure of information to auditors

Each of the persons who are directors at the time when this directors' report is approved has confirmed that:
 
so far as the director is aware, there is no relevant audit information of which the company's auditors are unaware, and

the director has taken all the steps that ought to have been taken as a director in order to be aware of any relevant audit information and to establish that the company's auditors are aware of that information.

Post balance sheet events

Subsequent to the reporting date, the company has completed its acquisition of additional land in April 2024 to expand operations at its Tiverton site.

Page 4

 
HEPCO SLIDE SYSTEMS LIMITED
 
 
 
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023

Auditors

The auditorsNyman Libson Paul LLPwill be proposed for reappointment in accordance with section 485 of the Companies Act 2006.

This report was approved by the board on 2 September 2024 and signed on its behalf.
 





P J Fanshawe
Director
C G Reed
Director

Page 5

 
HEPCO SLIDE SYSTEMS LIMITED
 
 
 
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF HEPCO SLIDE SYSTEMS LIMITED
 

Opinion


We have audited the financial statements of Hepco Slide Systems Limited (the 'company') for the year ended 31 December 2023, which comprise the statement of income and retained earnings, the statement of financial position and the related notes, including a summary of significant accounting policiesThe 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 December 2023 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.


Basis for opinion


We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditors' responsibilities for the audit of the financial statements section of our report. We are independent of the company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the United Kingdom, including the Financial Reporting Council'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.


Page 6

 
HEPCO SLIDE SYSTEMS LIMITED
 
 
 
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF HEPCO SLIDE SYSTEMS LIMITED (CONTINUED)


Other information


The other information comprises the information included in the Annual Report other than the financial statements and our auditors' report thereon. The directors are responsible for the other information contained within the Annual ReportOur 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.


Opinion on other matters prescribed by the Companies Act 2006
 

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


the information given in the 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 directors' remuneration specified by law are not made; or
we have not received all the information and explanations we require for our audit.


Responsibilities of directors
 

As explained more fully in the directors' responsibilities statement set out on page 3, 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.


Page 7

 
HEPCO SLIDE SYSTEMS LIMITED
 
 
 
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF HEPCO SLIDE SYSTEMS LIMITED (CONTINUED)


Auditors' responsibilities for the audit of the financial statements
 

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditors' 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 extent to which our procedures are capable of detecting irregularities, including fraud is detailed below:

In identifying and assessing risks of material misstatement in respect of irregularities, including fraud and non-compliance with laws and regulations, we considered the following:
• the nature of the industry and sector, control environment and business performance;
• results of our enquiries of management about their own identification and assessment of the risks of irregularities;
• any matters we identified having obtained and reviewed the Company’s documentation of their policies and procedures relating to:
- identifying, evaluating and complying with laws and regulations and whether they were aware of any instances of non-compliance;
- detecting and responding to the risks of fraud and whether they have knowledge of any actual, suspected or alleged fraud;
- the internal controls established to mitigate risks of fraud or non-compliance with laws and regulations;
- the matters discussed among the audit engagement team regarding how and where fraud might occur in the financial statements and any potential indicators of fraud.
As a result of these procedures, we considered the opportunities and incentives that may exist within the organisation for fraud and identified the greatest potential for fraud in relation to timing of revenue recognition. In common with all audits under ISAs (UK), we are also required to perform specific procedures to respond to the risk of management override.
We also obtained an understanding of the legal and regulatory frameworks that the Company operates in, focusing on provisions of those laws and regulations that had a direct effect on the determination of material amounts and disclosures in the financial statements. The key laws and regulations we considered in this context included the UK Companies Act and local tax legislation.
In addition, we considered other laws and regulations that could have an effect on the company and result in the imposition of financial or other penalties and litigation. Auditing standards limit the required audit procedures to identify non-compliance with these laws and regulations to enquiry of the directors and other management and inspection of regulatory and legal correspondence, if any. These limited procedures did not identify actual or suspected non-compliance.
All matters in relation to non-compliance with laws and regulations and potential fraud risks were communicated to all members of the engagement team and we remained alert to any indications of non-compliance throughout the audit.

 
Page 8

 
HEPCO SLIDE SYSTEMS LIMITED
 
 
 
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF HEPCO SLIDE SYSTEMS LIMITED (CONTINUED)


Our procedures to respond to risks identified included the following:
• reviewing the financial statement disclosures and testing to supporting documentation to assess compliance with provisions of relevant laws and regulations described as having a direct effect on the financial statements;
• enquiring of management concerning actual and potential litigation and claims;
• assessing the appropriateness and where appropriate with third parties concerning actual and potential litigation and claims;
• performing analytical procedures to identify any unusual or unexpected relationships that may indicate risks of material misstatement due to fraud;
• reading minutes of meetings of those charged with governance and correspondence with HMRC;
• in addressing the risk of fraud through management override of controls, reviewing the appropriateness of journal entries and other adjustments; assessing whether the judgements made in making accounting estimates are indicative of a potential bias; and evaluating the business rationale of any significant transactions that are unusual or outside the normal course of business.
We are not responsible for preventing non-compliance and cannot be expected to detect non-compliance with all laws and regulations.


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 for the audit of the financial statements is located on the Financial Reporting Council's website at: www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditors' report.


Page 9

 
HEPCO SLIDE SYSTEMS LIMITED
 
 
 
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF HEPCO SLIDE SYSTEMS LIMITED (CONTINUED)


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 2006Our 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 auditors' 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.





Paul Decker (senior statutory auditor)
  
for and on behalf of
Nyman Libson Paul LLP
 
Chartered Accountants
Statutory Auditors
  
124 Finchley Road
London
NW3 5JS

4 September 2024
Page 10

 
HEPCO SLIDE SYSTEMS LIMITED
 
 
STATEMENT OF INCOME AND RETAINED EARNINGS
FOR THE YEAR ENDED 31 DECEMBER 2023

2023
2022
Note
£
£

  

Turnover
 4 
46,508,688
45,598,032

Cost of sales
  
(26,904,248)
(26,166,834)

Gross profit
  
19,604,440
19,431,198

Distribution costs
  
(13,160,880)
(11,842,458)

Administrative expenses
  
(4,628,049)
(3,940,660)

Other operating income
 5 
194,492
176,878

Exceptional other operating charges
  
(34,278)
(124,319)

Operating profit
 6 
1,975,725
3,700,639

Fair value movements
  
126,910
63,455

Income from investments
 10 
121,681
-

Profit/(loss) on disposal of investments
  
37,824
-

Unrealised gains/(losses) on investments
  
452,624
(743,319)

Interest receivable and similar income
 11 
433,388
109,221

Interest payable and similar expenses
 12 
(64,416)
(37,537)

Profit before tax
  
3,083,736
3,092,459

Tax on profit
 13 
(458,723)
(853,930)

Profit after tax
  
2,625,013
2,238,529

  

  

Retained earnings at the beginning of the year
  
50,058,509
47,819,980

Profit for the year
  
2,625,013
2,238,529

Retained earnings at the end of the year
  
52,683,522
50,058,509
The notes on pages 13 to 30 form part of these financial statements.

Page 11

 
HEPCO SLIDE SYSTEMS LIMITED
REGISTERED NUMBER: 01265975

STATEMENT OF FINANCIAL POSITION
AS AT 31 DECEMBER 2023

2023
2022
Note
£
£

Fixed assets
  

Tangible assets
 15 
12,722,045
13,669,253

Investment property
 16 
1,903,650
1,776,740

  
14,625,695
15,445,993

Current assets
  

Stocks
 17 
16,277,232
13,056,108

Debtors: amounts falling due within one year
 18 
7,070,801
9,168,863

Current asset investments
 19 
9,818,369
9,140,843

Cash at bank and in hand
 20 
14,835,568
10,802,312

  
48,001,970
42,168,126

Creditors: amounts falling due within one year
 21 
(8,246,320)
(6,299,015)

Net current assets
  
 
 
39,755,650
 
 
35,869,111

Total assets less current liabilities
  
54,381,345
51,315,104

Provisions for liabilities
  

Deferred tax
 22 
(1,497,823)
(1,056,595)

  
 
 
(1,497,823)
 
 
(1,056,595)

Net assets
  
52,883,522
50,258,509


Capital and reserves
  

Called up share capital 
 23 
200,000
200,000

Profit and loss account
 24 
52,683,522
50,058,509

  
52,883,522
50,258,509


The financial statements were approved and authorised for issue by the board and were signed on its behalf on 2 September 2024.




P J Fanshawe
C G Reed
Director
Director

The notes on pages 13 to 30 form part of these financial statements.

Page 12

 
HEPCO SLIDE SYSTEMS LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

1.


General information

Hepco Slide Systems Limited ('the company') is a private company limited by shares and is incorporated and domiciled in England. The adress of its registered office is 124 Finchley Road, London, NW3 5JS. The address of its principal place of business is Lower Moor Business Park, Tiverton Way, Tiverton, Devon, EX16 6TG. 
The principal activities of the company are the manufacture and distribution of machine elements destined for machine builders, factories and end-users.  These include precision linear bearings, linear modules, rotary and track motion guides, rack and pinion drives, screw jacks, ball screws, pneumatic components, lifting jacks, aluminium machine frames, and systems including these elements. The company operates in the UK and also through branches in mainland Europe and Asia.

2.Accounting policies

 
2.1

Basis of preparation of financial statements

The financial statements have been prepared under the historical cost convention unless otherwise specified within these accounting policies and in accordance with Financial Reporting Standard 102, the Financial Reporting Standard applicable in the UK and the Republic of Ireland and the Companies Act 2006.

The preparation of financial statements in compliance with FRS 102 requires the use of certain critical accounting estimates. It also requires management to exercise judgment in applying the company's accounting policies (see note 3).

The following principal accounting policies have been applied:

 
2.2

Financial Reporting Standard 102 - reduced disclosure exemptions

The company has taken advantage of the following disclosure exemptions in preparing these financial statements, as permitted by the FRS 102 "The Financial Reporting Standard applicable in the UK and Republic of Ireland":
the requirements of Section 7 Statement of Cash Flows;
the requirements of Section 3 Financial Statement Presentation paragraph 3.17(d);
the requirements of Section 11 Financial Instruments paragraphs 11.42, 11.44 to 11.45, 11.47, 11.48(a)(iii), 11.48(a)(iv), 11.48(b) and 11.48(c);
the requirements of Section 12 Other Financial Instruments paragraphs 12.26 to 12.27, 12.29(a), 12.29(b) and 12.29A;
the requirements of Section 33 Related Party Disclosures paragraph 33.7.

This information is included in the consolidated financial statements of the company's ultimate parent undertaking, as disclosed in note 31 to these financial statements, as at 31 December 2023 and these financial statements may be obtained from the UK Companies House website: https://find-and-update .company-information .service.gov.uk/.

Page 13

 
HEPCO SLIDE SYSTEMS LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

2.Accounting policies (continued)

 
2.3

Foreign currency translation

Functional and presentation currency

The company's functional and presentational currency is GBP.

Transactions and balances

Foreign currency transactions are translated into the functional currency using the spot exchange rates at the dates of the transactions.

At each period end foreign currency monetary items are translated using the closing rate. Non-monetary items measured at historical cost are translated using the exchange rate at the date of the transaction and non-monetary items measured at fair value are measured using the exchange rate when fair value was determined.

Foreign  exchange  gains  and  losses  resulting  from  the  settlement  of  transactions  and  from  the translation  at  period-end exchange rates  of monetary assets and liabilities denominated in foreign currencies are recognised through profit or loss.

 
2.4

Revenue

Turnover comprises net invoiced sales of manufactured automated systems and other related products.
Revenue is recognised at the point of dispatch when it is probable that the economic benefits will flow to the company and the revenue can be reliably measured. Revenue is measured as the fair value of the consideration received or receivable, excluding discounts, rebates, value added tax and other sales taxes.
 
 
2.5

Operating leases: the company as lessee

Leases that do not transfer all of the risks and rewards of ownership are classified as operating leases. Payments under operating leases are charged to profit or loss on a straight-line basis over the period of the lease.

 
2.6

Research and development

In the research phase of an internal project it is not possible to demonstrate that the project will generate future economic benefits and hence all expenditure on research shall be recognised as an expense when it is incurred. Intangible assets are recognised from the development phase of a project if and only if certain specific criteria are met in order to demonstrate the asset will generate probable future economic benefits and that its cost can be reliably measured.
If it is not possible to distinguish between the research phase and the development phase of an internal project, the expenditure is treated as if it were all incurred in the research phase only.

 
2.7

Interest income

Interest income is recognised in profit or loss using the effective interest method.

Page 14

 
HEPCO SLIDE SYSTEMS LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

2.Accounting policies (continued)

 
2.8

Finance costs

Finance costs are charged through profit or loss over the term of the debt using the effective interest method so that the amount charged is at a constant rate on the carrying amount.

 
2.9

Pensions

Defined contribution pension plan

The company operates a defined contribution plan for its employees. A defined contribution plan is a pension plan under which the company pays fixed contributions into a separate entity. Once the contributions have been paid the company has no further payment obligations.

The contributions are recognised as an expense in profit or loss when they fall due. Amounts not paid are shown in accruals as a liability in the statement of financial position. The assets of the plan are held separately from the company in independently administered funds.

 
2.10

Current and deferred taxation

The tax expense for the year comprises current and deferred tax. Tax is recognised through profit or loss.
The current income tax charge is calculated on the basis of tax rates and laws that have been enacted or substantively enacted by the reporting date in the countries where the Company operates and generates income.
Deferred tax balances are recognised in respect of all timing differences that have originated but not reversed by the statement of financial position date, except that:
- The recognition of deferred tax assets is limited to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits.
- Any deferred tax balances are reversed if and when all conditions for retaining associated tax allowances have been met.
Deferred tax balances are not recognised in respect of permanent differences. Deferred tax is determined using tax rates and laws that have been enacted or substantively enacted by the reporting date.

 
2.11

Exceptional items

Exceptional items are transactions that fall within the ordinary activities of the company but are presented separately due to their size or incidence.

Page 15

 
HEPCO SLIDE SYSTEMS LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

2.Accounting policies (continued)

 
2.12

Tangible fixed assets

Tangible fixed assets under the cost model are stated at historical cost less accumulated depreciation and any accumulated impairment losses. Historical cost includes expenditure that is directly attributable to bringing the asset to the location and condition necessary for it to be capable of operating in the manner intended by management.

Investment property rented to other group entities and accounted for under the cost model is stated at historical cost less accumulated depreciation and any accumulated impairment losses.

The company adds to the carrying amount of an item of fixed assets the cost of replacing part of such an item when that cost is incurred, if the replacement part is expected to provide incremental future benefits to the company. The carrying amount of the replaced part is derecognised. Repairs and maintenance are charged to profit or loss during the period in which they are incurred.

Land is not depreciated. Depreciation on other assets is charged so as to allocate the cost of assets less their residual value over their estimated useful lives, using the straight-line method.

The estimated useful lives range as follows:

Freehold buildings
-
over 20 to 50 years
Plant and machinery
-
over 2 to 20 years
Motor vehicles
-
over 5 to 10 years
Fixtures, fittings & equipment
-
over 2 to 20 years

The assets' residual values, useful lives and depreciation methods are reviewed, and adjusted prospectively if appropriate, or if there is an indication of a significant change since the last reporting date.

Gains and losses on disposals are determined by comparing the proceeds with the carrying amount and are recognised in profit or loss.

 
2.13

Investment property

Investment property is carried at fair value determined annually and derived from the current market rents and investment property yields for comparable real estate, adjusted if necessary for any difference in the nature, location or condition of the specific asset. No depreciation is provided. Changes in fair value are recognised in profit or loss.

 
2.14

Valuation of investments

Investments in listed company shares are remeasured to market value at each reporting date. Gains and losses on remeasurement are recognised in profit or loss for the period.

Page 16

 
HEPCO SLIDE SYSTEMS LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

2.Accounting policies (continued)

 
2.15

Stocks

Stocks are stated at the lower of cost and net realisable value, being the estimated selling price less costs to complete and sell. Cost is based on the cost of purchase on a first in, first out basis. Work in progress and finished goods include labour and attributable overheads.

At each reporting date, stocks are assessed for impairment. If stock is impaired, the carrying amount is reduced to its selling price less costs to complete and sell. The impairment loss is recognised immediately in profit or loss.

 
2.16

Debtors

Short term debtors are measured at transaction price, less any impairment.

 
2.17

Cash and cash equivalents

Cash is represented by cash in hand and deposits with financial institutions repayable without penalty on notice of not more than 24 hours. Cash equivalents are highly liquid investments that mature in no more than three months from the date of acquisition and that are readily convertible to known amounts of cash with insignificant risk of change in value.

 
2.18

Creditors

Short-term creditors are measured at the transaction price. Other financial liabilities, including bank loans, are measured initially at fair value, net of transaction costs, and are measured subsequently at amortised cost using the effective interest method.

Page 17

 
HEPCO SLIDE SYSTEMS LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

2.Accounting policies (continued)

 
2.19

Financial instruments

The company has elected to apply the provisions of Section 11 “Basic Financial Instruments” of FRS 102 to all of its financial instruments.

Financial instruments are recognised in the company's statement of financial position when the company becomes party to the contractual provisions of the instrument.

Basic financial assets

Basic financial assets, which include trade and other receivables, cash and bank balances, are initially measured at their transaction price including transaction costs and are subsequently carried at their amortised cost using the effective interest method, less any provision for impairment, 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.

Discounting is omitted where the effect of discounting is immaterial. The company's cash and cash equivalents, trade and most other receivables due with the operating cycle fall into this category of financial instruments.

Financial liabilities

Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instruments any contract that evidences a residual interest in the assets of the company after the deduction of all its liabilities.

Basic financial liabilities, which include trade and other payables, bank loans and other loans are initially measured at their transaction price after transaction costs. When this constitutes a financing transaction, whereby the debt instrument is measured at the present value of the future receipts discounted at a market rate of interest. Discounting is omitted where the effect of discounting is immaterial.

Debt instruments are subsequently carried at their amortised cost using the effective interest rate method.

Trade payables are obligations to pay for goods and services that have been acquired in the ordinary course of business from suppliers. Trade payables are classified as current liabilities if the payment is due within one year. If not, they represent non-current liabilities. Trade payables are initially recognised at their transaction price and subsequently are measured at amortised cost using the effective interest method. Discounting is omitted where the effect of discounting is immaterial.

Page 18

 
HEPCO SLIDE SYSTEMS LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

3.


Judgments in applying accounting policies and key sources of estimation uncertainty

The preparation of the financial statements requires management to make judgments, estimates and assumptions that affect the amounts reported for assets and liabilities as at the reporting date and the amounts reported for revenues and expenses during the year. It also requires management to exercise judgment in applying the company's accounting policies. As such, the nature of estimation means that actual outcomes could differ from those estimates. The following are the company's key sources of estimation uncertainty:
Investment properties
Investment properties are valued at fair value with changes in fair value being recognised through profit or loss.  The valuation method is based on comparable market data and the determined fair value is sensitive to the estimated yield as well as to vacancy rates.
Tangible assets
Tangible assets are depreciated over their useful lives taking into account residual values where appropriate. The actual lives of assets and residual values are assessed annually and may vary depending on a number of factors. In re-assessing the assets' lives, factors such as technological innovation, product life cycles and maintenance programmes are taken into account.
Stock provisioning
The company manufactures precision engineering components and is subject to changing customer demands.  As a result it is necessary to consider recoverability of the cost of stock and the associated provisioning required.
When calculating any stock provision, management considers the nature and condition of the stock as well as applying assumptions around anticipated saleability of the goods which are subject to market trends and forces.
Impairment of debtors
The company makes an estimate of the recoverable value of trade and other debtors. When assessing impairment, management considers factors including the current credit rating of the debtor, the ageing profile and historical experience.
Current asset investments
Current asset investments are carried at fair value with changes being recognised through profit or loss.  Fair values are based on valuations provided by independent managers which includes market prices and readily available market information for each investment which may refer to market prices for similar investment where there is no active market for the investment held by company.

Page 19

 
HEPCO SLIDE SYSTEMS LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

4.


Turnover

The whole of the turnover is attributable to its principal activities undertaken in the year.

Analysis of turnover by country of destination:

2023
2022
£
£

Sales - United Kingdom
8,062,896
8,581,601

Sales - Europe
29,147,245
26,320,167

Sales - Rest of the world
9,298,547
10,696,264

46,508,688
45,598,032



5.


Other operating income

2023
2022
£
£

Net rents receivable
194,492
176,878

194,492
176,878



6.


Operating profit

The operating profit is stated after charging:

2023
2022
£
£

Research & development charged as an expense
(16,675)
91,432

Exchange differences
181,415
(287,999)

Other operating lease rentals
597,799
501,920


7.


Auditors' remuneration

2023
2022
£
£

Fees payable to the company's auditors and their associates for the audit of the company's financial statements
51,000
40,200

The company has taken advantage of the exemption not to disclose amounts paid for non-audit services as these are disclosed in the consolidated accounts of the parent company.

Page 20

 
HEPCO SLIDE SYSTEMS LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

8.


Employees

Staff costs, including directors' remuneration, were as follows:


2023
2022
£
£

Wages and salaries
16,181,758
14,759,418

Social security costs
1,186,868
1,114,537

Cost of defined contribution scheme
447,506
414,737

17,816,132
16,288,692


The average monthly number of employees, including the directors, during the year was as follows:


        2023
        2022
            No.
            No.







Management
6
5



Administration
34
31



Production
164
167



Sales
101
103



Marketing
8
7



Research and development
8
7

321
320


9.


Directors' remuneration

2023
2022
£
£

Directors' emoluments
3,327,659
2,596,538

Company contributions to defined contribution pension schemes
70,323
71,806

3,397,982
2,668,344


During the year retirement benefits were accruing to 4 directors (2022 - 4) in respect of defined contribution pension schemes.

The highest paid director received remuneration of £2,497,847 (2022 - £1,653,180).

The value of the company's contributions paid to a defined contribution pension scheme in respect of the highest paid director amounted to £NIL (2022 - £NIL).

Page 21

 
HEPCO SLIDE SYSTEMS LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

10.


Income from investments

2023
2022
£
£



Income from current asset investments
121,681
-

121,681
-





11.


Interest receivable

2023
2022
£
£


Other interest receivable
433,388
109,221

433,388
109,221


12.


Interest payable and similar expenses

2023
2022
£
£


Other loan interest payable
64,416
37,493

Other interest payable
-
44

64,416
37,537

Page 22

 
HEPCO SLIDE SYSTEMS LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

13.


Taxation


2023
2022
£
£

Corporation tax


Current tax on profits for the year
193,792
191,518

Adjustments in respect of previous periods
(271,894)
-


(78,102)
191,518


Double taxation relief
-
(43,093)

Group taxation relief
51,002
272,923


(27,100)
421,348

Foreign tax


Foreign tax on income for the year
44,595
126,287

44,595
126,287

Total current tax
17,495
547,635

Deferred tax


Origination and reversal of timing differences
441,228
306,295

Total deferred tax
441,228
306,295


Tax on profit
458,723
853,930
Page 23

 
HEPCO SLIDE SYSTEMS LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
 
13.Taxation (continued)


Factors affecting tax charge for the year

The tax assessed for the year is lower than (2022 - higher than) the standard rate of corporation tax in the UK of 23.5% (2022 - 19%). The differences are explained below:

2023
2022
£
£


Profit on ordinary activities before tax
3,083,736
3,092,459


Profit on ordinary activities multiplied by standard rate of corporation tax in the UK of 23.5% (2022 - 19%)
724,678
587,567

Effects of:


Expenses not deductible for tax purposes
10,562
6,089

Capital allowances for year in excess of depreciation
29,839
8,420

Higher rate taxes on overseas earnings
34,106
-

Adjustments to tax charge in respect of prior periods
(271,894)
-

Other timing differences leading to an increase in taxation
634
-

Non-taxable income
(76,337)
145,039

Capital gains/(losses)
(927)
-

Changes in provisions leading to an increase in the tax charge
8,062
23,621

Unrelieved foreign tax carried forward
-
83,194

Group relief
(51,002)
(272,923)

Compensation for group relief
51,002
272,923

Total tax charge for the year
458,723
853,930


Factors that may affect future tax charges

There were no factors that may affect future tax charges.


14.


Exceptional items

2023
2022
£
£


Impairment of intragroup loan
34,278
124,319

34,278
124,319

At the reporting date, the company impaired a loan to a fellow subsidiary. The directors consider that while the debt is recoverable in the long term, the loan should be shown to the extent of recoverability at the reporting date. 
Page 24

 
HEPCO SLIDE SYSTEMS LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

15.


Tangible fixed assets





Land and buildings
Plant and machinery
Motor vehicles
Fixtures and fittings
Total

£
£
£
£
£



Cost or valuation


At 1 January 2023
11,216,772
9,738,621
110,307
1,230,415
22,296,115


Additions
430,154
1,770,026
-
56,665
2,256,845


Disposals
(2,210,655)
(345,722)
-
-
(2,556,377)



At 31 December 2023

9,436,271
11,162,925
110,307
1,287,080
21,996,583



Depreciation


At 1 January 2023
2,308,607
5,222,690
64,086
1,031,479
8,626,862


Charge for the year on owned assets
148,860
756,201
8,686
69,356
983,103


Disposals
-
(335,427)
-
-
(335,427)



At 31 December 2023

2,457,467
5,643,464
72,772
1,100,835
9,274,538



Net book value



At 31 December 2023
6,978,804
5,519,461
37,535
186,245
12,722,045



At 31 December 2022
8,908,165
4,515,931
46,221
198,936
13,669,253

At 31 December 2023, included within the net book value of land and buildings is £6,978,804 (2022: £8,908,165) relating to freehold land and buildings.
The carrying amount of investment property which the company rents to another group entity when it has chosen to account for such properties using the cost model is £855,131 (2022: £876,197).

Page 25

 
HEPCO SLIDE SYSTEMS LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

16.


Investment property


Freehold investment property

£



Valuation


At 1 January 2023
1,776,740


Surplus on revaluation
126,910



At 31 December 2023
1,903,650





17.


Stocks

2023
2022
£
£

Raw materials
3,092,497
2,848,966

Work in progress
2,325,205
2,165,968

Finished goods and goods for resale
10,859,530
8,041,174

16,277,232
13,056,108


The carrying value of stocks are stated net of impairment losses due to slow-moving and obsolete stock totalling £3,086,675 (2022 - £2,843,536). Impairment losses totalling £243,139 (2022 - £433,145) were recognised in profit and loss.

Page 26

 
HEPCO SLIDE SYSTEMS LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

18.


Debtors

2023
2022
£
£


Trade debtors
5,530,677
7,964,004

Amounts owed by group undertakings
120,174
146,259

Other debtors
1,041,515
723,369

Prepayments and accrued income
378,435
335,231

7,070,801
9,168,863



19.


Current asset investments

2023
2022
£
£

Listed investments
9,818,369
9,140,843

9,818,369
9,140,843



20.


Cash and cash equivalents

2023
2022
£
£

Cash at bank and in hand
14,835,568
10,802,312

14,835,568
10,802,312



21.


Creditors: Amounts falling due within one year

2023
2022
£
£

Trade creditors
1,579,151
2,394,717

Amounts owed to group undertakings
459,361
348,535

Corporation tax
-
741

Other taxation and social security
464,556
427,413

Other creditors
1,843,915
2,064,535

Accruals and deferred income
3,899,337
1,063,074

8,246,320
6,299,015


Page 27

 
HEPCO SLIDE SYSTEMS LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

22.


Deferred taxation




2023


£






At beginning of year
(1,056,595)


Charged to profit or loss
(441,228)



At end of year
(1,497,823)

The provision for deferred taxation is made up as follows:

2023
2022
£
£


Accelerated capital allowances
(1,302,214)
(932,029)

Fair value movements
(231,068)
(142,475)

Tax losses carried forward
16,071
-

Other timing differences
19,388
17,909

(1,497,823)
(1,056,595)


23.


Share capital

2023
2022
£
£
Allotted, called up and fully paid



800,000 (2022 - 800,000) Ordinary shares of £0.25 each
200,000
200,000



24.


Reserves

Profit and loss account

At the reporting date, there are unrealised gains of £1,112,083 (2022: £532,549) included in reserves carried forward relating to the revaluation of investment properties and listed investments.
Deferred tax provided in respect of these gains amounts to £231,067 (2022: £142,475).
Accordingly, there are non-distributable reserves of £881,016 (2022: £390,074) included in retained earnings carried forward.

Page 28

 
HEPCO SLIDE SYSTEMS LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

25.


Capital commitments

At the reporting date, the company had capital commitments of £422,675 (2022: £1,284,539) for the purchase of property, plant and equipment to be acquired. The amount contracted for but not provided in these financial statements was £293,072 (2022: £1,001,278).


26.


Pension commitments

At the reporting date, there was an amount of £77,550 (2022: £71,637) outstanding in respect of pension contributions payable by the company.  This amount is included in creditors.
Contributions payable by the company during the year were £447,506 (2022: £414,737).


27.


Commitments under operating leases

As a lessee:
At 31 December 2023 the company had future minimum lease payments due under non-cancellable operating leases for each of the following periods:

2023
2022
£
£


Not later than 1 year
990,457
764,942

Later than 1 year and not later than 5 years
1,673,168
1,784,384

Later than 5 years
693,255
970,025

3,356,880
3,519,351

As a lessor:
At 31 December 2023 the company is due to receive future minimum lease payments due under non-cancellable operating leases for each of the following periods:

2023
2022

£
£


Not later than 1 year
144,915
103,708

Later than 1 year and not later than 5 years
444,646
386,140

Later than 5 years
-
32,683

589,561
522,531

Page 29

 
HEPCO SLIDE SYSTEMS LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

28.


Transactions with directors

At the reporting date, the company owed G L Forster £1,006,114 (2022: £996,067). This amount is unsecured and repayable on demand. 
During the year, G L Forster charged the company interest of £64,416 (2022: £37,493).


29.


Related party transactions

The company has taken advantage of the exemptions provided by "Financial Reporting Standard 102" not to disclose transactions with the other group entities including its parent and fellow subsidiary undertakings.


30.


Post balance sheet events

Prior to the reporting date, the company had entered into negotiations to purchase additional land in order to expand operations at its Tiverton site. Subsequent to the reporting date, the company successfully completed the negotiations and acquired the land at a cost of £920,000 in April 2024.
This is considered to be a non-adjusting subsequent event and accordingly, the financial statements for the year ended 31 December 2023 have not been adjusted to reflect its impact.


31.


Controlling party

The ultimate parent company is Hepco (Holdings) Limited, a company incorporated and domiciled in England, which is controlled by Mr G L Forster.
The address of Hepco (Holdings) Limited's registered office is 124 Finchley Road, London, NW3 5JS and its consolidated financial statements may be obtained from the UK Companies House website: https://find-and-update .company-information .service.gov.uk /.
 
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