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Registered number: 08835557










EXHEAT GROUP LIMITED










ANNUAL REPORT AND FINANCIAL STATEMENTS

FOR THE PERIOD ENDED 25 AUGUST 2023

 
EXHEAT  GROUP LIMITED
 
 
COMPANY INFORMATION


Directors
P B Smithers 
R V Smithers 
Z Meadows 
R J Coss 




Company secretary
Z Meadows



Registered number
08835557



Registered office
17 Old Millers Wharf
Fishergate

Norwich

Norfolk

NR3 1GS




Trading Address
Threxton House
Threxton Road Industrial Estate

Watton

Thetford

Norfolk

IP25 6NG






Independent auditors
Larking Gowen LLP
Chartered Accountants & Statutory Auditors

1st Floor, Prospect House

Rouen Road

Norwich

NR1 1RE





 
EXHEAT  GROUP LIMITED
 

CONTENTS



Page
Group strategic report
 
1 - 2
Directors' report
 
3 - 5
Independent auditors' report
 
6 - 9
Consolidated statement of comprehensive income
 
10
Consolidated statement of financial position
 
11 - 12
Company statement of financial position
 
13 - 14
Consolidated statement of changes in equity
 
15
Company statement of changes in equity
 
16
Consolidated statement of cash flows
 
17 - 18
Consolidated analysis of net debt
 
19
Notes to the financial statements
 
20 - 48


 
EXHEAT  GROUP LIMITED
 
 
GROUP STRATEGIC REPORT
FOR THE PERIOD ENDED 25 AUGUST 2023

Introduction
 
The directors present their strategic report for Exheat Group Limited (the Company) and its subsidiaries (the Group) for the period ended 25 August 2023. 

Business model

Through its trading subsidiaries EXHEAT Group is a globally renowned designer and manufacture of electric process heating and control systems:
Engineered heating systems
Our experience in the design of electric heaters for use in hazardous area locations is second to none. Our complete range of custom-engineered process and immersion heaters have extensive IECEx, ATEX and CSA certification.
Control systems
EXHEAT Group’s control systems, MCCs and modular systems are manufactured at our state of the art facilities in the United Kingdom. All our systems are built to comply with any standards and specifications required by our clients, and can be offered in numerous painted finishes to the client’s exact requirements.
The Group continues its focus on supplying equipment to assist customers to reduce or eliminate carbon emissions by electrification. 

Business review
 
Demand for electrical process heating systems continued to increase throughout 2023, this has lead to an improved pipeline of work for 2024 and beyond. As a result of this, turnover increased from £24,430,618 to £33,242,305 and gross profit increased from £8,161,344 to £12,405,420. The directors are satisfied with the underlying performance of the Group during the year and the profit for the financial year of £2,492,463 (2022 – loss of £538,413), in light of the challenging economic conditions in the wider economy.

Page 1

 
EXHEAT  GROUP LIMITED
 

GROUP STRATEGIC REPORT (CONTINUED)
FOR THE PERIOD ENDED 25 AUGUST 2023

Principal risks and uncertainties
 
Oil price
A prolonged downturn in oil prices would have a negative effect on the markets for our products and it is likely there would be a consequential impact on the profitability of the Group. This risk is mitigated by monitoring our quoting activity, our current order load and ensuring that our overhead base is sufficiently flexible to match our expected levels of profitability in future months and years.
 
Foreign exchange risk
The worldwide nature of the markets that we serve means we are exposed to the risk of significant changes in foreign exchange rates, in particular the Euro and US Dollar. This risk is mitigated by the use of natural hedges in matching currency received from customers with payments to our suppliers. Any remaining exposure is covered via forward contracts fixing exchange rates at the time of accepting significant projects from our customers. 
 
Competition
The hazardous area electrical heating and control market is a highly competitive environment. To mitigate this risk the board therefore continually monitors the activities of our main competitors and ensures our continued focus on delivering consistently high quality products with first class service and support to all of our customers.
Global supply chain challenges 
The Group is reliant on sourcing components from across the world and as such is exposed to the risk of disruptions to global supply chains. We mitigate this by working closely with key suppliers to ensure full visibility of lead times throughout the order cycle, maintaining the ability to make alternative arrangements if required. 

Key performance indicators
 
                                                      2023   2022 
Gross margin    37.3%   33.4%  
Gross margin is the ratio of gross profit and turnover expressed as a percentage. Gross margin has increased slightly due to the mix of projects being invoiced.  
EBITDA     £3,836,783  
£646,136
EBITDA is earnings before interest, taxation, amortisation, depreciation and profit/(loss) on the sale of fixed assets. This has increased as a result of the imroved level of turnover. 
Headcount     249   
246 
Average number of employees. This has increased primarily as a result of unfilled positions being recruited. 


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



Z Meadows
Director

Date: 20 November 2024

Page 2

 
EXHEAT  GROUP LIMITED
 
 
 
DIRECTORS' REPORT
FOR THE PERIOD ENDED 25 AUGUST 2023

The directors present their report and the financial statements for the period ended 25 August 2023.

Principal activity

The Company's principal activity is to act as a holding company for the Exheat Group whose principal activities are that of engineering and the manufacture of hazardous area and other electrical heating and control equipment and the manufacture of safety signage.

Directors

The directors who served during the period were:

P B Smithers 
R V Smithers 
Z Meadows 
R J Coss 

Results and dividends

The profit for the period, after taxation, amounted to £2,492,463 (2022 - loss £538,413).

The directors do not recommend the payment of a dividend.

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;

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.

Page 3

 
EXHEAT  GROUP LIMITED
 
 
 
DIRECTORS' REPORT (CONTINUED)
FOR THE PERIOD ENDED 25 AUGUST 2023

Future developments

The Group will continue to undertake measures to optimise its trading performance in slightly improving markets, to protect margins and EBITDA, whilst retaining and augmenting talent to ensure it is well placed to take advantage of future market developments. 

Financial instruments

The Group's principal financial instruments include trade debtors, creditors and forward currency contracts.
The Group manages its cash requirements centrally to maximise interest income, whilst ensuring that the Group has sufficient liquid resources to meet the operating needs of its business.
The Group's principal foreign currency exposures arise from trading overseas. The Group manages this through forward currency contracts where considered appropriate. 
The Group is subject to credit risk. All customers who wish to trade on credit terms are subjected to verification procedures and letters of credit are used when considered necessary. Receivables are monitored on an on-going basis and provision is made for doubtful debts when necessary. 

Research and development activities

The Group continues to invest in the development of its products via innovative technology advancements and offering bespoke engineered solutions to meet customers needs.

Qualifying third party indemnity provisions

Qualifying third party indemnity provision was in place for the benefit of all the directors of the Group.

Auditors

The auditorsLarking Gowen LLPwill be proposed for reappointment in accordance with section 485 of the Companies Act 2006.

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.

Page 4

 
EXHEAT  GROUP LIMITED
 
 
 
DIRECTORS' REPORT (CONTINUED)
FOR THE PERIOD ENDED 25 AUGUST 2023


Post balance sheet events

There have been no significant events affecting the Group since the year end.

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





Z Meadows
Director

Date: 20 November 2024

Page 5

 
EXHEAT  GROUP LIMITED
 
 
 
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF EXHEAT  GROUP LIMITED
 

Opinion


We have audited the financial statements of Exheat  Group Limited (the 'parent Company') and its subsidiaries (the 'Group') for the period ended 25 August 2023, which comprise the Consolidated statement of comprehensive income, the Consolidated statement of financial position, the Company statement of financial position, the Consolidated statement of cash flows, the Consolidated statement of changes in equity, the Company statement of changes in equity 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 the parent Company's affairs as at 25 August 2023 and of the Group's profit for the period 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 6

 
EXHEAT  GROUP LIMITED
 
 
 
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF EXHEAT  GROUP 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 period 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.


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 7

 
EXHEAT  GROUP LIMITED
 
 
 
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF EXHEAT  GROUP 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:

Due to the field in which the Group operates, we identified the areas most likely to have a direct material impact on the financial statements as compliance with UK accounting standards, UK tax legislation and the Companies Act 2006. In addition, we considered the provisions of other laws and regulations which whilst not having a direct impact on the financial statements, are fundamental to the Group's ability to operate including health and safety; employment law, and compliance with various other regulations relevant to the operation of the Group's factories.
 
Our approach to identifying and assessing the risk of material misstatement in respect of irregularities including fraud and non-compliance with laws and regulations, included the following:
Enquiries with management about any known or suspected instances of non-compliance with laws and regulations, accidents in the workplace, potential litigation or claims and fraud;
Reviewing legal and professional fees to confirm all matters where the Group engaged lawyers during the year;
Reviewing financial statement disclosures and testing to supporting documentation to assess compliance with applicable laws and regulations;
Reviewing board minutes and any relevant correspondence with external authorities;
Challenging assumptions and judgements made by management in their significant accounting estimates; and
Auditing the risk of management override of controls, including through testing journal entries and other adjustments for appropriateness, and evaluating the business rationale of significant transactions outside the normal course of business.


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 8

 
EXHEAT  GROUP LIMITED
 
 
 
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF EXHEAT  GROUP 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.





John Atkins ACA FCCA (Senior statutory auditor)
  
for and on behalf of
Larking Gowen LLP
 
Chartered Accountants &
Statutory Auditors
  
Norwich

 
Date: 
20 November 2024
Page 9

 
EXHEAT  GROUP LIMITED
 
 
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE PERIOD ENDED 25 AUGUST 2023

2023
2022
Note
£
£

  

Turnover
 4 
33,242,305
24,430,618

Cost of sales
  
(20,836,885)
(16,269,274)

Gross profit
  
12,405,420
8,161,344

Distribution costs
  
(579,040)
(208,942)

Administrative expenses
  
(8,598,023)
(7,831,397)

Other operating income
 5 
51,663
28,203

Operating profit
 6 
3,280,020
149,208

Interest receivable and similar income
 10 
225,608
185,515

Interest payable and similar expenses
 11 
(648,721)
(632,440)

Other finance income
 12 
37,461
10,813

Profit/(loss) before taxation
  
2,894,368
(286,904)

Tax on profit/(loss)
 13 
(401,905)
(251,509)

Profit/(loss) for the financial period
  
2,492,463
(538,413)

  

Unrealised surplus/(deficit) on revaluation of freehold property
  
257,000
(186,854)

Deferred tax movement on revaluation of freehold property
  
(49,772)
-

Currency translation differences
  
(39,577)
(62,182)

Other comprehensive income for the period
  
167,651
(249,036)

Total comprehensive income for the period
  
2,660,114
(787,449)

Profit/(loss) for the period attributable to:
  

Owners of the parent Company
  
2,492,463
(538,413)

Total comprehensive income for the period attributable to:
  

Owners of the parent Company
  
2,660,114
(787,449)

The notes on pages 20 to 48 form part of these financial statements.

Page 10

 
EXHEAT  GROUP LIMITED
REGISTERED NUMBER: 08835557

CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 25 AUGUST 2023

25 August
26 August
2023
2022
Note
£
£

Fixed assets
  

Intangible assets
 14 
3,190,087
3,457,558

Tangible assets
 15 
4,096,263
3,784,111

  
7,286,350
7,241,669

Current assets
  

Stocks
 17 
10,867,531
8,465,811

Debtors: amounts falling due within one year
 18 
18,504,027
16,389,199

Cash at bank and in hand
 19 
8,953,571
9,378,514

  
38,325,129
34,233,524

Creditors: amounts falling due within one year
 20 
(29,211,367)
(27,692,152)

Net current assets
  
 
 
9,113,762
 
 
6,541,372

Total assets less current liabilities
  
16,400,112
13,783,041

Creditors: amounts falling due after more than one year
 21 
(6,227)
(10,440)

Provisions for liabilities
  

Deferred taxation
 23 
(356,691)
(344,524)

Other provisions
 24 
(650,786)
(701,783)

  
 
 
(1,007,477)
 
 
(1,046,307)

Net assets
  
15,386,408
12,726,294

Page 11

 
EXHEAT  GROUP LIMITED
REGISTERED NUMBER: 08835557
    
CONSOLIDATED STATEMENT OF FINANCIAL POSITION (CONTINUED)
AS AT 25 AUGUST 2023

25 August
26 August
2023
2022
Note
£
£

Capital and reserves
  

Called up share capital 
 25 
1,901
1,901

Revaluation reserve
 26 
436,874
229,646

Merger reserve
 26 
12,398,100
12,398,100

Profit and loss account
 26 
2,549,533
96,647

Equity attributable to owners of the parent Company
  
15,386,408
12,726,294


The financial statements were approved and authorised for issue by the board and were signed on its behalf by: 




Z Meadows
Director

Date: 20 November 2024

The notes on pages 20 to 48 form part of these financial statements.

Page 12

 
EXHEAT  GROUP LIMITED
REGISTERED NUMBER: 08835557

COMPANY STATEMENT OF FINANCIAL POSITION
AS AT 25 AUGUST 2023

25 August
26 August
2023
2022
Note
£
£

Fixed assets
  

Tangible assets
 15 
76,277
72,414

Investments
 16 
19,499,989
19,499,989

  
19,576,266
19,572,403

Current assets
  

Stocks
 17 
25,783
19,964

Debtors: amounts falling due within one year
 18 
7,254,076
6,088,221

Cash at bank and in hand
 19 
214,362
681,212

  
7,494,221
6,789,397

Creditors: amounts falling due within one year
 20 
(16,400,461)
(15,602,095)

Net current liabilities
  
 
 
(8,906,240)
 
 
(8,812,698)

Total assets less current liabilities
  
10,670,026
10,759,705

Net assets
  
10,670,026
10,759,705


Capital and reserves
  

Called up share capital 
 25 
1,901
1,901

Merger reserve
 26 
12,398,100
12,398,100

Profit and loss account brought forward
  
(1,640,296)
925,309

Loss for the period

  

(89,679)
(2,565,605)

Profit and loss account carried forward
  
(1,729,975)
(1,640,296)

  
10,670,026
10,759,705


The financial statements were approved and authorised for issue by the board and were signed on its behalf by: 




Z Meadows
Director

Date: 20 November 2024

The notes on pages 20 to 48 form part of these financial statements.
Page 13

 
EXHEAT  GROUP LIMITED
REGISTERED NUMBER: 08835557
    
COMPANY STATEMENT OF FINANCIAL POSITION (CONTINUED)
AS AT 25 AUGUST 2023


Page 14

 
EXHEAT  GROUP LIMITED
 

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE PERIOD ENDED 25 AUGUST 2023


Called up share capital
Revaluation reserve
Merger reserve
Profit and loss account
Total equity

£
£
£
£
£


At 28 August 2021
1,901
416,500
12,398,100
697,242
13,513,743


Comprehensive income for the period

Loss for the period
-
-
-
(538,413)
(538,413)

Currency translation differences
-
-
-
(62,182)
(62,182)

Deficit on revaluation of freehold property
-
(186,854)
-
-
(186,854)
Total comprehensive income for the period
-
(186,854)
-
(600,595)
(787,449)



At 26 August 2022
1,901
229,646
12,398,100
96,647
12,726,294


Comprehensive income for the period

Profit for the period
-
-
-
2,492,463
2,492,463

Currency translation differences
-
-
-
(39,577)
(39,577)

Surplus on revaluation of freehold property
-
257,000
-
-
257,000

Deferred tax movement on revaluation of freehold property
-
(49,772)
-
-
(49,772)
Total comprehensive income for the period
-
207,228
-
2,452,886
2,660,114


At 25 August 2023
1,901
436,874
12,398,100
2,549,533
15,386,408


The notes on pages 20 to 48 form part of these financial statements.

Page 15

 
EXHEAT  GROUP LIMITED
 

COMPANY STATEMENT OF CHANGES IN EQUITY
FOR THE PERIOD ENDED 25 AUGUST 2023


Called up share capital
Merger reserve
Profit and loss account
Total equity

£
£
£
£


At 28 August 2021

1,901
12,398,100
925,309
13,325,310



Loss for the period
-
-
(2,565,605)
(2,565,605)


At 26 August 2022
1,901
12,398,100
(1,640,296)
10,759,705



Loss for the period
-
-
(89,679)
(89,679)


At 25 August 2023
1,901
12,398,100
(1,729,975)
10,670,026


The notes on pages 20 to 48 form part of these financial statements.

Page 16

 
EXHEAT  GROUP LIMITED
 

CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE PERIOD ENDED 25 AUGUST 2023

25 August
26 August
2023
2022
£
£

Cash flows from operating activities

Profit/(loss) for the financial period
2,492,463
(538,413)

Adjustments for:

Amortisation of intangible assets
267,471
269,671

Depreciation of tangible assets
251,831
216,444

Loss on disposal of tangible assets
-
6

Interest paid
648,721
632,440

Interest received
(225,608)
(185,515)

Taxation charge
401,905
251,509

Increase in stocks
(2,401,720)
(1,729,953)

Increase in debtors
(2,114,828)
(2,763,297)

Increase in creditors
1,556,312
4,866,757

(Decrease)/increase in provisions
(50,997)
115,531

Net fair value gains recognised in profit or loss
(37,461)
(10,813)

Corporation tax paid
(439,510)
(373,621)

Foreign exchange
(43,124)
(62,521)

Net cash generated from operating activities

305,455
688,225


Cash flows from investing activities

Purchase of tangible fixed assets
(303,436)
(361,635)

Sale of tangible fixed assets
-
185,515

Interest received
225,608
-

Net cash from investing activities

(77,828)
(176,120)
Page 17

 
EXHEAT  GROUP LIMITED
 

CONSOLIDATED STATEMENT OF CASH FLOWS (CONTINUED)
FOR THE PERIOD ENDED 25 AUGUST 2023

25 August
26 August

2023
2022

£
£



Cash flows from financing activities

Repayment of/new finance leases
(3,849)
11,867

Interest paid
(648,721)
(632,440)

Net cash used in financing activities
(652,570)
(620,573)

Net decrease in cash and cash equivalents
(424,943)
(108,468)

Cash and cash equivalents at beginning of period
9,378,514
9,486,982

Cash and cash equivalents at the end of period
8,953,571
9,378,514


Cash and cash equivalents at the end of period comprise:

Cash at bank and in hand
8,953,571
9,378,514


The notes on pages 20 to 48 form part of these financial statements.

Page 18

 
EXHEAT  GROUP LIMITED
 

CONSOLIDATED ANALYSIS OF NET DEBT
FOR THE PERIOD ENDED 25 AUGUST 2023




At 27 August 2022
Cash flows
At 25 August 2023
£

£

£

Cash at bank and in hand

9,378,514

(293,197)

9,085,317

Finance leases


(11,867)

3,849

(8,018)


9,366,647

(289,348)

9,077,299


The notes on pages 20 to 48 form part of these financial statements.

Page 19

 
EXHEAT  GROUP LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 25 AUGUST 2023

1.


General information

Exheat Group Limited is a private company limited by shares and incorporated in England and Wales, registration number 08835557. The registered office is 17 Old Millers Wharf, Fishergate, Norwich, Norfolk, NR3 1GS. The trading address is Threxton House, Threxton Road Industrial Estate, Watton, Thetford, Norfolk, IP25 6NG.

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 financial statements cover the period from 27 August 2022 to 25 August 2023 with the comparative figures being for the period 28 August 2021 to 26 August 2022.

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 comprehensive income 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 Group 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 either the purchase method or merger accounting where applicable.
Merger relief was applicable for the acquisition of certain subsidiaries of the Group. The cost of investment was recognised at the fair value of the net assets of the subsidiaries at the date of the merger, the nominal value of shares issued being as share capital and the balance within a merger reserve.
Other acquisitions were incorporated 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 comprehensive income from the date on which control is obtained. They are deconsolidated from the date control ceases.

Page 20

 
EXHEAT  GROUP LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 25 AUGUST 2023

2.Accounting policies (continued)

 
2.3

Going concern

The directors have considered the Group’s position at the time of signing the financial statements and have undertaken an exercise to forecast future profits and cash flows for the Group. The directors have also considered the current financial position of the Group, measures the directors could take to mitigate ongoing costs should they need to and the cash and financing facilities available to the Group. These include obtaining a letter of support from a related company that they will offer additional financial support to the Group and Company should this be required. This support will help the Company operate through its net current liabilities position at the balance sheet date.
Based on this, the directors have concluded that they have a reasonable expectation that the Company will have adequate resources to continue in operational existence for the foreseeable future, and at least twelve months from the date of signing these financial statements, they therefore continue to adopt the going concern basis of accounting in preparing these financial statements.

 
2.4

Foreign currency translation

Functional and presentation currency

The Group's functional and presentational currency is Sterling (£).

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 in profit or loss.

Foreign exchange gains and losses that relate to borrowings and cash and cash equivalents are presented in the Consolidated statement of comprehensive income within 'finance income or costs'. All other foreign exchange gains and losses are presented in profit or loss within 'other operating income'.

On consolidation, the results of overseas operations are translated into Sterling at rates approximating to those ruling when the transactions took place. All assets and liabilities of overseas operations are translated at the rate ruling at the reporting date. Exchange differences arising on translating the opening net assets at opening rate and the results of overseas operations at actual rate are recognised in other comprehensive income.

Page 21

 
EXHEAT  GROUP LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 25 AUGUST 2023

2.Accounting policies (continued)

 
2.5

Turnover

Turnover is recognised to the extent that it is probable that the economic benefits will flow to the Group and the turnover can be reliably measured. Turnover is measured as the fair value of the consideration received or receivable, excluding discounts, rebates, value added tax and other sales taxes. The following criteria must also be met before turnover is recognised:

Turnover is recognised at the point where the significant risks and rewards of ownership have been transferred to the buyer, in the majority of cases this is considered to be when the goods are ready for despatch. In some circumstances the Group is not entitled to a proportion of turnover until final documentation has been provided to the customer, therefore this proportion of turnover is recognised at the point final documentation has been provided. The nature of the Group's contracts with its customers is such that long term contract accounting is not applicable.
Turnover relating to recharges of centrally incurred costs and services is recognised on a straight line basis over the period to which the cost or service relates.       

 
2.6

Operating leases: the Group as lessee

Rentals paid under operating leases are charged to profit or loss on a straight-line basis over the lease term.

Benefits received and receivable as an incentive to sign an operating lease are recognised on a straight-line basis over the lease term, unless another systematic basis is representative of the time pattern of the lessee's benefit from the use of the leased asset.

 
2.7

Research and development

Research and development expenditure is charged to the Consolidated statement of income and retained earnings when it is incurred.

 
2.8

Government grants

Grants of a revenue nature are recognised in the Consolidated statement of comprehensive income in the same period as the related expenditure.

 
2.9

Interest income

Interest income is recognised in the Consolidated statement of income and retained earnings using the effective interest method.

 
2.10

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.

Page 22

 
EXHEAT  GROUP LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 25 AUGUST 2023

2.Accounting policies (continued)

 
2.11

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 the Consolidated statement of comprehensive income 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.

 
2.12

Current and deferred taxation

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

The current income tax charge is calculated on the basis of tax rates and laws that have been enacted or substantively enacted by the reporting date in the countries where the Company and the Group operate and generate income.

Deferred tax balances are recognised in respect of all timing differences that have originated but not reversed by the reporting date, except that:
The recognition of deferred tax assets is limited to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits;
Any deferred tax balances are reversed if and when all conditions for retaining associated tax allowances have been met; and
Where they relate to timing differences in respect of interests in subsidiaries, associates, branches and joint ventures and the Group can control the reversal of the timing differences and such reversal is not considered probable in the foreseeable future.

Deferred tax balances are not recognised in respect of permanent differences except in respect of business combinations, when deferred tax is recognised on the differences between the fair values of assets acquired and the future tax deductions available for them and the differences between the fair values of liabilities acquired and the amount that will be assessed for tax. Deferred tax is determined using tax rates and laws that have been enacted or substantively enacted by the reporting date.

Page 23

 
EXHEAT  GROUP LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 25 AUGUST 2023

2.Accounting policies (continued)

 
2.13

Intangible assets

Goodwill

Goodwill represents the difference between amounts paid on the cost of a business combination and the acquirer’s interest in the fair value of the Group's share of its identifiable assets and liabilities of the acquiree at the date of acquisition. Subsequent to initial recognition, goodwill is measured at cost less accumulated amortisation and accumulated impairment losses. Goodwill is amortised on a straight-line basis to the Consolidated statement of comprehensive income over its useful economic life.

Other intangible assets

Intangible assets are initially recognised at cost. After recognition, under the cost model, intangible assets are measured at cost less any accumulated amortisation and any accumulated impairment losses.

At each reporting date the Company assesses whether there is any indication of impairment. If such indication exists, the recoverable amount of the asset is determined which is the higher of its fair value less costs to sell and its value in use. An impairment loss is recognised where the carrying amount exceeds the recoverable amount.

All intangible assets are considered to have a finite useful life. If a reliable estimate of the useful life cannot be made, the useful life shall not exceed ten years.

 The estimated useful lives range as follows:

Patents
-
5
years
Goodwill
-
20
years
Trademarks
-
5
years

Goodwill is considered to have a useful economic life of 20 years due to: the electrical heating components and control panels manufactured by the Group having a typical useful life of up to 20 years; the technology used within the industry is highly established and unlikely to change; barriers to entry within the industry are high; and detailed knowledge of worldwide legislation is required.

Page 24

 
EXHEAT  GROUP LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 25 AUGUST 2023

2.Accounting policies (continued)

 
2.14

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.

At each reporting date the Group assesses whether there is any indication of impairment. If such indication exists, the recoverable amount of the asset is determined which is the higher of its fair value less costs to sell and its value in use. An impairment loss is recognised where the carrying amount exceeds the recoverable amount.

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.

Depreciation 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 charged at the following rates:

Freehold property
-
2% to 3%
Long-term leasehold property
-
2%
Plant and machinery
-
10% to 33%
Motor vehicles
-
33%
Fixtures and fittings
-
10%
Computer equipment
-
25%

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.

 
2.15

Revaluation of tangible fixed assets

Individual freehold properties are carried at current year value at fair value at the date of the revaluation less any subsequent accumulated depreciation and subsequent accumulated impairment losses. Revaluations are undertaken with sufficient regularity to ensure the carrying amount does not differ materially from that which would be determined using fair value at the reporting date.
Fair values are determined from market based evidence normally undertaken by professionally qualified valuers.

Revaluation gains and losses are recognised in other comprehensive income unless losses exceed the previously recognised gains or reflect a clear consumption of economic benefits, in which case the excess losses are recognised in profit or loss.

Page 25

 
EXHEAT  GROUP LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 25 AUGUST 2023

2.Accounting policies (continued)

 
2.16

Valuation of investments

Investments in subsidiaries are measured at cost less accumulated impairment.
Merger relief was applicable for the acquisition of certain subsidiaries of the Group. The cost of investment was recognised at the fair value of the net assets of the subsidiary at the date of the merger, the nominal value of shares issued being as share capital and the balance within a merger reserve.

 
2.17

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 includes raw materials and direct labour costs.
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.

 
2.18

Debtors

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

 
2.19

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.

 
2.20

Creditors

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

 
2.21

Provisions for liabilities

Provisions are recognised when an event has taken place that gives rise to a legal or constructive obligation, a transfer of economic benefits is probable and a reliable estimate can be made.
Provisions are measured as the best estimate of the amount required to settle the obligation, taking into account the related risks and uncertainties.
 
Increases in provisions are generally charged as an expense to profit or loss.

Page 26

 
EXHEAT  GROUP LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 25 AUGUST 2023

2.Accounting policies (continued)

  
2.22

Financial instruments

Debt instruments (other than those wholly repayable or receivable within one year), including loans and other debtors and creditors, are initially measured at present value of the future cash flows and subsequently at amortised cost using the effective interest method. Debt instruments that are payable or receivable within one year, typically trade creditors or debtors, are measured, initially and subsequently, at the undiscounted amount of the cash or other consideration expected to be paid or received. However if the arrangements of a short-term instrument constitute a financing transaction, like the payment of a trade debt deferred beyond normal business terms or financed at a rate of interest that is not a market rate or in case of an out-right short-term loan not at market rate, the financial asset or liability is measured, initially, at the present value of the future cash flow discounted at a market rate of interest for a similar debt instrument and subsequently at amortised cost.
Financial assets that are measured at cost and amortised cost are assessed at the end of each reporting period for objective evidence of impairment. If objective evidence of impairment is found, an impairment loss is recognised in the Consolidated statement of comprehensive income.
For financial assets measured at amortised cost, the impairment loss is measured as the difference between an asset's carrying amount and the present value of estimated cash flows discounted at the asset's original effective interest rate. If a financial asset has a variable interest rate, the discount rate for measuring any impairment loss is the current effective interest rate determined under the contract.
For financial assets measured at cost less impairment, the impairment loss is measured as the difference between an asset's carrying amount and best estimate of the recoverable amount, which is an approximation of the amount that the Group would receive for the asset if it were to be sold at the reporting date.
Financial assets and liabilities are offset and the net amount reported in the Consolidated statement of financial position when there is an 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.
Derivatives, including interest rate swaps and forward foreign exchange contracts, are not basic financial instruments. Derivatives are initially recognised at fair value on the date a derivative contract is entered into and are subsequently re-measured at their fair value. Changes in the fair value of derivatives are recognised in profit or loss in finance costs or income as appropriate. The Group does not currently apply hedge accounting for interest rate and foreign exchange derivatives.

Page 27

 
EXHEAT  GROUP LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 25 AUGUST 2023

3.


Judgements in applying accounting policies and key sources of estimation uncertainty

The directors are required to make judgements, estimates and assumptions about the carrying amounts of assets and liabilities that are not readily apparent from other sources. These estimates and judgements are continually evaluated and are based on historical experience and other factors that are considered relevant. Actual results may differ from these estimates. 
The judgements, estimates and assumptions which have significant risk of causing a material adjustment to the carrying amount of assets and liabilities within the next financial year are addressed below:
Impairment of goodwill
The Group considers whether goodwill is impaired. Where an indication of impairment is identified, the estimation of recoverable value requires estimation of the recoverable value of the cash generated units (CGUs). This requires estimation of the future cash flows from the CGUs and also selection of appropriate discount rates in order to calculate the net present value of those cash flows.
Impairment of investments
The Group makes an estimate of the fair value of investments in subsidiary undertakings. Assessing the fair value of subsidiaries requires the combination of assumptions including revenue growth, sales mix and volumes. In addition, the use of discount rates requires judgements.  
Stock provisioning
The Group designs, manufactures and sells electrical heating and control equipment and safety signage and is subject to consumer demands and trends. As a result it is necessary to consider the recoverability of the cost of stock and the associated provisioning required. When calculating the stock provision, management considers the nature and condition of the stock, as well as applying assumptions around the anticipated future usage.   
Provisions
The Group has recognised provisions for warranty costs and liquidated damages costs in its financial statements which require management to make judgements. The judgements, estimates and associated assumptions necessary to calculate these provisions are based on historical experience and other reasonable factors.
Property valuation
The Group has freehold property accounted for at fair value at the date of the revaluation less any subsequent accumulated depreciation and impairment losses. Annually the value of property is assessed with reference to movements in markets since the last professional valuation took place. Management must make judgements based on available relevant third party information to determine a fair value at period end to assess whether the value remains appropriate or any indications of impairment are present.

Page 28

 
EXHEAT  GROUP LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 25 AUGUST 2023

4.


Turnover

An analysis of turnover by class of business is as follows:


2023
2022
£
£

Manufacture of electrical heating and control equipment
31,516,344
23,640,761

Manufacture of safety signage
1,725,961
789,857

33,242,305
24,430,618


Analysis of turnover by country of destination:

2023
2022
£
£

United Kingdom
9,380,597
6,961,960

Rest of Europe
14,749,108
6,511,233

Rest of the world
9,112,600
10,957,425

33,242,305
24,430,618



5.


Other operating income

2023
2022
£
£

Other operating income
30,065
-

Government grants receivable
428
14,652

Sale of scrap metal
21,170
13,551

51,663
28,203



6.


Operating profit

The operating profit is stated after charging:

2023
2022
£
£

Research & development charged as an expense
38,021
49,467

Exchange differences
247,243
(158,542)

Operating lease rentals
33,244
29,901

Amortisation
267,471
269,671

Depreciation
251,831
216,444

Page 29

 
EXHEAT  GROUP LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 25 AUGUST 2023

7.


Auditors' remuneration

During the period, the Group obtained the following services from the Company's auditors:


2023
2022
£
£

Fees payable to the Company's auditors for the audit of the consolidated and parent Company's financial statements
47,500
41,415


8.


Employees

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


Group
25 August
Group
26 August
Company
25 August
Company
26 August
2023
2022
2023
2022
£
£
£
£


Wages and salaries
8,136,495
7,195,728
1,065,049
999,131

Social security costs
1,074,642
957,811
102,480
99,513

Cost of defined contribution scheme
306,453
260,298
89,850
57,313

9,517,590
8,413,837
1,257,379
1,155,957


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



Group
Group
Company
Company
        2023
        2022
        2023
        2022
            No.
            No.
            No.
            No.









Administration
46
40
28
27



Production
170
163
-
-



Selling and distribution
33
43
-
-

249
246
28
27

Page 30

 
EXHEAT  GROUP LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 25 AUGUST 2023

9.


Directors' remuneration

2023
2022
£
£

Directors' emoluments
306,632
304,316

Group contributions to defined contribution pension schemes
61,581
31,100

368,213
335,416


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

The highest paid director received remuneration of £105,928 (2022 - £106,343).

The value of the Group's contributions paid to a defined contribution pension scheme in respect of the highest paid director amounted to £50,000 (2022 - £20,000).

Key management are considered to the the directors of the Company. Key management personnel compensation paid during the year, including National Insurance, was £405,813 (2022 - £374,441).


10.


Interest receivable

2023
2022
£
£


Other interest receivable
225,608
185,515


11.


Interest payable and similar expenses

2023
2022
£
£


Bank interest payable
4,235
12,769

Other loan interest payable
644,486
619,671

648,721
632,440

Page 31

 
EXHEAT  GROUP LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 25 AUGUST 2023

12.


Other finance income

2023
2022
£
£

Fair value gains on derivative contracts
37,461
10,813



13.


Taxation


2023
2022
£
£

Corporation tax


Adjustments in respect of previous periods
(39)
(22,823)


Foreign tax on income for the year
439,549
253,736

Total current tax
439,510
230,913

Deferred tax


Origination and reversal of timing differences
(37,605)
20,596


Tax on profit/(loss)
401,905
251,509
Page 32

 
EXHEAT  GROUP LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 25 AUGUST 2023
 
13.Taxation (continued)


Factors affecting tax charge for the period

The tax assessed for the period is lower than (2022 - higher than) the standard rate of corporation tax in the UK of 21.47% (2022 - 19%). The differences are explained below:

2023
2022
£
£


Profit/(loss) on ordinary activities before tax
2,894,368
(286,904)


Profit/(loss) on ordinary activities multiplied by standard rate of corporation tax in the UK of 21.47% (2022 - 19%)
621,421
(54,512)

Effects of:


Non-tax deductible amortisation of goodwill
57,305
50,712

Expenses not deductible for tax purposes, other than goodwill amortisation and impairment
998
5,921

Fixed asset differences
3,012
(3,344)

Adjustments to tax charge in respect of prior periods
(39)
(22,823)

Deferred tax asset not recognised
(71,644)
275,317

Differences in tax rates of foreign subsidiaries
146,981
99,191

Foreign tax credits
-
15,603

Remeasurement of deferred tax
(360,372)
(116,543)

Other differences
4,243
1,987

Total tax charge for the period
401,905
251,509


Factors that may affect future tax charges

There were no factors that may affect future tax charges.

Page 33

 
EXHEAT  GROUP LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 25 AUGUST 2023

14.


Intangible assets

Group







Patents
Trademarks
Goodwill
Total

£
£
£
£



Cost


At 27 August 2022
13,005
1,798
5,338,118
5,352,921



At 25 August 2023

13,005
1,798
5,338,118
5,352,921



Amortisation


At 27 August 2022
12,603
977
1,881,783
1,895,363


Charge for the period
395
170
266,906
267,471



At 25 August 2023

12,998
1,147
2,148,689
2,162,834



Net book value



At 25 August 2023
7
651
3,189,429
3,190,087



At 26 August 2022
402
821
3,456,335
3,457,558



Page 34

 
EXHEAT  GROUP LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 25 AUGUST 2023

15.


Tangible fixed assets

Group








Freehold property
Long-term leasehold property
Plant and machinery
Motor vehicles
Fixtures and fittings
Computer equipment
Total

£
£
£
£
£
£
£



Cost or valuation


At 27 August 2022
2,582,912
661,271
1,628,751
45,509
1,033,793
1,436,026
7,388,262


Additions
-
-
145,827
68,900
38,559
50,150
303,436


Revaluations
200,000
-
-
-
-
-
200,000


Exchange adjustments
3,138
-
661
-
-
(32)
3,767



At 25 August 2023

2,786,050
661,271
1,775,239
114,409
1,072,352
1,486,144
7,895,465



Depreciation


At 27 August 2022
68,480
166,344
1,329,019
25,109
697,772
1,317,427
3,604,151


Charge for the period
27,662
13,225
72,893
17,031
65,502
55,518
251,831


On revalued assets
(57,000)
-
-
-
-
-
(57,000)


Exchange adjustments
100
-
161
-
-
(41)
220



At 25 August 2023

39,242
179,569
1,402,073
42,140
763,274
1,372,904
3,799,202



Net book value



At 25 August 2023
2,746,808
481,702
373,166
72,269
309,078
113,240
4,096,263



At 26 August 2022
2,514,432
494,927
299,732
20,400
336,021
118,599
3,784,111

Page 35

 
EXHEAT  GROUP LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 25 AUGUST 2023

           15.Tangible fixed assets (continued)

The net book value of asses held under finance leases or hire purchase contractrs, included wihtin motor vehicles above, is £10,614 (2022 - £20,400).
One freehold property was revalued at 28 February 2024 by Brown & Co on the basis of open market value. The valuation was deemed to be an accurate reflection of fair value less subsequent depreciation at 25 August 2023 by the directors and therefore the property has been revalued to reflect this valuation.
The second freehold property was revalued at 6 October 2022 by Tollner and Fluge on the basis of open market value. The valuation was deemed to be an accurate reflection of fair value at 25 August 2023 by the directors and therefore the property has been revalued to reflect this valuation.
If the freehold property had not been included at valuation it would have been included under the historical cost convention as follows:


25 August
26 August
2023
2022
£
£



Cost
1,316,287
1,313,149

Accumulated depreciation
(256,740)
(229,887)

1,059,547
1,083,262

Page 36

 
EXHEAT  GROUP LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 25 AUGUST 2023

           15.Tangible fixed assets (continued)


Company









Plant and machinery
Fixtures and fittings
Computer equipment
Total

£
£
£
£

Cost


At 27 August 2022
-
565
531,604
532,169


Additions
2,600
-
33,353
35,953



At 25 August 2023

2,600
565
564,957
568,122



Depreciation


At 27 August 2022
-
456
459,299
459,755


Charge for the period
239
56
31,795
32,090



At 25 August 2023

239
512
491,094
491,845



Net book value



At 25 August 2023
2,361
53
73,863
76,277



At 26 August 2022
-
109
72,305
72,414






Page 37

 
EXHEAT  GROUP LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 25 AUGUST 2023

16.


Fixed asset investments

Company








Investments in subsidiary companies

£



Cost


At 27 August 2022
21,881,989



At 25 August 2023

21,881,989



Impairment


At 27 August 2022
2,382,000



At 25 August 2023

2,382,000



Net book value



At 25 August 2023
19,499,989



At 26 August 2022
19,499,989

Page 38

 
EXHEAT  GROUP LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 25 AUGUST 2023

Direct subsidiary undertakings


The following were direct subsidiary undertakings of the Company:

Name

Registered office

Class of shares

Holding

Electric Heaters Limited *
17 Old Millers Wharf, Fishergate, Norwich, NR3 1GS
Ordinary
100%
Ex Services (UK) Limited *
17 Old Millers Wharf, Fishergate, Norwich, NR3 1GS
Ordinary
100%
Heatex Limited *
17 Old Millers Wharf, Fishergate, Norwich, NR3 1GS
Ordinary
100%
Exheat Limited
17 Old Millers Wharf, Fishergate, Norwich, NR3 1GS
Ordinary
100%
Exheat Industrial Limited
17 Old Millers Wharf, Fishergate, Norwich, NR3 1GS
Ordinary
100%
Seaward Safety Limited
17 Old Millers Wharf, Fishergate, Norwich, NR3 1GS
Ordinary
100%
Exheat PROPCO Limited *
17 Old Millers Wharf, Fishergate, Norwich, NR3 1GS
Ordinary
100%
Exheat Industrial Inc *
15825 Tomball Parkway
Suite 14
Beltway Parkway Industrial Estate
SH249
Houston
Texas 77086-101
5USA
Ordinary
100%
Corex Controls Limited *
17 Old Millers Wharf, Fishergate, Norwich, NR3 1GS
Ordinary
100%
Roomfoss Limited
17 Old Millers Wharf, Fishergate, Norwich, NR3 1GS
Ordinary
100%
SEICO Heizungen GmbH
An der Autobahn 29, 30851 Langenhagen, Region Hannover, Niedersachsen, Germany
Ordinary
100%

* Denotes a dormant company.

Page 39

 
EXHEAT  GROUP LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 25 AUGUST 2023

Indirect subsidiary undertakings


The following were indirect subsidiary undertakings of the Company:

Name

Registered office

Class of shares

Holding

Seaward Safety Inc
15825 Tomball Parkway
Suite 14
Beltway Parkway Industrial Estate
SH249
Houston
Texas 77086-1015
USA
Ordinary
100%
Roomfoss Control Systems Limited
17 Old Millers Wharf, Fishergate, Norwich, NR3 1GS
Ordinary
100%


17.


Stocks

Group
25 August
Group
26 August
Company
25 August
Company
26 August
2023
2022
2023
2022
£
£
£
£

Raw materials and consumables
6,220,151
4,355,427
25,783
19,964

Work in progress
4,277,955
3,931,960
-
-

Finished goods and goods for resale
369,425
178,424
-
-

10,867,531
8,465,811
25,783
19,964


The difference between purchase price or production cost of stocks and their replacement cost is not material.

The carrying value of stocks are stated net of provision for impairment losses totaling £376,689 (2022 - £328,577). Impairment losses totaling £48,112 (2022 - £16,635) were recognised in profit and loss.
No impairment loss was recognised for the Company.

Page 40

 
EXHEAT  GROUP LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 25 AUGUST 2023

18.


Debtors

Group
25 August
Group
26 August
Company
25 August
Company
26 August
2023
2022
2023
2022
£
£
£
£


Trade debtors
10,320,689
9,623,888
-
-

Amounts owed by group undertakings
-
-
934,932
842,304

Other debtors
7,740,249
6,382,870
6,243,386
5,209,148

Prepayments and accrued income
443,089
382,441
75,758
29,047

Deferred taxation
-
-
-
7,722

18,504,027
16,389,199
7,254,076
6,088,221


Trade debtors for the Group are stated net of provisions totalling £358,048 (2022 - £367,619). An impairment loss of £161,324 (2022 - £173,178) was recognised against trade debtors for the Group.
Trade debtors for the Company are stated net of provisions totalling £Nil 
(2022 - £20,515). Impairment losses of £Nil (2022 - £20,515) were recognised in the year for the Company.


19.


Cash and cash equivalents

Group
25 August
Group
26 August
Company
25 August
Company
26 August
2023
2022
2023
2022
£
£
£
£

Cash at bank and in hand
8,953,571
9,378,514
214,362
681,212


Page 41

 
EXHEAT  GROUP LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 25 AUGUST 2023

20.


Creditors: Amounts falling due within one year

Group
25 August
Group
26 August
Company
25 August
Company
26 August
2023
2022
2023
2022
£
£
£
£

Trade creditors
2,406,054
2,373,716
27,947
21,321

Amounts owed to group undertakings
-
-
261,036
278,105

Other taxation and social security
366,831
191,796
101,198
82,213

Net obligations under finance leases
3,849
3,849
-
-

Other creditors
20,459,413
18,698,580
15,808,916
15,034,603

Accruals and deferred income
5,972,944
6,384,474
201,364
185,853

Financial instruments
2,276
39,737
-
-

29,211,367
27,692,152
16,400,461
15,602,095


Secured loans
The finance lease and hire purchase creditor is secured over the assets concerned.


21.


Creditors: Amounts falling due after more than one year

Group
25 August
Group
26 August
2023
2022
£
£

Net obligations under finance leases and hire purchase contracts
4,169
8,018

Other creditors
2,058
2,422

6,227
10,440


Secured loans
The finance lease and hire purchase creditor is secured over the assets concerned.


Page 42

 
EXHEAT  GROUP LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 25 AUGUST 2023

22.


Financial instruments

Fair value of assets and liabilities
The fair value of derivative financial instruments represents the amount at which the instrument could be exchanged in a current transaction between willing parties, other than in a forced sale or liquidation.   Significant differences can arise between the fair value and the carrying amount of financial instruments that are recognised at historical cost amounts.
The following table illustrates the fair value related to the Group's derivative financial instruments classified as fair value through the Consolidated statement of comprehensive income and recorded on the Group's Statement of financial position as other liabilities/assets:

Group
26 August
Group
27 August
2023
2022
£
£
Physical forward contracts

(2,276)

(39,737)
 

The physical forward contracts are entered into by the Group to mitigate the foreign exchange risk originating from sales contracts to customers outside of the UK.
The discussion of the Group's objectives with regards to financial instruments is included within the directors' report.


23.


Deferred taxation


Group



2023


£






At beginning of year
(344,524)


Charged to profit or loss
37,605


Charged to other comprehensive income
(49,772)



At end of year
(356,691)

Page 43

 
EXHEAT  GROUP LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 25 AUGUST 2023
 
23.Deferred taxation (continued)

Company


2023


£






At beginning of year
7,722


Charged to profit or loss
(7,722)



At end of year
-

The provision for deferred taxation is made up as follows:

Group
25 August
Group
26 August
Company
25 August
Company
26 August
2023
2022
2023
2022
£
£
£
£

Accelerated capital allowances
(87,754)
(37,641)
-
7,722

Other short term timing differences
27,540
11,472
-
-

Tax losses
71,650
-
-
-

Revaluation
(368,127)
(318,355)
-
-

(356,691)
(344,524)
-
7,722

Page 44

 
EXHEAT  GROUP LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 25 AUGUST 2023

24.


Provisions


Group



Warranty provision
Liquidated damages provision
Total

£
£
£





At 27 August 2022
153,949
547,834
701,783


Charged to profit or loss
146,418
-
146,418


Exchange adjustments
498
-
498


Utilised in period
(16,104)
(181,809)
(197,913)



At 25 August 2023
284,761
366,025
650,786

Warranty provision
The provision represents the expected costs to be incurred within the warranty period as agreed in the individual contract. The provision is expected to be fully utilised over the coming 24 months.
Liquidated damages provision
The provision represents the expected costs to be incurred where it is known that delivery of certain contracts has been delayed and the revenue has been recognised for that project. The provision represents the best estimate at the reporting date. The provision is expected to be fully utilised over the coming 12 months.

Page 45

 
EXHEAT  GROUP LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 25 AUGUST 2023

25.


Share capital

25 August
26 August
2023
2022
£
£
Allotted, called up and fully paid



1,701 (2022 - 1,701) ordinary shares of £1 each
1,701
1,701
100 (2022 - 100) ordinary A shares of £1 each
100
100
100 (2022 - 100) ordinary B shares of £1 each
100
100

1,901

1,901

Share capital represents the nominal value of shares issued, shares carry voting rights and an entitlement to dividends. All share classes rank parri passu.



26.


Reserves

Revaluation reserve

The revaluation reserve contains surpluses on revaluations of property held at fair value.

Merger Reserve

The merger reserve contains the premium on shares issued when subsidiaries were acquired into the Group via a share for share exchange. This relates to certain acquisitions where merger relief was applicable and applied.

Profit and loss account

The profit and loss account contains all prior year profits and losses.

Page 46

 
EXHEAT  GROUP LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 25 AUGUST 2023


27.


Pension commitments

The Group operates a number of defined contribution pension schemes. The assets of the schemes are held separately from those of the Group in independently administered funds. The pension cost charge represents contributions payable by the Group to the fund and amounted to £306,453 (2022 - £260,298). Contributions payable by the Company amounted to £89,850 (2022 - £57,313). Contributions for the Group totaling £86,394 (2022 - £53,913) were payable to the funds at the reporting date. Contributions for the Company totaling £Nil (2022 - £Nil) were payable to the funds at the reporting date.


28.


Commitments under operating leases

At 25 August 2023 the Group and the Company had future minimum lease payments due under non-cancellable operating leases for each of the following periods:


Group
25 August
Group
26 August
Company
25 August
Company
26 August
2023
2022
2023
2022
£
£
£
£

Not later than 1 year
27,914
33,244
21,916
21,916

Later than 1 year and not later than 5 years
27,610
38,574
17,818
38,574

55,524
71,818
39,734
60,490

Page 47

 
EXHEAT  GROUP LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 25 AUGUST 2023

29.


Related party transactions


2023
Sales/
(Purchases)
2023
Debtors/
(Creditors)
2022
Sales/
(Purchases)
2022
Debtors/
(Creditors)
£
£
£
£

Exheat Pte Ltd
- Sales and recharged expenses
-
-
12,095
305,312
- Purchases and recharged expenses
-
(3,512,658)
(7,420)
(3,513,605)
Ex Services Pte Ltd
- Sales and recharged expenses
416,404
-
277,930
36,530
- Purchases and recharged expenses
(125,441)
(686,042)
(179,696)
(152,407)
- Loans
(610,799)
(14,428,050)
(569,658)
(13,028,954)
Exheat Process Heat India Private Limited
- Sales and recharged expenses
242,326
793,284
-
439,754
- Purchases and recharged expenses
(220,364)
(178,253)
(163,291)
(196,710)
Black Orange Inv Ltd  - Rent
(324,262)
-
(324,262)
-
- Purchases and recharged expenses
-
(312)
-
(999)
- Sales and recharged expenses
-
-
-
639
- Loan
185,825
5,452,825
162,791
4,443,306
Orange Noire SCI  - Loan
29,085
537,170
22,855
511,889
P B Smithers  - Director's loan
-
(643,381)
-
(1,237,872)
R V Smithers  - Director's loan
-
(67,280)
-
(97,669)

The directors have taken advantage of the exemption within FRS 102 not to disclose transactions with wholly owned group companies.
Exheat Pte Ltd, Ex Services Pte Ltd, Exheat Process Heat India Private Limited, Black Orange Inv Ltd and Orange Noire SCI are companies under common ownership by virtue of P B Smithers, a director.
The loan due to Ex Services Pte Limited has no fixed repayment terms and accrues interest at 4% over the Bank of England base rate.
The loans due to P B Smithers, R V Smithers and Orange Noire SCI are repayable on demand and accrue interest at 4% over the Bank of England base rate.
The loan due from Black Orange Inv Limited is repayable on demand and accrues interest at 3% over the Bank of England base rate.


30.


Controlling party

P B Smithers is the ultimate controlling party by virtue of his majority shareholding in the Company.

 
Page 48