The directors present the strategic report for the year ended 30 April 2024.
Kruger Bidco Limited is the holding company of the Rhino Products Holdings Limited group of companies (Rhino Products Group). The principal business activity of the group throughout the period was that of a manufacturer of vehicle accessory equipment for light commercial vehicles.
The business has traded exceptionally well throughout the financial year to 30 April 2024 and has managed to report a strong turnover of £31.86m and Adjusted EBITDA of £7.7m. The shortages in registrations of new Light Commercial Vehicles (LCV’s) that we experienced in the prior financial year have started to come to an end with an increase of 15.5% in new LCV’s registered in the UK when compared to the prior financial year. This has led to increased customer demand, particularly from larger fleets of vehicles.
The significant increases in worldwide commodity prices have also started to stabilize in this financial year after significant year on year increases due to supply chain shortages initially caused by the covid-19 pandemic and exasperated by the Ukraine war. This has stabilized the costs of our raw materials and allowed the Gross Profit margins of the group to return to normal levels after a challenging period in the prior financial year.
Despite the above improvements in turnover and gross margins we have traded through a high inflationary period with indirect costs including labour costs and services continuing to rise as the year progressed leading to increased operating expenses. In addition to this the Bank of England base rate reached a 15 year high in August 23 to 5.25% and remained at this level throughout the financial year which has had a negative impact on various industries such as the property and building trade, which has consequently reduced customer demand from these industries.
The directors are pleased with the financial position of the group at 30 April 2024. The directors’ expectation is that company will continue to grow its sales whilst maintaining its profitability over the short, medium, and long term.
Turnover of £31.86 million for the year ended 30 April 2024 is 29.3% up on the prior financial year. This is a significant increase and has come from increases in both the UK and Europe. New LCV registrations are up in the UK (by 15.5%) and are also up in Europe compared to the prior year. This has contributed to the increased sales along winning new business and increasing market share in Europe. Hubb Systems Ltd was acquired in April 2022 and has contributed to the turnover increase (£1.0m) in the year, with its new internal racking product range (MR4). AVS Steps Ltd has also increased its sales activity in the year (£936k).
Adjusted EBITDA of £7.7 million has been achieved in the year. This is an increase of 62.2% on the £4.75 million Adjusted EBITDA achieved in the prior financial year. This is a phenomenal increase and has been achieved due to a combination of increased turnover along with improved gross profit margins achieved in the year due to raw material prices stabilizing and market conditions improving.
The Directors continue to re-invest revenues into Research & Development to ensure that Rhino Products remains a market leader in the UK and Europe for the manufacture of accessories for commercial vehicles. The company will continue to bring high-quality products to market through innovative designs led by its in-house design team with various new product releases expected in the next financial year.
The Rhino Group intends to use its strong brand name and high-quality product portfolio to continue growing market share in its Domestic and European markets over the coming years along with seizing opportunities to increase its Rest of World customer base.
In addition to organic growth in both new and existing markets the Rhino group is also continuing its buy and build strategy to acquire businesses in the UK and Europe with the right strategic fit.
The management of the business and execution of the group’s strategy are subject to a number of risks.
Economic Risk
The key risks and uncertainties that the business faces are linked to the ongoing economic impacts of the Ukraine war and conflict in the middle East which could cause further inflationary pressures along with prolonged increased interest rates having a negative impact on the economy and subdued customer demand.
The company has managed to mitigate these issues as much as possible by having strong partnerships with its suppliers and forward pricing agreements in place where possible along with holding sufficient stock of both raw and finished products to prevent stock outs. The company trades with customers in a number of different industries, meaning it is not solely reliant on any industry in particular.
Business & Financial Risk
One of the key business risks for the group is the risk of competition in both its Domestic and European markets. The group mitigates the risk of competition by supplying a wide range of high-quality products to various markets, catering to a number of different types of customers with bespoke fittings on a wide range of commercial vehicles.
The Rhino group predominantly conducts most of its trade in either GBP or Euros. This exposes the group to an exchange rate risk when converting Euros into GBP. This exchange rate risk is offset by the group having entities in Europe who hold Euro bank accounts and use Euros to support their ongoing operations. The group also purchases a proportion of its raw materials from Europe in Euro’s which also offsets this risk.
Credit Risk
As with any trading group, the group is exposed to the risk of bad debts and potential recoverability issues
from customers.
The group mitigates this risk by credit checking customers, having credit limits in place along with having its exposure spread over a wide range of customers without an over reliance on any one customer in particular.
The Rhino Group has an ongoing commitment towards sustainability, reducing its carbon footprint and impact on the environment. Over the last 12 months the company has become carbon neutral at its head office and main manufacturing site at Ellesmere Port in the UK. There are plans over the next 12 months to extend this across all sites in the group in both the UK and Europe and reduce the group’s overall carbon footprint.
On behalf of the board
The directors present their annual report and financial statements for the year ended 30 April 2024.
The directors who held office during the year and up to the date of signature of the financial statements were as follows:
No ordinary dividends were paid. The directors do not recommend payment of a further dividend.
The auditor, Moore Kingston Smith LLP, is deemed to be reappointed under section 487(2) of the Companies Act 2006.
The group has chosen in accordance with Companies Act 2006, s. 414C(11) to set out in the group's strategic report information required by Large and Medium-sized Companies and Groups (Accounts and Reports) Regulations 2008, Sch. 7 to be contained in the directors' report. It has done so in respect of business review, research and development and future developments.
We have audited the financial statements of Kruger Bidco Limited (the 'parent company') and its subsidiaries (the 'group') for the year ended 30 April 2024 which comprise the Group Statement of Comprehensive Income, the Group Balance Sheet, the Company Balance Sheet, the Group Statement of Changes in Equity, the Company Statement of Changes in Equity, the Group Statement of Cashflows and notes to the financial statements, including a summary of significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including FRS 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice).
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditor's responsibilities for the audit of the financial statements section of our report. We are independent of the group and parent company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC’s Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Conclusions relating to going concern
In auditing the financial statements, we have concluded that the directors' use of the going concern basis of accounting in the preparation of the financial statements is appropriate.
Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the group's and 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.
Other information
The other information comprises the information included in the annual report other than the financial statements and our auditor's report thereon. The directors are responsible for the other information contained within the annual report. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon.
Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the course of the audit, or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.
We have nothing to report in this regard.
Opinions on other matters prescribed by the Companies Act 2006
In our opinion, based on the work undertaken in the course of our audit:
the information given in the Strategic Report and the Directors' Report for the financial 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.
In the light of the knowledge and understanding of the group and the parent company and their 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 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.
As explained more fully in the Directors' Responsibilities Statement, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.
In preparing the financial statements, the directors are responsible for assessing the group's and 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 parent company or to cease operations, or have no realistic alternative but to do so.
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.
As part of an audit in accordance with ISAs (UK) we exercise professional judgement and maintain professional scepticism throughout the audit. We also:
Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purposes of expressing an opinion on the effectiveness of the company’s internal control.
Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the directors.
Conclude on the appropriateness of the directors’ use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the group's or the parent company’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause the group or the parent company to cease to continue as a going concern.
Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation.
Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the group to express an opinion on the consolidated financial statements. We are responsible for the direction, supervision and performance of the group audit. We remain solely responsible for our audit opinion.
We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.
Explanation as to what extent the audit was considered capable of detecting irregularities, including
fraud
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.
The objectives of our audit in respect of fraud, are; to identify and assess the risks of material misstatement of the financial statements due to fraud; to obtain sufficient appropriate audit evidence regarding the assessed risks of material misstatement due to fraud, through designing and implementing appropriate responses to those assessed risks; and to respond appropriately to instances of fraud or suspected fraud identified during the audit. However, the primary responsibility for the prevention and detection of fraud rests with both management and those charged with governance of the company.
Our approach was as follows:
We obtained an understanding of the legal and regulatory requirements applicable to the company and considered that the most significant are the Companies Act 2006, UK financial reporting standards as issued by the Financial Reporting Council, and UK taxation legislation.
We obtained an understanding of how the company complies with these requirements by discussions with management and those charged with governance.
We assessed the risk of material misstatement of the financial statements, including the risk of material misstatement due to fraud and how it might occur, by holding discussions with management and those charged with governance.
We inquired of management and those charged with governance as to any known instances of noncompliance or suspected non-compliance with laws and regulations.
Based on this understanding, we designed specific appropriate audit procedures to identify instances of non-compliance with laws and regulations. This included making enquiries of management and those charged with governance and obtaining additional corroborative evidence as required.
There are inherent limitations in the audit procedures described above. We are less likely to become aware of instances of non-compliance with laws and regulations that are not closely related to events and transactions reflected in the financial statements. Also, the risk of not detecting a material misstatement due to fraud is higher than the risk of not detecting one resulting from error, as fraud may involve deliberate concealment by, for example, forgery or intentional misrepresentations, or through collusion.
Use of our report
This report is made solely to the company’s members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken for no purpose other than to draw to the attention of the company’s members those matters we are required to include in an auditor's report addressed to them. To the fullest extent permitted by law, we do not accept or assume responsibility to any party 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.
As permitted by s408 Companies Act 2006, the company has not presented its own profit and loss account and related notes. The company’s loss for the year was £1,150,481 (2023: £3,715,169 ).
Kruger Bidco Limited (“the company”) is a private limited company domiciled and incorporated in England and Wales. The registered office is Rhino House, Deans Road, Ellesmere Port, United Kingdom, CH65 4DR.
The group consists of Kruger Bidco Limited and all of its subsidiaries.
These financial statements have been prepared in accordance with FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” (“FRS 102”) and the requirements of the Companies Act 2006.
The financial statements are prepared in sterling, which is the functional currency of the company. Monetary amounts in these financial statements are rounded to the nearest £.
The financial statements have been prepared under the historical cost convention. The principal accounting policies adopted are set out below.
The consolidated group financial statements consist of the financial statements of the parent company Kruger Bidco Limited together with all entities controlled by the parent company (its subsidiaries) and the group’s share of its interests in joint ventures and associates.
All financial statements are made up to 30 April 2024. Where necessary, adjustments are made to the financial statements of subsidiaries to bring the accounting policies used into line with those used by other members of the group.
All intra-group transactions, balances and unrealised gains on transactions between group companies are eliminated on consolidation. Unrealised losses are also eliminated unless the transaction provides evidence of an impairment of the asset transferred.
The group made a loss for the period of £2,052,903 and had a net liabilities position of £9,729,198 at the balance sheet date. However the group has net current assets of £9,666,525 and significant cash balances, and is cash generative. The results for the period include significant non cash items such as amortisation of goodwill, and as can be seen by note 10 the group generates positive EBITDA. The group has traded profitably at an EBITDA level since the year-end. The directors have produced forecasts which show the directors' expectation of growth in the group post year end. As a result, they have a reasonable expectation that the company has adequate resources to continue in operational existence for at least 12 months from the date of approval of the financial statements. Additionally as seen in note 31 and 32, since the balance sheet date Kruger Midco Limited have obtained significant influence over the group, becoming the immediate parent company, with Kruger Topco Limited becoming the Ultimate parent company. The directors have obtained confirmation that the group will continue to have adequate resources and finances following the restructure. Therefore, the directors continue to adopt the going concern basis of accounting in preparing the financial statements.
Turnover is recognised at the fair value of the consideration received or receivable for goods provided in the normal course of business, and is shown net of VAT and other sales related taxes. The fair value of consideration takes into account trade discounts, settlement discounts and volume rebates.
Revenue from the sale of goods is recognised when the significant risks and rewards of ownership of the goods have passed to the buyer (usually on dispatch of the goods), the amount of revenue can be measured reliably, it is probable that the economic benefits associated with the transaction will flow to the entity and the costs incurred or to be incurred in respect of the transaction can be measured reliably.
Research expenditure is written off against profits in the year in which it is incurred. Identifiable development expenditure is capitalised to the extent that the technical, commercial and financial feasibility can be demonstrated.
The gain or loss arising on the disposal of an asset is determined as the difference between the sale proceeds and the carrying value of the asset, and is recognised in the profit and loss account.
In the parent company financial statements, investments in subsidiaries, associates and jointly controlled entities are initially measured at cost and subsequently measured at cost less any accumulated impairment losses. The investments are assessed for impairment at each reporting date and any impairment losses or reversals of impairment losses are recognised immediately in profit or loss.
A subsidiary is an entity controlled by the group. Control is the power to govern the financial and operating policies of the entity so as to obtain benefits from its activities.
At each reporting period end date, the group reviews the carrying amounts of its tangible and intangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where it is not possible to estimate the recoverable amount of an individual asset, the company estimates the recoverable amount of the cash-generating unit to which the asset belongs.
The carrying amount of the investments accounted for using the equity method is tested for impairment as a single asset. Any goodwill included in the carrying amount of the investment is not tested separately for impairment.
The group has elected to apply the provisions of Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instruments Issues’ of FRS 102 to all of its financial instruments.
Financial instruments are recognised in the group's balance sheet when the group becomes party to the contractual provisions of the instrument.
Financial assets and liabilities are offset and the net amounts presented in the financial statements when there is a legally enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously.
Basic financial assets, which include debtors and cash and bank balances, are initially measured at transaction price including transaction costs and are subsequently carried at amortised cost using the effective interest method unless the arrangement constitutes a financing transaction, where the transaction is measured at the present value of the future receipts discounted at a market rate of interest. Financial assets classified as receivable within one year are not amortised.
Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire or are settled, or when the group transfers the financial asset and substantially all the risks and rewards of ownership to another entity, or if some significant risks and rewards of ownership are retained but control of the asset has transferred to another party that is able to sell the asset in its entirety to an unrelated third party.
Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the group after deducting all of its liabilities.
Basic financial liabilities, including creditors, bank loans, loans from fellow group companies and preference shares that are classified as debt, are initially recognised at transaction price unless the arrangement constitutes a financing transaction, where the debt instrument is measured at the present value of the future payments discounted at a market rate of interest. Financial liabilities classified as payable within one year are not amortised.
Debt instruments are subsequently carried at amortised cost, using the effective interest rate method.
Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Amounts payable are classified as current liabilities if payment is due within one year or less. If not, they are presented as non-current liabilities. Trade creditors are recognised initially at transaction price and subsequently measured at amortised cost using the effective interest method.
Debt instruments that do not meet the conditions in FRS 102 paragraph 11.9 are subsequently measured at fair value through profit or loss. Debt instruments may be designated as being measured at fair value though profit or loss to eliminate or reduce an accounting mismatch or if the instruments are measured and their performance evaluated on a fair value basis in accordance with a documented risk management or investment strategy.
Financial liabilities are derecognised when the group's contractual obligations expire or are discharged or cancelled.
The component parts of compound instruments issued by the group are classified separately as financial liabilities and equity in accordance with the substance of the contractual arrangement. At the date of issue, the fair value of the liability component is estimated using the prevailing market interest rate for a similar non-convertible instrument. This amount is recorded as a liability on an amortised cost basis using the effective interest method until extinguished upon conversion or at the instrument's maturity date. The equity component is determined by deducting the amount of the liability component from the fair value of the compound instrument as a whole. This is recognised and included in equity net of income tax effects and is not subsequently remeasured.
Equity instruments issued by the group are recorded at the proceeds received, net of transaction costs. Dividends payable on equity instruments are recognised as liabilities once they are no longer at the discretion of the group.
The tax expense represents the sum of the tax currently payable and deferred tax.
The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the profit and loss account because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The group’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.
Deferred tax liabilities are generally recognised for all timing differences and deferred tax assets are recognised to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits. Such assets and liabilities are not recognised if the timing difference arises from goodwill or from the initial recognition of other assets and liabilities in a transaction that affects neither the tax profit nor the accounting profit.
The carrying amount of deferred tax assets is reviewed at each reporting end date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realised. Deferred tax is charged or credited in the profit and loss account, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity. Deferred tax assets and liabilities are offset if, and only if, there is a legally enforceable right to offset current tax assets and liabilities and the deferred tax assets and liabilities relate to taxes levied by the same tax authority.
The costs of short-term employee benefits are recognised as a liability and an expense, unless those costs are required to be recognised as part of the cost of stock or fixed assets.
The cost of any unused holiday entitlement is recognised in the period in which the employee’s services are received.
Termination benefits are recognised immediately as an expense when the company is demonstrably committed to terminate the employment of an employee or to provide termination benefits.
Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.
Equity-settled share-based payments are measured at fair value at the date of grant by reference to the fair value of the equity instruments granted using the Black Scholes model. The fair value determined at the grant date is expensed on a straight-line basis over the vesting period, based on the estimate of shares that will eventually vest. A corresponding adjustment is made to equity.
When the terms and conditions of equity-settled share-based payments at the time they were granted are subsequently modified, the fair value of the share-based payment under the original terms and conditions and under the modified terms and conditions are both determined at the date of the modification. Any excess of the modified fair value over the original fair value is recognised over the remaining vesting period in addition to the grant date fair value of the original share-based payment. The share-based payment expense is not adjusted if the modified fair value is less than the original fair value.
Cancellations or settlements (including those resulting from employee redundancies) are treated as an acceleration of vesting and the amount that would have been recognised over the remaining vesting period is recognised immediately.
Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessees. All other leases are classified as operating leases.
Assets held under finance leases are recognised as assets at the lower of the assets fair value at the date of inception and the present value of the minimum lease payments. The related liability is included in the balance sheet as a finance lease obligation. Lease payments are treated as consisting of capital and interest elements. The interest is charged to profit or loss so as to produce a constant periodic rate of interest on the remaining balance of the liability.
Rentals payable under operating leases, including any lease incentives received, are charged to profit or loss on a straight line basis over the term of the relevant lease except where another more systematic basis is more representative of the time pattern in which economic benefits from the leased asset are consumed.
Transactions in currencies other than pounds sterling are recorded at the rates of exchange prevailing at the dates of the transactions. At each reporting end date, monetary assets and liabilities that are denominated in foreign currencies are retranslated at the rates prevailing on the reporting end date. Gains and losses arising on translation in the period are included in profit or loss.
In the application of the group’s accounting policies, the directors are required to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised where the revision affects only that period, or in the period of the revision and future periods where the revision affects both current and future periods.
The following judgements (apart from those involving estimates) have had the most significant effect on amounts recognised in the financial statements.
The depreciation and amortisation charges in respect of tangible and intangible fixed assets are based on the directors' best estimate of the useful economic lives and residual values of each asset class. The useful economic lives and residual values of each asset class are reassessed annually. Annual impairment reviews are performed on each class of asset to ensure that the carrying values are appropriate.
The group makes an estimate of the value of obsolete and slow moving stock lines based on the aging of the stock in hand. Provision is made where the estimated selling price less costs to sell and complete is less than the original cost.
The group makes an estimate of the recoverable value of trade and other debtors. When assessing impairment of trade and other debtors the directors consider factors including the current credit rating of the debtor, the ageing profile of debtors and historical experience. Provision is made when there is significant uncertainty over the timing or likelihood of the recovery of debts.
Judgement and estimation is required in determining the fair value of shares at the date of award. The fair value is estimated using valuation techniques which take into account the awards’ term, the risk-free interest rate and the expected volatility of the market price of the Company’s shares. Details of share-based payments and the assumptions applied are disclosed in note 27.
An analysis of the group's turnover is as follows:
The average monthly number of persons (including directors) employed by the group and company during the year was:
Their aggregate remuneration comprised:
The number of directors for whom retirement benefits are accruing under defined contribution pension schemes amounted to 1 (2023: 1).
The remuneration for the directors of the parent company was borne by Rhino Products Limited.
The remuneration of key management personnel, which includes the directors, was £598,990 (2023: £590,766).
The actual charge for the year can be reconciled to the expected credit for the year based on the profit or loss and the standard rate of tax as follows:
The net carrying value of tangible fixed assets includes the following in respect of assets held under finance leases or hire purchase contracts.
Details of the company's subsidiaries at 30 April 2024 are as follows:
Included within bank loans at the reporting date are two loans. The first loan is repayable on a quarterly basis, with final repayment on the maturity date of 31 October 2025, and interest is charged at 4% plus LIBOR per annum. The second loan is repayable in full upon maturity on 31 October 2026, with interest being charged at 4.5% plus LIBOR per annum.
Certain group companies have entered into a multilateral guarantee in respect of the loans. The assets of the group are pledged as security by way of fixed and floating charges.
Finance lease payments represent rentals payable by the company or group for certain items of plant and machinery. Leases include purchase options at the end of the lease period, and no restrictions are placed on the use of the assets. The average lease term is 4 years. All leases are on a fixed repayment basis and no arrangements have been entered into for contingent rental payments.
The loan notes constitute A1, A2, B1 and B2 loan notes.
The loan notes are repayable at the earlier of the sale of company and 30 April 2027, with interest being charged on the loan notes at 10% per annum.
Included at the reporting date are £16,801,230 (2023: £15,777,503) of unsecured loan notes, and £16,801,229 (2023: £15,777,503) of secured loan notes, secured by way of fixed and floating charges against the assets of the group.
The terms of the A1, A2, B1 and B2 loan notes meet the definition of basic financial instruments and therefore have been measured at amortised cost. At the balance sheet date, the value of these loan notes was £33,602,459 (2023: £31,555,006).
The following are the major deferred tax liabilities and assets recognised by the group and company, and movements thereon:
A defined contribution pension scheme is operated for all qualifying employees. The assets of the scheme are held separately from those of the group in an independently administered fund.
The A Ordinary shares have attached to them full dividend and capital distribution (including on winding up) rights but do not confer any rights of redemption. The shares also have attached to them full voting rights.
The B Ordinary shares have attached to them full dividend and capital distribution (including on winding up) rights but do not confer any rights of redemption. The shares also have attached to them full voting rights, expect in the case of an enhanced voting event, when the holder's voting rights will be suspended.
The C1 Ordinary shares have attached to them full dividend and capital distribution (including on winding up) rights but do not confer any rights of redemption. The shares also have attached to them full voting rights, expect in the case of an enhanced voting event, when the holder's voting rights will be suspended.
The C2 Ordinary shares have attached to them full dividend and capital distribution (including on winding up) rights but do not confer any rights of redemption. The shares also have attached to them full voting rights, expect in the case of an enhanced voting event, when the holder's voting rights will be suspended.
The company entered into arrangements with certain employees for its own equity instruments being B, C1 and C2 Ordinary shares during the period ended 30 April 2021. The employees will receive value from these shares on a future sale, if still in employment at the time of sale. Accordingly, these are treated as share based payments and will be equity-settled.
The fair value of these shares have been determined using the Black Scholes model at £1,766,851. This charge is being recognised over a period of four years to 31 October 2024.
At the reporting end date the group had outstanding commitments for future minimum lease payments under non-cancellable operating leases, which fall due as follows:
Kruger Bidco Limited, AVS Steps Limited, Rhino Products Holdings Limited, Rhino Products Limited, Hubb Systems Limited and Rhino Products BV have given a multilateral guarantee in favour of HSBC bank. Total group borrowings at the year end were £7,952,714 (2023: £9,637,178).
The debentures held by the group are secured by way of fixed and floating charges in favour of the bank, against the assets of Kruger Bidco Limited, AVS Steps Limited, Rhino Products Holdings Limited, Rhino Products Limited, Hubb Systems Limited and Rhino Products BV.
The company has taken the exemption to disclose other related party transactions under the same control in accordance with FRS 102 - Section 33 "Related Party Disclosures".
Since the balance sheet date Kruger Midco Limited have obtained significant influence over the group and the company, by virtue of holding more than 75% of the issued share capital, becoming the immediate parent company of Kruger Bidco Limited.