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Registered number: 02422332









HEPCO (HOLDINGS) LIMITED









ANNUAL REPORT AND FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2023

 
HEPCO (HOLDINGS) LIMITED
 
 
COMPANY INFORMATION


Directors
G L Forster 
G P Forster 




Company secretary
C G Reed



Registered number
02422332



Registered office
124 Finchley Road

London

NW3 5JS




Trading Address
Lower Moor Business Park
Tiverton Way

Tiverton

Devon

EX16 6TG






Independent auditors
Nyman Libson Paul LLP
Chartered Accountants & Statutory Auditors

124 Finchley Road

London

NW3 5JS





 
HEPCO (HOLDINGS) LIMITED
 

CONTENTS



Page
Group strategic report
 
1 - 2
Directors' report
 
3 - 6
Independent auditors' report
 
7 - 12
Consolidated statement of income and retained earnings
 
13
Consolidated statement of financial position
 
14 - 15
Company statement of financial position
 
16
Consolidated statement of cash flows
 
17 - 18
Consolidated analysis of net debt
 
19
Notes to the financial statements
 
20 - 39


 
HEPCO (HOLDINGS) LIMITED
 
 
GROUP STRATEGIC REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023

Introduction
 
The principal activities of the group 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 group operates in the UK and also through branches in mainland Europe and Asia.
The group also has an investment business, involving land and property, and listed investment portfolios which are actively managed.
The principal activity of the company is that of a holding company for a group of companies whose activities are referred to above and in note 16 to the financial statements.

Business review
 
The  results  for  the  group  show  a  pre-tax  profit  of  £3,693,091 (2022:  £2,665,366)  for  the  year  and  sales  of £46,702,332 (2022: £45,845,439). The group has net assets of £59,174,120 (2022: £56,210,073). 
During the year turnover has increased moderately compared with 2022. The group continued to capitalise on the high quality of its products which have historically increased the company's domestic and international market penetration. Additionally, the group has continued to invest heavily in machinery.
During the year, the group 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 group 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.
The group has continued to invest in research and development in order to enable it to maintain its competitive position in the market. 
The  directors  aim  to  maintain  the  management  policies  which  have  resulted  in  long  term  profitability.  New products and new markets are being developed continually. 
The management of the business and the execution of the group's strategy are subject to a number of risks. The key business risks and uncertainities affecting the group are considered to be competition at both national and international levels, employee retention and changes in technology together with supply chain pressures being felt under the current economic climate.

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

Page 1

 
HEPCO (HOLDINGS) LIMITED
 

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

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

2023
2022
Gross profit (%)
48.6
46.7
Wages to turnover ratio
0.46
0.42

Other key performance indicators for the group are as follows:

2023
2022
Training awards
2
5
Apprentices
25
17
Employee turnover (%)
15.5
12.2


Directors' statement of compliance with duty to promote the success of the Group
 
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.



C G Reed
Secretary

G P Forster
Director

Page 2

 
HEPCO (HOLDINGS) 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 group strategic report, the directors' report and the consolidated 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 the Group and of the profit or loss of the Group for that period.

 In preparing these financial statements, the directors are required to:


select suitable accounting policies for the Group'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 Group 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 the Group 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 the Group 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 £2,964,047 (2022 - £1,842,685).

The directors do not propose a final dividend.

Directors

The directors who served during the year were:

G L Forster 
G P Forster 

Future developments

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

Page 3

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

Financial instruments

The principal financial instruments of the group comprise cash at bank and various other items such as trade debtors and creditors. The main purpose of these instruments is to fund the group'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 group'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 group works with 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 group looks to keep interested parties informed of its key activities and works with local authorities and trade bodies to promote this.

Disabled employees

The group'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 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.

Page 4

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

Greenhouse gas emissions, energy consumption and energy efficiency action

The group's reportable greenhouse gas emissions and energy consumption within the UK are as follows:

2023
2022
Emissions resulting from activities for which the group is responsible involving the combustion of gas or consumption of fuel for the purposes of transport (in tonnes of CO2 equivalent)
300.99
225.81
Emissions resulting from the purchase of the electricity by the group for its own use, including the purposes of transport (in tonnes of CO2 equivalent)
389.13
377.64
Emissions resulting from the use of vehicles which the group does not own but used on company business (in tonnes of CO2 equivalent)
1.07
0.27
Emissions resulting from generation of electricity that is consumed in a transmission and distribution system which the group does not own or control (in tonnes of CO2 equivalent)
33.67
34.55
Gross emissions resulting from the activities above (in tonnes of CO2 equivalent)
724.86
638.27
Carbon offsets from exported self-generated solar electricity (in tonnes of CO2 equivalent)
(2.23)
-
Net emissions resulting from the activities above (in tonnes of CO2 equivalent)
722.63
638.27
Self-generated solar electricity consumed (in kWh)
357,149
-
tC02e saved using self-generated solar electricity
80.35
-
Total energy consumed from the activities above (in kWh)
3,830,654
3,103,107

In efforts to improve the energy and carbon emissions reporting to better align with SECR recommendations, data relating to other fuels, Butane and Propane, has been amended in the 2023 reporting and the 2022 comparatives restated for comparability. Self-generated solar electricity has been used to offset emissions. 

The group calculates its GHG emissions through application of the relevant and latest UK Government GHG onversion Factors for Company Reporting, and the 2023version was used in the calculation of the figures bove. HM Government Environmental Reporting Guidelines: including streamlined energy and carbon reporting uidance (March 2019) has been used for the collation of data sources and reporting of emissions.

The goup initiated the following energy efficiency actions during the reporting period:
• Condensing the weekend day and night shifts to just the day shift.
• Change of portable heating to thermostatic oil filled heaters within offices.
• Further increase in solar panels from 461 to 1,148 giving a total capacity of 485.73 (kilowatt peak) kWp
• Continued lighting upgrades from florescent tube to LED (90% complete).
• Adding timers to drinks machines in offices to shut down in the evenings and at weekends.
• Annual servicing of equipment (machines, heaters, etc) to optimise power usage and efficiency.

Intensity metrics
2023
2022
tCO2e gross emissions above/£m revenue
15.52
13.92
tCO2e net emissions above/£m revenue
13.82
13.92

The intensity metrics are a simple measure of energy efficiency which will allow for fair comparison over time through the comparison of emissions in tonnes of CO2 per £m of revenue as this best reflect business activity. 
Page 5

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


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 and the Group'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 and the Group's auditors are aware of that information.

Post balance sheet events

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

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.
 





C G Reed
Secretary
G P Forster
Director

Page 6

 
HEPCO (HOLDINGS) LIMITED
 
 
 
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF HEPCO (HOLDINGS) LIMITED
 

Opinion


We have audited the financial statements of Hepco (Holdings) Limited (the 'parent company') and its subsidiaries (the 'Group') for the year ended 31 December 2023, which comprise the consolidated statement of income and retained earnings, the Consolidated Statement of Financial Position, the Company Statement of Financial Position, the Consolidated Statement of Cash Flows 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 Group's and of the parent company's affairs as at 31 December 2023 and of the Group's profit for the year then ended;
have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and
have been prepared in accordance with the requirements of the Companies Act 2006.


Basis for opinion


We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditors' responsibilities for the audit of the financial statements section of our report. We are independent of the Group in accordance with the ethical requirements that are relevant to our audit of the financial statements in the 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 Group's or the parent company's ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.


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


Page 7

 
HEPCO (HOLDINGS) LIMITED
 
 
 
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF HEPCO (HOLDINGS) 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 group 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 group 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 Group and the parent company and its environment obtained in the course of the audit, we have not identified material misstatements in the group strategic report or the 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 by the parent company, or returns adequate for our audit have not been received from branches not visited by us; or
the parent company financial statements are not in agreement with the accounting records and returns; or
certain disclosures of directors' remuneration specified by law are not made; or
we have not received all the information and explanations we require for our audit.


Page 8

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


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 Group's and the parent company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the Group or the parent company or to cease operations, or have no realistic alternative but to do so.


Page 9

 
HEPCO (HOLDINGS) LIMITED
 
 
 
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF HEPCO (HOLDINGS) 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 Group 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 Group’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 Group 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 Group 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 10

 
HEPCO (HOLDINGS) LIMITED
 
 
 
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF HEPCO (HOLDINGS) 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 11

 
HEPCO (HOLDINGS) LIMITED
 
 
 
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF HEPCO (HOLDINGS) 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 12

 
HEPCO (HOLDINGS) LIMITED
 
 
CONSOLIDATED STATEMENT OF INCOME AND RETAINED EARNINGS
FOR THE YEAR ENDED 31 DECEMBER 2023

2023
2022
Note
£
£

  

Turnover
 4 
46,702,332
45,845,439

Cost of sales
  
(24,027,935)
(24,438,394)

Gross profit
  
22,674,397
21,407,045

Distribution costs
  
(13,194,005)
(11,951,849)

Administrative expenses
  
(7,016,804)
(6,285,528)

Other operating income
 5 
121,492
103,878

Operating profit
 6 
2,585,080
3,273,546

Fair value movements
  
126,910
63,455

Income from investments
 11 
121,681
-

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

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

Interest receivable and similar income
 12 
433,388
109,221

Interest payable and similar expenses
 13 
(64,416)
(37,537)

Profit before tax
  
3,693,091
2,665,366

Tax on profit
 14 
(729,044)
(822,681)

Profit after tax
  
2,964,047
1,842,685

  

  

Retained earnings at the beginning of the year
  
56,005,073
54,162,388

Profit for the year attributable to the owners of the parent
  
2,964,047
1,842,685

Retained earnings at the end of the year
  
58,969,120
56,005,073

There were no recognised gains and losses for 2023 or 2022 other than those included in the consolidated statement of income and retained earnings.

The notes on pages 20 to 39 form part of these financial statements.

Page 13

 
HEPCO (HOLDINGS) LIMITED
REGISTERED NUMBER: 02422332

CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 31 DECEMBER 2023

2023
2022
Note
£
£

Fixed assets
  

Tangible assets
 15 
17,575,927
17,447,203

Investment property
 17 
1,903,650
1,776,740

  
19,479,577
19,223,943

Current assets
  

Stocks
 18 
18,195,578
15,123,869

Debtors: amounts falling due within one year
 19 
7,447,115
9,879,719

Current asset investments
 20 
9,818,369
9,140,843

Cash at bank and in hand
 21 
14,838,309
10,803,302

  
50,299,371
44,947,733

Creditors: amounts falling due within one year
 22 
(8,118,889)
(6,238,215)

Net current assets
  
 
 
42,180,482
 
 
38,709,518

Total assets less current liabilities
  
61,660,059
57,933,461

Provisions for liabilities
  

Deferred taxation
 24 
(2,485,939)
(1,723,388)

  
 
 
(2,485,939)
 
 
(1,723,388)

Net assets
  
59,174,120
56,210,073

Page 14

 
HEPCO (HOLDINGS) LIMITED
REGISTERED NUMBER: 02422332
    
CONSOLIDATED STATEMENT OF FINANCIAL POSITION (CONTINUED)
AS AT 31 DECEMBER 2023

2023
2022
Note
£
£

Capital and reserves
  

Called up share capital 
 25 
140,700
140,700

Share premium account
 26 
2,000
2,000

Other reserves
 26 
62,300
62,300

Profit and loss account
 26 
58,969,120
56,005,073

  
59,174,120
56,210,073


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




G P Forster
Director

The notes on pages 20 to 39 form part of these financial statements.

Page 15

 
HEPCO (HOLDINGS) LIMITED
REGISTERED NUMBER: 02422332

COMPANY STATEMENT OF FINANCIAL POSITION
AS AT 31 DECEMBER 2023

2023
2022
Note
£
£

Fixed assets
  

Investments
 16 
220,010
220,010

  
220,010
220,010

Current assets
  

Cash at bank and in hand
 21 
10
10

  
10
10

Creditors: amounts falling due within one year
 22 
(15,020)
(15,020)

Net current liabilities
  
 
 
(15,010)
 
 
(15,010)

Total assets less current liabilities
  
205,000
205,000

  

  

Net assets
  
205,000
205,000


Capital and reserves
  

Called up share capital 
 25 
140,700
140,700

Share premium account
 26 
2,000
2,000

Other reserves
 26 
62,300
62,300

Profit and loss account brought forward
  
-
-

Profit for the year
  
-
-

Profit and loss account carried forward
  
-
-

  
205,000
205,000


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




G P Forster
Director

The notes on pages 20 to 39 form part of these financial statements.

Page 16

 
HEPCO (HOLDINGS) LIMITED
 

CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 DECEMBER 2023

2023
2022
£
£

Cash flows from operating activities

Profit for the financial year
2,964,047
1,842,685

Adjustments for:

Depreciation of tangible assets
1,530,515
1,210,949

Loss on disposal of tangible assets
56,711
2,573

Interest paid
64,416
37,537

Interest received
(433,388)
(109,221)

Fair value movements
(126,910)
(63,455)

Income from fixed assets investments
(121,681)
-

Profit on disposal of listed investments
(37,824)
-

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

Taxation charge
729,044
822,681

Increase in stocks
(3,071,709)
(3,030,008)

Decrease/(increase) in debtors
2,915,983
(2,151,334)

Increase in creditors
1,871,368
1,361,552

Corporation tax paid
(450,613)
(846,467)

Net cash generated from operating activities

5,437,335
(179,189)


Cash flows from investing activities

Purchase of tangible fixed assets
(3,887,498)
(5,352,655)

Sale of tangible fixed assets
2,171,548
1,548

Purchase of short-term listed investments
(3,007,483)
(3,200,000)

Sale of short-term listed investments
2,820,405
-

Interest received
433,388
109,221

Dividends received
121,681
-

Net cash from investing activities

(1,347,959)
(8,441,886)
Page 17

 
HEPCO (HOLDINGS) LIMITED
 

CONSOLIDATED STATEMENT OF CASH FLOWS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023


2023
2022

£
£



Cash flows from financing activities

Net increase in loans due to directors
10,047
-

Interest paid
(64,416)
(37,537)

Net cash used in financing activities
(54,369)
(37,537)

Net increase/(decrease) in cash and cash equivalents
4,035,007
(8,658,612)

Cash and cash equivalents at beginning of year
10,803,302
19,461,914

Cash and cash equivalents at the end of year
14,838,309
10,803,302


Cash and cash equivalents at the end of year comprise:

Cash at bank and in hand
14,838,309
10,803,302

14,838,309
10,803,302


The notes on pages 20 to 39 form part of these financial statements.

Page 18

 
HEPCO (HOLDINGS) LIMITED
 

CONSOLIDATED ANALYSIS OF NET DEBT
FOR THE YEAR ENDED 31 DECEMBER 2023





At 1 January 2023
Cash flows
Other non-cash changes
At 31 December 2023
£

£

£

£

Cash at bank and in hand

10,803,302

4,035,007

-

14,838,309

Debt due within 1 year

(996,067)

(10,047)

-

(1,006,114)

Liquid investments

9,140,843

187,078

490,448

9,818,369


18,948,078
4,212,038
490,448
23,650,564

The notes on pages 20 to 39 form part of these financial statements.

Page 19

 
HEPCO (HOLDINGS) LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

1.


General information

Hepco  (Holdings)  Limited  ("the  company")  and  its  subsidaries  (together  "'the  group"')  operate  in  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 is a private company limited by shares and is incorporated and domiciled in England. The address 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.

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 Group management to exercise judgment in applying the Group's accounting policies (see note 3).

The company has taken advantage of the exemption allowed under section 408 of the Companies Act 2006 and has not presented its own statement of income and retained earnings in these financial statements.

The following principal accounting policies have been applied:

 
2.2

Basis of consolidation

The consolidated financial statements present the results of the company and its own subsidiaries ("the group") as if they form a single entity. Intercompany transactions and balances between group companies are therefore eliminated in full.
The consolidated financial statements incorporate the results of business combinations using the purchase method. In the statement of financial position, the acquiree's identifiable assets, liabilities and contingent liabilities are initially recognised at their fair values at the acquisition date. The results of acquired operations are included in the consolidated statement of income and retained earnings from the date on which control is obtained. They are deconsolidated from the date control ceases.

Page 20

 
HEPCO (HOLDINGS) 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

Product revenue
Turnover comprises net invoiced sales of manufactured automated systems, precision engineering and other related products.
Revenue is  recognised at the point of dispatch when it is probable that the economic benefits will flow to the group 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. 
Project revenue
Project revenue represents amounts receivable for work carried out in producing bespoke manufactured precision engineering components and other related products. Revenue is recognised over the period of the project on a percentage of completion basis and in accordance with the underlying contract. The percentage of completion basis compares the proportion of project costs incurred to total estimated costs and recognises the same proportion of income in relation to the total contract value.

 
2.5

Operating leases: the Group 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 through profit or loss on a straight-line basis over the period of the lease. 

Page 21

 
HEPCO (HOLDINGS) LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

2.Accounting policies (continued)

 
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.

 
2.8

Finance costs

Finance costs are charged to 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 Group operates a defined contribution plan for its employees. A defined contribution plan is a pension plan under which the Group pays fixed contributions into a separate entity. Once the contributions have been paid the Group 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 Group 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 group 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 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 determind using tax rates and laws that have been enacted or substantively enacted by the reporting date.

Page 22

 
HEPCO (HOLDINGS) LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

2.Accounting policies (continued)

 
2.11

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.

The Group 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 Group. 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.

Depreciation is provided on the following basis:

Freehold buildings
-
over 20 to 50 years
Leasehold improvements
-
over the period of the lease/over the period of rent reduction in respect of costs to bring the asset into use
Plant and machinery
-
over 2 to 20 years
Motor vehicles
-
over 5 to 10 years
Fixtures and fittings
-
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.

 
2.12

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 through the Statement of Income and Retained Earnings.

 
2.13

Valuation of investments

Investments in subsidiaries are measured at cost less accumulated impairment.

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 23

 
HEPCO (HOLDINGS) LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

2.Accounting policies (continued)

 
2.14

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.

 
2.15

Debtors

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

 
2.16

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.

 
2.17

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 24

 
HEPCO (HOLDINGS) LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

2.Accounting policies (continued)

 
2.18

Financial instruments

The Group 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 Group's statement of financial position when the Group 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 Group'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 Group after the deduction of all its liabilities.

Basic financial liabilities, which include trade and other payables, bank loans, other loans and loans due to fellow group companies 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 25

 
HEPCO (HOLDINGS) 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 group's accounting policies. As such, the nature of estimation means that actual outcomes could differ from those estimates. The following are the group'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  group  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 group 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 group.

Page 26

 
HEPCO (HOLDINGS) 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
£
£

United Kingdom
8,256,540
8,829,008

Rest of Europe
29,147,245
26,320,167

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

46,702,332
45,845,439



5.


Other operating income

2023
2022
£
£

Net rents receivable
121,492
103,878

121,492
103,878



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
(287,955)

Other operating lease rentals
933,850
546,146


7.


Auditors' remuneration

2023
2022
£
£

Fees payable to the Group's auditors and their associates for the audit of the Group's financial statements
76,500
64,700

Fees payable to the Group's auditors and their associates in respect of:

All non-audit services not included above
18,934
14,477

Page 27

 
HEPCO (HOLDINGS) LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

8.


Employees

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


Group
Group
Company
Company
2023
2022
2023
2022
£
£
£
£


Wages and salaries
19,229,069
17,362,591
-
-

Social security costs
1,467,531
1,370,982
-
-

Cost of defined contribution scheme
570,311
522,646
-
-

21,266,911
19,256,219
-
-


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


        2023
        2022
            No.
            No.







Management
6
5



Administration
46
41



Production
243
239



Sales
101
103



Marketing
8
7



Research and development
8
7

412
402

The company has no employees other than the directors, who did not receive any remuneration (2022 - £NIL)

9.


Key management compensation

Key mangement are the group's directors. The compensation paid or payable to key management for employee services is shown below. 


Group
Group
2023
2022
£
£


Salaries and other short term benefits
3,812,819
2,997,285

3,812,819
2,997,285

Page 28

 
HEPCO (HOLDINGS) LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

10.


Directors' remuneration

Group
Group
2023
2022
£
£


Directors' emoluments
3,327,659
2,596,539

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

3,397,982
2,668,345

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


11.


Income from investments

2023
2022
£
£



Income from current asset investments
121,681
-

121,681
-





12.


Interest receivable

2023
2022
£
£


Bank interest receivable
433,388
109,221

433,388
109,221

Page 29

 
HEPCO (HOLDINGS) LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

13.


Interest payable and similar expenses

2023
2022
£
£


Other loan interest payable
64,416
37,493

Other interest payable
-
44

64,416
37,537


14.


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)


(78,102)
148,425

Foreign tax


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

Total current tax
(33,507)
274,712

Deferred tax


Origination and reversal of timing differences
762,551
547,969

Total deferred tax
762,551
547,969


729,044
822,681
Page 30

 
HEPCO (HOLDINGS) LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
 
14.Taxation (continued)


Factors affecting tax charge for the year

The tax assessed for the year is higher 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
3,693,091
2,665,366


Profit on ordinary activities multiplied by standard rate of corporation tax in the UK of 23.5% (2022 - 19%)
867,876
506,420

Effects of:


Expenses not deductible for tax purposes
10,898
5,965

Capital allowances for year in excess of depreciation
31,318
2,144

Higher rate taxes on overseas earnings
34,106
-

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

Short-term timing difference leading to an increase (decrease) in taxation
759
-

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

Capital gains
(927)
-

Unrelieved foreign tax carried forward
-
83,194

Other differences leading to an increase (decrease) in the tax charge
133,245
79,919

Total tax charge for the year
729,044
822,681


Factors that may affect future tax charges

There were no factors that may affect future tax charges.

Page 31

 
HEPCO (HOLDINGS) LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

15.


Tangible fixed assets

Group






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

£
£
£
£
£



Cost or valuation


At 1 January 2023
11,409,821
17,567,220
120,946
1,326,156
30,424,143


Additions
430,154
3,400,679
-
56,665
3,887,498


Disposals
(2,210,655)
(372,685)
-
-
(2,583,340)



At 31 December 2023

9,629,320
20,595,214
120,946
1,382,821
31,728,301



Depreciation


At 1 January 2023
2,429,666
9,378,803
72,371
1,096,100
12,976,940


Charge for the year on owned assets
159,066
1,290,520
9,157
71,772
1,530,515


Disposals
-
(355,081)
-
-
(355,081)



At 31 December 2023

2,588,732
10,314,242
81,528
1,167,872
14,152,374



Net book value



At 31 December 2023
7,040,588
10,280,972
39,418
214,949
17,575,927



At 31 December 2022
8,980,155
8,188,417
48,575
230,056
17,447,203

At the reporting date, included within the net book value of land and buildings is £6,978,804 (2022: £8,908,165) relating to freehold land and buildings and £61,784 (2022: £71,990) relating to short term leasehold land and buildings.

Page 32

 
HEPCO (HOLDINGS) LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

16.


Fixed asset investments

Company





Investments in subsidiary companies

£



Cost or valuation


At 1 January 2023
220,010



At 31 December 2023
220,010





Subsidiary undertakings


The following were subsidiary undertakings of the company:

Name

Class of shares

Holding

Hepco Slide Systems Limited
Ordinary
100%
Braintree Precision Components Limited
Ordinary
100%
Hepcoautomation Limited
Ordinary
100%

Principal activity
Hepco Slide Systems Limited
The manufacture and distribution of machine elements destined for machine builders, factories and endusers. 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.
Braintree Precision Components Limited
The manufacture and distribution of precision engineering components.
Hepcoautomation Limited
The manufacture and distribution of automated systems.
Registered Office
The registered office for all subsidiary undertakings of the company is 124 Finchley Road, London, NW3 5JS.

Page 33

 
HEPCO (HOLDINGS) LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

17.


Investment property

Group


Freehold investment property

£



Valuation


At 1 January 2023
1,776,740


Surplus on revaluation
126,910



At 31 December 2023
1,903,650





18.


Stocks

Group
Group
2023
2022
£
£

Raw materials and consumables
3,970,217
3,514,858

Work in progress
2,874,778
2,722,276

Finished goods and goods for resale
11,350,583
8,886,735

18,195,578
15,123,869


The carrying value of stocks are stated net of impairment losses  due to slow-moving and obsolete stock totalling £3,746,119 (2022 - £3,488,217). Impairment losses totalling £257,902 (2022 - £557,000) were recognised in profit and loss.


19.


Debtors

Group
Group
2023
2022
£
£


Trade debtors
5,565,092
7,966,769

Other debtors
1,041,515
723,420

Prepayments and accrued income
840,508
1,189,530

7,447,115
9,879,719


Page 34

 
HEPCO (HOLDINGS) LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

20.


Current asset investments

Group
Group
2023
2022
£
£

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

9,818,369
9,140,843



21.


Cash and cash equivalents

Group
Group
Company
Company
2023
2022
2023
2022
£
£
£
£

Cash at bank and in hand
14,838,309
10,803,302
10
10

14,838,309
10,803,302
10
10



22.


Creditors: Amounts falling due within one year

Group
Group
Company
Company
2023
2022
2023
2022
£
£
£
£

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

Amounts owed to group undertakings
-
-
15,020
15,020

Corporation tax
-
741
-
-

Other taxation and social security
544,957
503,515
-
-

Other creditors
1,844,756
2,065,336
-
-

Accruals and deferred income
4,150,025
1,273,906
-
-

8,118,889
6,238,215
15,020
15,020



23.


Financial instruments

Group
Group
2023
2022
£
£

Financial assets

Financial assets measured at fair value through profit or loss
9,818,369
9,140,843




Financial assets measured at fair value through profit or loss comprise listed investments.

Page 35

 
HEPCO (HOLDINGS) LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

24.


Deferred taxation


Group



2023


£






At beginning of year
(1,723,388)


Charged to profit or loss
(762,551)



At end of year
(2,485,939)

Company


2023
£





At beginning of year
-


Charged to profit or loss
-



At end of year
-

The provision for deferred taxation is made up as follows:

Group
Group
2023
2022
£
£

Accelerated capital allowances
(2,296,033)
(1,604,001)

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

Tax losses carried forward
16,071
-

Other timing differences
25,091
23,088

(2,485,939)
(1,723,388)


25.


Share capital

2023
2022
£
£
Allotted, called up and fully paid



562,800 (2022 - 562,800) Ordinary shares of £0.25 each
140,700
140,700


Page 36

 
HEPCO (HOLDINGS) LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

26.


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.


27.


Capital commitments

At the reporting date, the group had capital commitments of £1,595,372 (2022: £2,701,397) for the purchase of property, plant and equipment to be acquired. The amount contracted for but not provided in these financial statements was £979,686 (2022: £1,659,587).




28.


Pension commitments

At the reporting date, there was an amount of £100,363 (2022: £92,355) outstanding in respect of pension contributions payable by the group. This amount is included within creditors.
Contributions payable by the group during the year were £570,311 (2022: £569,632).

Page 37

 
HEPCO (HOLDINGS) LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

29.


Commitments under operating leases

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


Group
Group
2023
2022
£
£

Not later than 1 year
1,034,495
810,411

Later than 1 year and not later than 5 years
1,673,168
1,826,884

Later than 5 years
693,255
970,025

3,400,918
3,607,320
As a lessor:
At 31 December 2023 the Group is due to receive future minimum lease payments due under noncancellable operating leases for each of the following periods:

Group
Group
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


30.


Transactions with directors

At the reporting date, the group 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 group interest of £64,416 (2022: £37,493).


31.


Related party transactions

The company has taken advantage of the exemptions provided by "Financial Reporting Standard 102" not to disclose transactions and balances with its wholly owned subsidiary undertakings.

Page 38

 
HEPCO (HOLDINGS) LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

32.


Post balance sheet events

Prior to the reporting date, the group had entered into negotiations to purchase additional land in order to expand operations at its Tiverton site. Subsequent to the reporting date, the group 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.


33.


Controlling party

The parent company and all its subsidiary undertakings are under the control of G L Forster, a director of all group undertakings.

Page 39