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Registration number: 03685414

Holmestone Ltd

Annual Report and Consolidated Financial Statements

for the Year Ended 31 December 2023

 

Holmestone Ltd

Contents

Company Information

1

Directors' Report

3 to 4

Independent Auditor's Report

5 to 7

Consolidated Profit and Loss Account

8

Consolidated Statement of Comprehensive Income

9

Consolidated Balance Sheet

10

Balance Sheet

11

Consolidated Statement of Changes in Equity

12 to 13

Consolidated Statement of Cash Flows

14

Notes to the Financial Statements

15 to 29

 

Holmestone Ltd

Company Information

Directors

P Fay

B E Isard

Registered office

Savoy House
Savoy Circus
London
W3 7DA

Auditors

Wem & Co
Savoy House
Savoy Circus
London
W3 7DA

 

Holmestone Ltd

Strategic Report for the Year Ended 31 December 2023

The directors present their strategic report for the year ended 31 December 2023.

Principal activity

The principal activity of the group is was that of manufacture and distribution of electrical and electronic apparatus

Fair review of the business

The results of the year under review and the financial position at the year end were considered satisfactory by the directors.

The results of the group show a pre-tax profit of £16.1 million (2022: £12.3 million) for the year and sales of £36.8 million (2022: £31.7 million). The company has cash at bank of £8.2 million (2022: £6.6 million).

The management of the business and the execution of the company's strategy are subject to a number of risks.

The key business risks and uncertainties affecting the company are considered to relate to competition from international, national and independent manufacturers and distributors, employee retention and product availability.

There are significant challenges involved arising from imported goods. Outlined below are the key related risks and their impact on the company's business.

1. Increased administrative costs relating to imported goods, such as data collection, declaration and customs costs at ports and airports. Our shippers bear the burden of such costs. We negotiate with our shippers to mitigate the costs passed onto our business.

2. Costs arising from delays at ports. We do not anticipate material costs from delays. We have built up sufficient stocks of raw materials.

3. Increases in tariffs and duties on goods exported. We maintain a watch on these costs with a view to mitigating them when possible.

4. The impact of delays and costs above is unlikely to have any material effect on fulilment of contractual delivery, quality and supply requirements as the Company builds in extra lead time on orders due to be delivered to the customer. Breaches of contract aer unlikely to occur as promised delivery times build in sufficient delay.

5. Changes to the value of Sterling can affect pricing of our raw material imports but this is usually compensated by making goods cheaper in our export markets. The company exposrts 75% of its goods.
 

Approved and authorised by the Board on 10 October 2024 and signed on its behalf by:
 

.........................................
B E Isard
Director

 

Holmestone Ltd

Directors' Report for the Year Ended 31 December 2023

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

Directors of the group

The directors who held office during the year were as follows:

P Fay

B E Isard

Financial instruments

Price risk, credit risk, liquidity risk and cash flow risk

(a) Credit risk - The company's exposure to credit risk is influenced mainly by the individual characteristics of each customer. However, management also considers the factors that may influence the credit risk of its customer base, including the default risk of the industry and country in which customers operate.

The company has established a credit policy under which each new customer is analysed individually for creditworthiness before the company's standard payment and delivery terms and conditions are offered. The company review includes external ratings, if they are available, and in some cases references. Sale limits are established for each customer and reviewed regularly.

Goods are sold subject to retention of title clauses, so that in the event of non-payment the company may have a secured claim.

(b) Interest rate risk - The company has no borrowings and so this risk is regarded as low .

(c) Liquidity risk - The company has a policy of maintaining sufficient liquid resources to ensure that it has resources to meet working capital requirements.

(d) Price risk - The company trades in international markets and hence is susceptible to pricing pressures from competitors and currency fluctuations.

(e) Cash flow risk - The company maintains sufficient cash reserves to minimise the risk of disruption in cash flows.

(f) Exposure to foreign economies - The company has a number of overseas markets at present and this gives rise to foreign exchange risks. Changing legislation and other regulations can affect product specification, as will the effect of the UK leaving the European Union. More diversity in legislation can only increase manufacturing costs. Foreign exchange risk is mitigated by careful use of currency contracts.

Disclosure of information to the auditor

Each director has taken steps that they ought to have taken as a director in order to make themselves aware of any relevant audit information and to establish that the company's auditor is aware of that information. The directors confirm that there is no relevant information that they know of and of which they know the auditor is unaware.

Approved and authorised by the Board on 10 October 2024 and signed on its behalf by:
 

 

Holmestone Ltd

Directors' Report for the Year Ended 31 December 2023 (continued)

.........................................
B E Isard
Director

 

Holmestone Ltd

Independent Auditor's Report to the Members of Holmestone Ltd

Opinion

We have audited the financial statements of Holmestone Ltd (the 'parent company') and its subsidiaries (the 'group') for the year ended 31 December 2023, which comprise the Consolidated Profit and Loss Account, Consolidated Statement of Comprehensive Income, Consolidated Balance Sheet, Balance Sheet, Consolidated Statement of Changes in Equity, Consolidated Statement of Cash Flows, 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 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 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 auditor 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 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 director's 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 ability to continue as a going concern for a period of at least twelve months from when the original financial statements were 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 directors are responsible for the other information. The other information comprises the information included in the annual report, other than the financial statements and our auditor’s report thereon. 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.

In connection with our audit of the financial statements, 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 audit or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether there is a material misstatement in the financial statements or a material misstatement of the other information. 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.

 

Holmestone Ltd

Independent Auditor's Report to the Members of Holmestone Ltd (continued)

Opinion on other matter prescribed by the Companies Act 2006

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

the information given in the Strategic Report and Directors' Report for the financial year for which the financial statements are prepared is consistent with the financial statements; and

the Strategic Report and 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 our knowledge and understanding of the company and its environment obtained in the course of the audit, we have not identified material misstatements in the Strategic Report and the Directors' Report.

We have nothing to report in respect of the following matters where 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.

Responsibilities of directors

As explained more fully in the [set out on page ], the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the financial statements, the directors are responsible for assessing the company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the company or to cease operations, or have no realistic alternative but to do so.

Auditor Responsibilities for the audit of the financial statements

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.

The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below:

 

Holmestone Ltd

Independent Auditor's Report to the Members of Holmestone Ltd (continued)

We identified areas of laws and regulations that could reasonably be expected to have a material effect on the financial statements from our sector experience through discussion with the Officers and other management (as required by auditing standards).

• We had regard to laws and regulations in areas that directly affect the financial statements including financial reporting (including related trade union legislation) and taxation legislation.We considered that extent of compliance with those laws and regulations as part of our procedures on the related financial statement items.

• With the exception of any known or possible non-compliance, and as required by auditing standards, our work in respect of these was limited to enquiry of the Officers.

• We communicated identified laws and regulations throughout our team and remained alert to any indications of non-compliance throughout the audit.

• We addressed the risk of fraud through management override of controls, by testing 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.

Our audit procedures were designed to respond to risks of material misstatement in the financial statements, recognising that 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, misrepresentations or through collusion. There are inherent limitations in the audit procedures performed and the further removed non-compliance with laws and regulations is from the events and transactions reflected in the financial statements, the less likely we are to become aware of it.

A further description of our responsibilities is available on the Financial Reporting Council’s website at: www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor’s report.

Use of our report

This report is made solely to the company’s members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the company’s members those matters we are required to state to them in an auditor’s report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company’s members as a body, for our audit work, for this report, or for the opinions we have formed.

......................................
Alistair I Wem BSc FCA (Senior Statutory Auditor)
For and on behalf of Wem & Co, Statutory Auditor

Savoy House
Savoy Circus
London
W3 7DA

28 October 2024

 

Holmestone Ltd

Consolidated Profit and Loss Account for the Year Ended 31 December 2023

Note

31.12.23
£

31.12.22
£

Turnover

3

36,758,516

31,657,151

Cost of sales

 

(14,573,632)

(14,904,499)

Gross profit

 

22,184,884

16,752,652

Administrative expenses

 

(9,923,251)

(9,088,794)

Other operating income

279,806

754,741

Operating profit

4

12,541,439

8,418,599

Income from shares in group undertakings

 

3,607,724

3,841,555

Other interest receivable and similar income

5

57,650

63,965

Amounts written off investments

 

(125,721)

-

Interest payable and similar expenses

6

(69,690)

(89,584)

   

3,469,963

3,815,936

Share of profit of equity accounted investees

 

75,690

48,794

Profit before tax

 

16,087,092

12,283,329

Tax on profit

9

(2,848,582)

(1,633,371)

Profit for the financial year

 

13,238,510

10,649,958

Profit/(loss) attributable to:

 

Owners of the company

 

13,434,421

9,212,824

Minority interests

 

(195,911)

1,437,134

 

13,238,510

10,649,958

 

Holmestone Ltd

Consolidated Statement of Comprehensive Income for the Year Ended 31 December 2023

31.12.23
£

31.12.22
£

Profit for the year

13,238,510

10,649,958

Total comprehensive income for the year

13,238,510

10,649,958

Total comprehensive income attributable to:

Owners of the company

13,434,421

9,212,824

Minority interests

(195,911)

1,437,134

13,238,510

10,649,958

 

Holmestone Ltd

(Registration number: 03685414)
Consolidated Balance Sheet as at 31 December 2023

Note

31.12.23
£

31.12.22
£

Fixed assets

 

Intangible assets

10

8,850,877

9,765,194

Tangible assets

11

4,709,061

4,474,140

Investment property

12

6,830,000

6,830,000

Investments

13

1,397,163

1,318,374

Other financial assets

5,355

-

 

21,792,456

22,387,708

Current assets

 

Stocks

14

7,424,868

6,346,102

Debtors

15

13,914,409

11,660,366

Cash at bank and in hand

 

8,214,923

6,595,219

 

29,554,200

24,601,687

Creditors: Amounts falling due within one year

17

(6,922,934)

(6,964,966)

Net current assets

 

22,631,266

17,636,721

Total assets less current liabilities

 

44,423,722

40,024,429

Provisions for liabilities

18

(1,908,082)

(1,745,397)

Net assets

 

42,515,640

38,279,032

Capital and reserves

 

Called up share capital

20

101

101

Share premium reserve

3,524,999

3,524,999

Revaluation reserve

-

3,202,202

Other reserves

7,809,746

7,935,063

Retained earnings

16,087,960

8,327,922

Equity attributable to owners of the company

 

27,422,806

22,990,287

Minority interests

 

15,092,834

15,288,745

Shareholders' funds

 

42,515,640

38,279,032

Approved and authorised by the Board on 10 October 2024 and signed on its behalf by:
 

.........................................
B E Isard
Director

 

Holmestone Ltd

(Registration number: 03685414)
Balance Sheet as at 31 December 2023

Note

31.12.23
£

31.12.22
£

Fixed assets

 

Investments

13

4,907,786

5,019,517

Current assets

 

Debtors

15

203,482

437,879

Cash at bank and in hand

 

4,243,849

3,045,443

 

4,447,331

3,483,322

Creditors: Amounts falling due within one year

17

(1,472,149)

(1,109,914)

Net current assets

 

2,975,182

2,373,408

Net assets

 

7,882,968

7,392,925

Capital and reserves

 

Called up share capital

20

101

101

Share premium reserve

3,524,999

3,524,999

Retained earning

4,357,868

3,867,825

Shareholders' funds

 

7,882,968

7,392,925

The company made a profit after tax for the financial year of £3,490,043 (2022 - profit of £3,835,528).

Approved and authorised by the Board on 10 October 2024 and signed on its behalf by:
 

.........................................
B E Isard
Director

 

Holmestone Ltd

Consolidated Statement of Changes in Equity for the Year Ended 31 December 2023
Equity attributable to the parent company

Share capital
£

Share premium
£

Non-distributable reserve
£

Merger reserve
£

Other reserves
£

Retained earning
£

Total
£

Non- controlling interests
£

Total equity
£

At 1 January 2023

101

3,524,999

3,202,202

8,150,957

(215,894)

8,327,922

22,990,287

15,288,745

38,279,032

Profit/(loss) for the year

-

-

-

-

-

13,434,421

13,434,421

(195,911)

13,238,510

Dividends

-

-

-

-

-

(8,876,585)

(8,876,585)

-

(8,876,585)

Transfers

-

-

(3,202,202)

-

-

3,202,202

-

-

-

Other movements on reserves

-

-

-

-

(125,317)

-

(125,317)

-

(125,317)

At 31 December 2023

101

3,524,999

-

8,150,957

(341,211)

16,087,960

27,422,806

15,092,834

42,515,640

 

Holmestone Ltd

Consolidated Statement of Changes in Equity for the Year Ended 31 December 2023 (continued)
Equity attributable to the parent company

Share capital
£

Share premium
£

Revaluation reserve
£

Merger reserve
£

Other reserves
£

Retained earning
£

Total
£

Non- controlling interests
£

Total equity
£

At 1 January 2022

101

3,524,999

3,202,202

8,150,957

(87,273)

4,942,662

19,733,648

13,851,611

33,585,259

Profit for the year

-

-

-

-

-

9,212,824

9,212,824

1,437,134

10,649,958

Dividends

-

-

-

-

-

(5,827,564)

(5,827,564)

-

(5,827,564)

Other movements on reserves

-

-

-

-

(128,621)

-

(128,621)

-

(128,621)

At 31 December 2022

101

3,524,999

3,202,202

8,150,957

(215,894)

8,327,922

22,990,287

15,288,745

38,279,032

 

Holmestone Ltd

Consolidated Statement of Cash Flows for the Year Ended 31 December 2023

Note

31.12.23
£

31.12.22
£

Cash flows from operating activities

Profit for the year

 

13,238,510

10,649,958

Adjustments to cash flows from non-cash items

 

Depreciation and amortisation

4

1,058,417

1,089,878

Profit on disposal of tangible assets

-

(21,735)

Share of operating profit in associates

 

(75,690)

(48,794)

Finance Costs

 

69,960

52,382

Finance Income

 

57,650

63,965

 

14,348,847

11,785,654

Working capital adjustments

 

Increase in stocks

14

(1,078,766)

(1,008,268)

Increase in trade debtors

 

(2,550,887)

(4,526)

Increase in trade creditors

 

(921,514)

(328,037)

Increase in provisions

18

131,022

121,568

Cash generated from operations

 

9,928,702

10,566,391

Interest paid

 

(69,960)

(52,383)

Income taxes paid

9

(2,600,000)

(1,380,548)

Net cash flow from operating activities

 

7,258,742

9,133,460

Cash flows from investing activities

 

Purchase of tangible fixed assets

 

(427,828)

(550,350)

Interest received

 

57,650

63,965

Dividends received

 

3,607,724

3,941,555

Net cash flows from investing activities

 

3,237,546

3,455,170

Cash flows from financing activities

 

Equity dividends paid

 

(8,876,584)

(9,669,118)

Net increase in cash and cash equivalents

 

1,619,704

2,919,512

Cash and cash equivalents at 1 January

 

6,595,219

3,675,707

Cash and cash equivalents at 31 December

 

8,214,923

6,595,219

 

Holmestone Ltd

Notes to the Financial Statements for the Year Ended 31 December 2023

1

General information

The company is a private company limited by share capital, incorporated in England and Wales.

The address of its registered office is:
Savoy House
Savoy Circus
London
W3 7DA
England

These financial statements were authorised for issue by the Board on 10 October 2024.

2

Accounting policies

Summary of significant accounting policies and key accounting estimates

The principal accounting policies applied in the preparation of these financial statements are set out below. These policies have been consistently applied to all the years presented, unless otherwise stated.

Statement of compliance

These financial statements were prepared in accordance with Financial Reporting Standard 102 'The Financial Reporting Standard applicable in the United Kingdom and Republic of Ireland and the Companies Act 2006'.

Basis of preparation

These financial statements have been prepared using the historical cost convention except that as disclosed in the accounting policies certain items are shown at fair value.

The presentational currency is Pound Sterling (£).

Basis of consolidation

The consolidated financial statements consolidate the financial statements of the company and its subsidiary undertakings drawn up to 31 December 2023.

 

Holmestone Ltd

Notes to the Financial Statements for the Year Ended 31 December 2023 (continued)

2

Accounting policies (continued)

A subsidiary is an entity controlled by the company. Control is achieved where the company has the power to govern the financial and operating policies of an entity so as to obtain benefits from its activities.

The results of subsidiaries acquired or disposed of during the year are included in the Profit and Loss Account from the effective date of acquisition or up to the effective date of disposal, as appropriate. Where necessary, adjustments are made to the financial statements of subsidiaries to bring their accounting policies into line with those used by the group.

The purchase method of accounting is used to account for business combinations that result in the acquisition of subsidiaries by the group. The cost of a business combination is measured as the fair value of the assets given, equity instruments issued and liabilities incurred or assumed at the date of exchange, plus costs directly attributable to the business combination. Identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are measured initially at their fair values at the acquisition date. Any excess of the cost of the business combination over the acquirer’s interest in the net fair value of the identifiable assets, liabilities and contingent liabilities recognised is recorded as goodwill.

Inter-company transactions, balances and unrealised gains on transactions between the company and its subsidiaries, which are related parties, are eliminated in full.

Intra-group losses are also eliminated but may indicate an impairment that requires recognition in the consolidated financial statements.

Accounting policies of subsidiaries have been changed where necessary to ensure consistency with the policies adopted by the group. Non-controlling interests in the net assets of consolidated subsidiaries are identified separately from the group’s equity therein. Non-controlling interests consist of the amount of those interests at the date of the original business combination and the non-controlling shareholder’s share of changes in equity since the date of the combination.

Revenue recognition

Turnover comprises the fair value of the consideration received or receivable for the sale of goods and provision of services in the ordinary course of the group’s activities. Turnover is shown net of sales/value added tax, returns, rebates and discounts and after eliminating sales within the group.

The group recognises revenue when:
The amount of revenue can be reliably measured;
it is probable that future economic benefits will flow to the entity;
and specific criteria have been met for each of the group's activities.

Foreign currency transactions and balances

Transactions in foreign currencies are initially recorded at the functional currency rate prevailing at the date of the transaction. Monetary assets and liabilities denominated in foreign currencies are retranslated into the respective functional currency of the entity at the rates prevailing on the reporting period date. Non-monetary items carried at fair value that are denominated in foreign currencies are retranslated at the rate on the date when the fair value is re-measured.

Non-monetary items measured in terms of historical cost in a foreign currency are not retranslated.

 

Holmestone Ltd

Notes to the Financial Statements for the Year Ended 31 December 2023 (continued)

2

Accounting policies (continued)

Tax

The tax expense for the period comprises current and deferred tax. Tax is recognised in profit or loss, except that a change attributable to an item of income or expense recognised as other comprehensive income is also recognised directly in other comprehensive income.

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 taxable income.

Deferred tax is recognised in respect of all timing differences between taxable profits and profits reported in the consolidated financial statements.

Unrelieved tax losses and other deferred tax assets are recognised when it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits.

Deferred tax is measured using the tax rates and laws that have been enacted or substantively enacted by the reporting date and that are expected to apply to the reversal of the timing difference.

Tangible assets

Tangible assets are stated in the balance sheet at cost, less any subsequent accumulated depreciation and subsequent accumulated impairment losses.

The cost of tangible assets includes directly attributable incremental costs incurred in their acquisition and installation.

Depreciation

Depreciation is charged so as to write off the cost of assets, other than land and properties under construction over their estimated useful lives, as follows:

Asset class

Depreciation method and rate

Computer equipment

33% straight line basis

Plant and machinery

15% straight line basis

Fixtures and fittings

15% straight line basis

Motor vehicles

25% straight line basis

Investment property

Investment properties are shown at most recent valuation. Any aggregate surplus or deficit arising from changes in fair value is recognised in profit and loss account.

Investment properties are accounted as follows:

1. Investment properties are initially recognised at cost which includes purchase cost and any directly attributable expenditure.
2. Investment properties whose fair value can be measured reliably are measured at fair value. The surplus or deficit on revaluation is recognised in the profit and loss account accumulated in the profit and loss reserve unless a deficit below original cost, or its reversal, on an indiviudal investment property is expected to ber permanent, in whcih case it is recognised in the profit and loss account for the year.

 

Holmestone Ltd

Notes to the Financial Statements for the Year Ended 31 December 2023 (continued)

2

Accounting policies (continued)

Goodwill

Goodwill is amortised over its expected useful life which is estimated to be ten years.
Goodwill is assessed for impairment when there are indicators of impairment and any impairment is charged to the income statement. No reversals of impariment are recognised.

Intangible assets

Intangible assets are initially measured at cost. After initial recognition, intangible assets are measured at cost less any accumulated amortisation and any accumulated impairment losses.

Patent and licenses are being amortisied evenly over their estimated usefule life of nil years.

Development costs are being amortised evenly over their estimated useful life of nil years.

Investments

Investments in equity shares which are publicly traded or where the fair value can be measured reliably are initially measured at fair value, with changes in fair value recognised in profit or loss. Investments in equity shares which are not publicly traded and where fair value cannot be measured reliably are measured at cost less impairment.

Interest income on debt securities, where applicable, is recognised in income using the effective interest method. Dividends on equity securities are recognised in income when receivable.

Cash and cash equivalents

Cash and cash equivalents comprise cash on hand and call deposits, and other short-term highly liquid investments that are readily convertible to a known amount of cash and are subject to an insignificant risk of change in value.

Trade debtors

Trade debtors are amounts due from customers for merchandise sold or services performed in the ordinary course of business.

Trade debtors are recognised initially at the transaction price. They are subsequently measured at amortised cost using the effective interest method, less provision for impairment. A provision for the impairment of trade debtors is established when there is objective evidence that the group will not be able to collect all amounts due according to the original terms of the receivables.

Stocks

Stocks are stated at the lower of cost and estimated selling price less costs to complete and sell. Cost is determined using the first-in, first-out (FIFO) method.

The cost of finished goods and work in progress comprises direct materials and, where applicable, direct labour costs and those overheads that have been incurred in bringing the inventories to their present location and condition. At each reporting date, stocks are assessed for impairment. If stocks are 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.

 

Holmestone Ltd

Notes to the Financial Statements for the Year Ended 31 December 2023 (continued)

2

Accounting policies (continued)

Trade creditors

Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Accounts payable are classified as current liabilities if the group does not have an unconditional right, at the end of the reporting period, to defer settlement of the creditor for at least twelve months after the reporting date. If there is an unconditional right to defer settlement for at least twelve months after the reporting date, they are presented as non-current liabilities.

Trade creditors are recognised initially at the transaction price and subsequently measured at amortised cost using the effective interest method.

Borrowings

Interest-bearing borrowings are initially recorded at fair value, net of transaction costs. Interest-bearing borrowings are subsequently carried at amortised cost, with the difference between the proceeds, net of transaction costs, and the amount due on redemption being recognised as a charge to the profit and loss account over the period of the relevant borrowing.

Interest expense is recognised on the basis of the effective interest method and is included in interest payable and similar charges.

Borrowings are classified as current liabilities unless the group has an unconditional right to defer settlement of the liability for at least twelve months after the reporting date.

Provisions

Provisions are recognised when the group has an obligation at the reporting date as a result of a past event, it is probable that the group will be required to settle that obligation and a reliable estimate can be made of the amount of the obligation.

Leases

Leases in which substantially all the risks and rewards of ownership are retained by the lessor are classified as operating leases. Payments made under operating leases are charged to profit or loss on a straight-line basis over the period of the lease.

Share capital

Ordinary shares are classified as equity. Equity instruments are measured at the fair value of the cash or other resources received or receivable, net of the direct costs of issuing the equity instruments. If payment is deferred and the time value of money is material, the initial measurement is on a present value basis.

Dividends

Dividend distribution to the group’s shareholders is recognised as a liability in the financial statements in the reporting period in which the dividends are declared.

Defined contribution pension obligation

A defined contribution plan is a pension plan under which fixed contributions are paid into a pension fund and the group has no legal or constructive obligation to pay further contributions even if the fund does not hold sufficient assets to pay all employees the benefits relating to employee service in the current and prior periods.

Contributions to defined contribution plans are recognised as employee benefit expense when they are due. If contribution payments exceed the contribution due for service, the excess is recognised as a prepayment.

 

Holmestone Ltd

Notes to the Financial Statements for the Year Ended 31 December 2023 (continued)

3

Revenue

The analysis of the group's Turnover for the year from continuing operations is as follows:

31.12.23
£

31.12.22
£

Sale of goods

36,758,516

31,657,151

4

Operating profit

Arrived at after charging/(crediting)

31.12.23
£

31.12.22
£

Depreciation expense

237,408

181,127

Amortisation expense

821,009

908,751

Research and development cost

440,247

456,579

Foreign exchange losses/(gains)

179,482

(297,625)

Operating lease expense - plant and machinery

69,361

64,749

Profit on disposal of property, plant and equipment

-

(21,735)

5

Other interest receivable and similar income

31.12.23
£

31.12.22
£

Interest income on bank deposits

57,650

63,965

6

Interest payable and similar expenses

31.12.23
£

31.12.22
£

Interest on bank overdrafts and borrowings

13

18

Interest expense on other finance liabilities

55,906

59,889

Foreign exchange gains

13,771

29,677

69,690

89,584

7

Staff costs

The aggregate payroll costs (including directors' remuneration) were as follows:

 

Holmestone Ltd

Notes to the Financial Statements for the Year Ended 31 December 2023 (continued)

7

Staff costs (continued)

31.12.23
£

31.12.22
£

Wages and salaries

6,393,705

5,690,555

Social security costs

388,942

372,132

Other short-term employee benefits

4,727

-

Pension costs, defined contribution scheme

306,566

101,165

Other employee expense

239,592

493,475

7,333,532

6,657,327

The average number of persons employed by the group (including directors) during the year, analysed by category was as follows:

31.12.23
No.

31.12.22
No.

Production

92

82

Administration and support

50

45

Sales

20

18

162

145

8

Auditors' remuneration

31.12.23
£

31.12.22
£

Audit of these financial statements

41,000

30,050


 

9

Taxation

Tax charged/(credited) in the consolidated profit and loss account

31.12.23
£

31.12.22
£

Current taxation

UK corporation tax

2,816,918

1,535,847

Deferred taxation

Arising from origination and reversal of timing differences

31,664

97,524

Tax expense in the income statement

2,848,582

1,633,371

The tax on profit before tax for the year is the same as the standard rate of corporation tax in the UK (2022 - the same as the standard rate of corporation tax in the UK) of 0% (2022 - 19%).

The differences are reconciled below:

 

Holmestone Ltd

Notes to the Financial Statements for the Year Ended 31 December 2023 (continued)

9

Taxation (continued)

31.12.23
£

31.12.22
£

Profit before tax

16,087,092

12,283,329

Corporation tax at standard rate

2,818,442

1,670,907

Tax increase/(decrease) from effect of capital allowances and depreciation

38,826

(3,897)

Tax decrease from effect of adjustment in research and development tax credit

(41,962)

(45,429)

Tax increase from other tax effects

33,276

11,790

Total tax charge

2,848,582

1,633,371

 

Holmestone Ltd

Notes to the Financial Statements for the Year Ended 31 December 2023 (continued)

10

Intangible assets

Group

Goodwill
 £

Trademarks, patents and licenses
 £

Internally generated software development costs
 £

Other intangible assets
 £

Cost or valuation

At 1 January 2023

15,018,350

143,105

754,666

421,530

At 31 December 2023

15,018,350

143,105

754,666

421,530

Amortisation

At 1 January 2023

5,468,133

143,105

754,666

208,987

Amortisation charge

821,008

-

-

90,875

At 31 December 2023

6,289,141

143,105

754,666

299,862

Carrying amount

At 31 December 2023

8,729,209

-

-

121,668

At 31 December 2022

9,550,216

-

-

214,978

Total
£

Cost or valuation

At 1 January 2023

16,337,651

At 31 December 2023

16,337,651

Amortisation

At 1 January 2023

6,574,891

Amortisation charge

911,883

At 31 December 2023

7,486,774

Carrying amount

At 31 December 2023

8,850,877

At 31 December 2022

9,765,194

 

Holmestone Ltd

Notes to the Financial Statements for the Year Ended 31 December 2023 (continued)

11

Tangible assets

Group

Land and buildings
£

Fixtures and fittings
£

Plant and machinery
£

Office equipment
£

Cost or valuation

At 1 January 2023

4,524,301

262,657

2,600,274

344,355

Additions

322,226

30,247

14,603

60,752

At 31 December 2023

4,846,527

292,904

2,614,877

405,107

Depreciation

At 1 January 2023

545,792

201,269

2,256,584

298,299

Charge for the year

62,096

17,189

41,121

37,453

At 31 December 2023

607,888

218,458

2,297,705

335,752

Carrying amount

At 31 December 2023

4,238,639

74,446

317,172

69,355

At 31 December 2022

3,979,493

66,578

340,942

40,592

Motor vehicles
 £

Total
£

Cost or valuation

At 1 January 2023

159,498

7,891,085

Additions

-

427,828

At 31 December 2023

159,498

8,318,913

Depreciation

At 1 January 2023

135,254

3,437,198

Charge for the year

14,795

172,654

At 31 December 2023

150,049

3,609,852

Carrying amount

At 31 December 2023

9,449

4,709,061

At 31 December 2022

46,535

4,474,140

12

Investment properties

Group

 

Holmestone Ltd

Notes to the Financial Statements for the Year Ended 31 December 2023 (continued)

12

Investment properties (continued)

31.12.23
£

At 1 January 2020

6,830,000

At 31 December 2020

6,830,000

13

Investments

Group

Details of undertakings

Details of the investments (including principal place of business of unincorporated entities) in which the group holds 20% or more of the nominal value of any class of share capital are as follows:

Undertaking

Registered office

Holding

Proportion of voting rights and shares held

     

2023

2022

Subsidiary undertakings

E2S Group Ltd

Savoy House, Savoy Circus, 78 Old Oak Common Lane, London, W3 7DA

Ordinary A

53.33%

53.33%

 

United Kingdom

     

European Safety Systems Limited

Impress House, Mansell Road, Acton, London W3 7QH

Ordinary (held indirectly)

53.33%

53.33%

 

United Kingdom

     

E2S Holdings Inc

11777 Katy Freeway, Suite 395, Houston, Texas 77079

Ordinary (held indrectly)

53.33%

53.33%

 

USA

     

E2S Warnsignaltechnik UG

Charlottenstrasse 45-51, 72764 Reutlingen

Ordinary (held indirectly)

53.33%

53.33%

 

Germany

     

E2S Warning Signals LLC

11777 Katy Freeway, Suite 395, Houston, Texas 77079

Ordinary (held indrectly)

53.33%

53.33%

 

USA

     

Foxley Estates Limited

78-80 Old OAk Common Lane, Savoy House, Savoy Circus, London W3 7DA

Ordinary (held indrectly)

42.66%

42.66%

 

United Kingdom

     

Applications Elecroniques et Technique SAS

4 Impasse Joliot Curie 64110 Jurancon

Ordinary

53.33%

53.33%

 

France

     
 

Holmestone Ltd

Notes to the Financial Statements for the Year Ended 31 December 2023 (continued)

13

Investments (continued)

Undertaking

Registered office

Holding

Proportion of voting rights and shares held

Signal Sources LLC

11767 Katy Freeway, 1100 Houston TX 77079

N/A

53.33%

53.33%

 

USA

     

Associates

European Circuit Solutions Limited

Impress House, Mansell Road, Acton, London W3 7QH

Ordinary

25%

25%

 

United Kingdom

     

 

Holmestone Ltd

Notes to the Financial Statements for the Year Ended 31 December 2023 (continued)

13

Investments (continued)

Company

31.12.23
£

31.12.22
£

Investments in subsidiaries

4,901,336

4,901,336

Investments in associates

-

111,731

Other investments

6,450

6,450

4,907,786

5,019,517

Subsidiaries

£

Cost or valuation

At 1 January 2023

4,901,336

Provision

Carrying amount

At 31 December 2023

4,901,336

At 31 December 2022

4,901,336

14

Stocks

 

Group

Company

31.12.23
£

31.12.22
£

31.12.23
£

31.12.22
£

Finished goods and goods for resale

1,148,496

1,139,701

-

-

Raw materials

6,276,372

5,206,401

-

-

7,424,868

6,346,102

-

-

 

Holmestone Ltd

Notes to the Financial Statements for the Year Ended 31 December 2023 (continued)

15

Debtors

   

Group

Company

Current

Note

31.12.23
£

31.12.22
£

31.12.23
£

31.12.22
£

Trade debtors

 

7,498,329

4,947,442

-

-

Amounts owed by related parties

-

-

196,666

432,819

Other debtors

 

6,082,157

6,409,415

1,870

14

Prepayments

 

328,977

298,463

-

-

Income tax asset

9

4,946

5,046

4,946

5,046

   

13,914,409

11,660,366

203,482

437,879

16

Cash and cash equivalents

 

Group

Company

31.12.23
£

31.12.22
£

31.12.23
£

31.12.22
£

Cash on hand

2,056

5,322

-

-

Cash at bank

8,212,867

6,589,897

4,243,849

3,045,443

8,214,923

6,595,219

4,243,849

3,045,443

17

Creditors

   

Group

Company

Note

31.12.23
£

31.12.22
£

31.12.23
£

31.12.22
£

Due within one year

 

Trade creditors

 

2,243,026

1,805,261

-

-

Amounts due to related parties

2,344,007

2,920,326

1,379,601

1,012,957

Social security and other taxes

 

249,844

318,055

-

-

Other payables

 

312,651

390,005

82,398

88,457

Accruals

 

633,523

796,107

10,150

8,500

Income tax liability

9

1,139,883

735,212

-

-

 

6,922,934

6,964,966

1,472,149

1,109,914

 

Holmestone Ltd

Notes to the Financial Statements for the Year Ended 31 December 2023 (continued)

18

Provisions for liabilities

Group

Warranties
£

Deferred tax
£

Other provisions
£

Total
£

At 1 January 2023

464,281

1,241,056

40,060

1,745,397

Increase (decrease) in existing provisions

79,870

31,663

51,152

162,685

At 31 December 2023

544,151

1,272,719

91,212

1,908,082

19

Pension and other schemes

Defined contribution pension scheme

The group operates a defined contribution pension scheme. The pension cost charge for the year represents contributions payable by the group to the scheme and amounted to £297,431 (2022 - £127,263 )

20

Share capital

Allotted, called up and fully paid shares

31.12.23

31.12.22

No.

£

No.

£

Ordinary of £1 each

101

101

101

101

       

21

Dividends

31.12.23

31.12.22

£

£

Interim dividend of £87,887 (2022 - £57,699) per ordinary share

8,876,584

5,827,563