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Registered number: 01937570















KENTEC ELECTRONICS LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2024

 
KENTEC ELECTRONICS LIMITED
 
 
COMPANY INFORMATION


Directors
Mr K Swann 
Mr J Uozumi 
Mr K Kasuya 
Mr E Goto (appointed 7 June 2023)
Mr N Niwa (appointed 7 June 2023)




Company secretary
Ms Rie Buchan



Registered number
01937570



Registered office
Unit 25&26 Fawkes Avenue
Questor

Dartford

Kent

DA1 1JQ




Independent auditors
Greenback Alan LLP
Chartered Accountant & Statutory Auditor

89 Spa Road

London

SE16 3SG




Bankers
HSBC Bank plc
38 High St

Dartford

DA1 1DG





 
KENTEC ELECTRONICS LIMITED
 

CONTENTS



Page
Strategic report
1 - 3
Directors' report
4 - 5
Directors' responsibilities statement
6
Independent auditors' report
7 - 10
Statement of income and retained earnings
11
Statement of financial position
12 - 13
Notes to the financial statements
14 - 28


 
KENTEC ELECTRONICS LIMITED
 
 
STRATEGIC REPORT
FOR THE YEAR ENDED 31 MARCH 2024

Introduction
 
The directors present their strategic report on the Company for the year ended 31 March 2024.
The strategic report is consistent with the size and non-complex nature of the business and is written in the context of the risks and uncertainties the Company faces. The principal activity of the Company continues to be that of manufacturing, supplying and distributing life safety control systems. The Company develops and manufactures high quality and reliable life safety related control systems for commercial and industrial applications which are sold through professional system integrators and specialist distribution channels. The Company has developed manufacturing and support systems which allow greatly reduced lead times to customers compared with the industry norm yet maintaining the business' ability to provide bespoke and OEM products to major users. To remain competitive, the directors plan to expand the business with a wireless solutions and system sales approach.

Page 1

 
KENTEC ELECTRONICS LIMITED
 

STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024

Business review
 
The Business had another challenging year following rising inflation, persisting supply shortages and political instability during April 2023 to March 2024. Despite this, the Company had exceeded its sales targets and together provided record sales and growth with turnover increasing to £ 30.2M, 115% compared to Budget.
Compared to budget, External sales enjoyed growth in sales supported by strong order book with extinguishant products. Group continued to outperform with increased Latitude. GPM% slightly improved for External mainly due to increased proportion of UK sales with higher margin.
There was a new government elected in UK in Summer 2024 and there are mixed forecasts with regards to the UK economy for next year.
- UK inflation has fallen this year, but still, there are risks that may be related to national debts and salary increases negotiated by the government.  In line with this, we have seen salary increases across a few sectors, such as Junior doctors and train drivers, public servants, etc. 
- BoE's base interest rate was reduced in August 2024 to 5% after holding them at 5.25% for a long period. As the economy cools and inflation returns to back to target, BoE may cut the rates further, bringing the base rate to 4% by the end of 2025. However, uncertainty still prevails as this depends significantly on how quickly inflation drops and remains stable. 
- Higher borrowing costs and a slowing growth outlook are expected to weaken business investment. Government measures aiming to boost investment are likely to only have a temporary effect on growth.  
- The labour market is at a turning point. Whilst the unemployment rate has stayed relatively low, this will reverse as employers adjust their headcount, considering rising costs and falling demand. The unemployment rate (currently 3.8%) is expected to peak at around 4.7% by the middle of next year. 
The company has seen Gross Profit Margins slightly increased to 33.49% in The Financial Year ended Mar 2024 from 31.75% in April to Mar 2023.  
Following the company's strategic commercial plans, a significant drive in the global market for extinguishing products has led to a more robust sales performance and far greater demands on the factory and all departments. The company has listened to this challenge and made adjustments and plans in preparation for further growth. 
The company's profitability has improved significantly, driven by solid budget control and commercial success.   
The operating profit margin increased from 5.61% in April – March 2023 to 12.27 % in April – March 2024.   
The company's financial position remains healthy, with tight cost control throughout the mini-year. March ended with a cash increase of £486K. The directors believed that the minor reduction in cash last year's financial year was a short-term issue, and they were proven correct. 

Principal risks and uncertainties

The directors, who are responsible for internal control systems which identify and manage various risks that pose a threat to achieving the Company's objectives, have identified the principal risks as follows:
- The current economic environment in the world is under elevated inflation, and the ongoing Russia and Ukraine war, conflict in the Middle East, and the American election have disrupted supply chains worldwide. The company has managed the situation by increasing the raw materials of key components.
-  There is still uncertainty around how Brexit will affect UK business and the economy.  Any new trade agreements entered into by the UK may impact the Company's export trade.  Staff shortages resulting from more rigid immigration rules will likely increase wages and reduce the company's productivity. The Company ls continually monitoring the political environment and its impact on the economic climate to react to any fundamental changes.
-  There is uncertainty about the regulatory framework that the Company currently operates within. Changes in
 
Page 2

 
KENTEC ELECTRONICS LIMITED
 

STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024

-  the political environment may lead to revisions to the current European and US fire regulations. The company feels that it is well placed to adapt to any changes in regulations as significant investment has been made to create a larger Research and Development (R&D) department.
-  The Company continues to face pressure to recruit, train and retain highly skilled and motivated staff members. The Company will continue to review its Human Resources policies in 2024 to mitigate this risk further. Currently, staff retention is at an all-time high, even in this economic environment. The Company is exposed to foreign exchange risk, particularly in the case of USD and GBP.  The majority of the exposure is managed by natural hedging and will continue to exist within 2024. Any surplus of USD cash is kept to a minimum to reduce exposure.
- Compliance with Health, Safety and Environmental matters is fundamental to the Company’s reputation,
existence and the safety of its employees, subcontractors   and the public at large. It is therefore paramount that the Company maintains and stays abreast of current legislation as well as best practice within this area. The company strengthened its compliance team in the prior year to ensure it continues to prioritise these three key areas as well as quality assurance.
-  The Company has become increasingly reliant on Information Technology (IT) and our ERP system  is central to the business. 
- The Company operates within a highly regulated and technical industry.   There is an ongoing threat from competition in terms of pricing, product innovations and service, which may lead to a loss in market share to competitors.  The company is investing heavily in R&D to ensure it is at the forefront of product innovations.  By maintaining a technical support department, the Company can deal directly with product issues and maintain communication with our customers so that we can understand the market needs and be best placed to react to the changes.
The directors themselves and through delegated management periodically review the effectiveness of the Company’s internal control systems to ensure that the principal risks faced by the businesses are adequately managed and controlled.

Financial key performance indicators
 
The directors use a number of performance measures to assess the Company’s success in meeting its objectives. The key performance indicators are:
- Comparison of actual sales against budget
-  Gross profit margins
-  Variances between actual and budgeted standard costing
-  Operating profit percentage
-  Aged debtors
-  Working capital cycle
The directors consider the key performance indicators for the year to be satisfactory.


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


Mr K Swann
Director

Date: 20 November 2024

Page 3

 
KENTEC ELECTRONICS LIMITED
 
 
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 MARCH 2024

The directors present their report and the financial statements for the year ended 31 March 2024.

Principal activity
The principal activity of· the Company in the year under review was that of manufacturing, supplying and distributing life safety control systems.

Results and dividends

The profit for the year, after taxation, amounted to £2,639,902 (3 months ended 31 March 2023 - £329,361).

The results for the year and financial position of the Company are as shown in the annexed financial statements. The Company had a successful year by moving forward with system sales offerings and enjoyed growth both in turnover and profit. Although the global supply chain disruption had continued to adversely impact on cost structure and financial health of the company, the company took immediate actions to sustain business operations.
In 2024, Taktis/Latitude will continue to be confidently positioned as a core product to our system sales business as a part of the Group business strategy.  Our new branding management for system sales and channel management increase sales opportunities for the entire Group and drive improved profits.
The sales made by the Company vary from small customers in the UK to large organisations both within the UK and in regions outside the UK.  In line with this, the sales in the accounts have been split geographically as follows - in the UK, Europe and Rest of the World. 

Going Concern

The Company's business activities, together with the factors likely to affect its future development, its financial position, financial risks management objectives and its exposure to foreign currency, price, credit and liquidity risk are described in the Strategic Report on page 1.
The Company benefits from the support of membership of a strong global group under its ultimate parent undertaking, Hochiki Corporation and has long term relationships with a number of customers and suppliers across different geographic areas and industries. Consequently, the directors believe that the Company is well placed to manage its business risks successfully.
After making enquiries, the directors have a reasonable expectation that they have adequate resources to continue in operational. existence for the foreseeable future.  The management of Hochiki Group in Japan   Is expecting growth from expansion in international business. Therefore, the Japanese management has set a higher target for 2024.  Accordingly, it is felt appropriate to adopt the going concern basis in preparing the financial statements.

Page 4

 
KENTEC ELECTRONICS LIMITED
 
 
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024

  Directors

The directors who served during the year were:

Mr K Swann 
Mr J Uozumi 
Mr H Hosoi (resigned 7 June 2023)
Mr K Kasuya 
Mr H Kamei (resigned 7 June 2023)
Mr E Goto (appointed 7 June 2023)
Mr N Niwa (appointed 7 June 2023)

Future developments

We are aware that any plans for the future development of the business may be subject to unforeseen events outside of our control.  However, to remain competitive, we will plan to invest and develop our undeveloped export markets.

Disclosure of information to auditors

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

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

Post balance sheet events

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

Auditors

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

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



Mr K Swann
Director

Date: 20 November 2024

Page 5

 
KENTEC ELECTRONICS LIMITED
 
 
DIRECTORS' RESPONSIBILITIES STATEMENT
FOR THE YEAR ENDED 31 MARCH 2024

The directors are responsible for preparing the Strategic report, the Directors' report and the financial statements in accordance with applicable law and regulations.

Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice), including Financial Reporting Standard 102 ‘The Financial Reporting Standard applicable in the UK and Republic of Ireland'. Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the Company and of the profit or loss of the Company for that period.

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

select suitable accounting policies for the company's financial statements and then apply them consistently;

make judgments and accounting estimates that are reasonable and prudent;


prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Company will continue in business.

The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the Company's transactions and disclose with reasonable accuracy at any time the financial position of the Company and to enable them to ensure that the financial statements comply with the Companies Act 2006They are also responsible for safeguarding the assets of the Company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

Page 6

 
KENTEC ELECTRONICS LIMITED
 
 
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF KENTEC ELECTRONICS LIMITED
 

Opinion


We have audited the financial statements of Kentec Electronic Limited (the 'Company') for the year ended 31 March 2024, which comprise the Statement of income and retained earnings, the Statement of financial position and the related notes, including a summary of significant accounting policiesThe financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 ‘The Financial Reporting Standard applicable in the UK and Republic of Ireland' (United Kingdom Generally Accepted Accounting Practice).


In our opinion the financial statements:


give a true and fair view of the state of the Company's affairs as at 31 March 2024 and of its profit for the year then ended;
have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and
have been prepared in accordance with the requirements of the Companies Act 2006.


Basis for opinion


We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditors' responsibilities for the audit of the financial statements section of our report. We are independent of the Company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the United Kingdom, including the Financial Reporting Council's Ethical Standard and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.


Conclusions relating to going concern


In auditing the financial statements, we have concluded that the directors' use of the going concern basis of accounting in the preparation of the financial statements is appropriate.


Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the Company's ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.


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


Page 7

 
KENTEC ELECTRONICS LIMITED
 
 
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF KENTEC ELECTRONICS LIMITED (CONTINUED)

Other information


The other information comprises the information included in the Annual Report other than the financial statements and our Auditors' report thereon. The directors are responsible for the other information contained within the Annual ReportOur opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the course of the audit, or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.


We have nothing to report in this regard.


Opinion on other matters prescribed by the Companies Act 2006
 

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


the information given in the Strategic report and the Directors' report for the financial year for which the financial statements are prepared is consistent with the financial statements; and
the Strategic report and the Directors' report have been prepared in accordance with applicable legal requirements.


Matters on which we are required to report by exception
 

In the light of the knowledge and understanding of the Company and its environment obtained in the course of the audit, we have not identified material misstatements in the Strategic report or the Directors' report.


We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to report to you if, in our opinion:


adequate accounting records have not been kept, or returns adequate for our audit have not been received from branches not visited by us; or
the financial statements are not in agreement with the accounting records and returns; or
certain disclosures of directors' remuneration specified by law are not made; or
we have not received all the information and explanations we require for our audit.


Responsibilities of directors
 

As explained more fully in the Directors' responsibilities statement set out on page 6, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.


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


Page 8

 
KENTEC ELECTRONICS LIMITED
 
 
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF KENTEC ELECTRONICS LIMITED (CONTINUED)

Auditors' responsibilities for the audit of the financial statements
 

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


Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below:
We obtained a general understanding of the company’s legal and regulatory framework through enquiry of management concerning: their understanding of relevant laws and regulations; the entity’s policies and procedures regarding compliance; and how they identify, evaluate and account for litigation claims. We also drew on our existing understanding of the company’s industry and regulation.
We understand that the company complies with the framework through having in place robust procedures and policies that are develop with and monitored by the parent company and the wider group, and by outsourcing and taking external professional legal, tax and accounting advice on relevant specialist functions and areas including the preparation of financial statements and corporate tax compliance.
In the context of the audit, we considered those laws and regulations: which determine the form and content of the financial statements; which are central to the company’s ability to conduct its business; and where failure to comply could result in material penalties. We identified the following laws and regulations as being of significance in the context of the company:
 


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.


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.


Page 9

 
KENTEC ELECTRONICS LIMITED
 
 
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF KENTEC ELECTRONICS LIMITED (CONTINUED)






Jonathan Fisher (Senior statutory auditor)
for and on behalf of
Greenback Alan LLP
Chartered Accountant
Statutory Auditor
89 Spa Road
London
SE16 3SG

20 November 2024
Page 10

 
KENTEC ELECTRONICS LIMITED
 
 
STATEMENT OF INCOME AND RETAINED EARNINGS
FOR THE YEAR ENDED 31 MARCH 2024

31 March
3 Months Ended
31 March
2024
2023
Note
£
£

  

Turnover
 4 
30,214,416
6,114,922

Cost of sales
  
(20,093,802)
(3,997,868)

Gross profit
  
10,120,614
2,117,054

Administrative expenses
  
(6,412,119)
(1,720,163)

Operating profit
 5 
3,708,495
396,891

Interest receivable and similar income
 8 
13
193

Interest payable and similar expenses
 9 
(71,235)
(17,076)

Profit before tax
  
3,637,273
380,008

Tax on profit
 10 
(997,371)
(50,647)

Profit after tax
  
2,639,902
329,361

  

  

Retained earnings at the beginning of the year
  
9,972,109
9,642,748

  
9,972,109
9,642,748

Profit for the year
  
2,639,902
329,361

Dividends declared and paid
  
(541,261)
-

Retained earnings at the end of the year
  
12,070,750
9,972,109
There were no recognised gains and losses for 2024 or 2023 other than those included in the statement of income and retained earnings.

The notes on pages 14 to 28 form part of these financial statements.

Page 11

 
KENTEC ELECTRONICS LIMITED
REGISTERED NUMBER:01937570

STATEMENT OF FINANCIAL POSITION
AS AT 31 MARCH 2024

2024
2023
Note
£
£

Fixed assets
  

Tangible assets
 12 
1,740,993
2,189,159

  
1,740,993
2,189,159

Current assets
  

Stocks
 13 
8,751,814
7,907,362

Debtors: amounts falling due within one year
 14 
6,025,155
5,389,502

Cash at bank and in hand
 15 
2,805,279
2,319,524

  
17,582,248
15,616,388

Creditors: amounts falling due within one year
 16 
(6,360,427)
(6,833,374)

Net current assets
  
 
 
11,221,821
 
 
8,783,014

Total assets less current liabilities
  
12,962,814
10,972,173

Creditors: amounts falling due after more than one year
 17 
-
(74,615)

Provisions for liabilities
  

Deferred tax
 19 
(189,893)
(242,185)

Other provisions
 20 
(683,571)
(664,664)

  
 
 
(873,464)
 
 
(906,849)

Net assets
  
12,089,350
9,990,709


Capital and reserves
  

Called up share capital 
 21 
18,600
18,600

Profit and loss account
 22 
12,070,750
9,972,109

  
12,089,350
9,990,709


Page 12

 
KENTEC ELECTRONICS LIMITED
REGISTERED NUMBER:01937570
    
STATEMENT OF FINANCIAL POSITION (CONTINUED)
AS AT 31 MARCH 2024

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




Mr K Swann
Director

Date: 20 November 2024

The notes on pages 14 to 28 form part of these financial statements.

Page 13

 
KENTEC ELECTRONICS LIMITED
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2024

1.


General information

Kentec Electronics Limited is a private company limited by shares which was incorporated in the United Kingdom.

2.Accounting policies

 
2.1

Basis of preparation of financial statements

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

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

The following principal accounting policies have been applied:

 
2.2

Financial Reporting Standard 102 - reduced disclosure exemptions

The Company has taken advantage of the following disclosure exemptions in preparing these financial statements, as permitted by the FRS 102 "The Financial Reporting Standard applicable in the UK and Republic of Ireland":
the requirements of Section 7 Statement of Cash Flows;
the requirements of Section 3 Financial Statement Presentation paragraph 3.17(d);
the requirements of Section 33 Related Party Disclosures paragraph 33.7.

This information is included in the consolidated financial statements of Hochiki Corporation as at 31 March 2024 and these financial statements may be obtained from 2-10-43 Kamiosaki, Shinagawa-ku, Tokyo 141-8660 Japan.

 
2.3

Revenue

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

Sale of goods

Revenue from the sale of goods is recognised when all of the following conditions are satisfied:
the Company has transferred the significant risks and rewards of ownership to the buyer;
the Company retains neither continuing managerial involvement to the degree usually associated with ownership nor effective control over the goods sold;
the amount of revenue can be measured reliably;
it is probable that the Company will receive the consideration due under the transaction; and
the costs incurred or to be incurred in respect of the transaction can be measured reliably.

Page 14

 
KENTEC ELECTRONICS LIMITED
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2024

2.Accounting policies (continued)

 
2.4

Tangible fixed assets

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 provided on the following basis:

Plant and machinery
-
7 years straight line basis
Motor vehicles
-
4 years straight line basis
Fixtures and fittings
-
7 years straight line basis
Computer equipment
-
3 years straight line basis

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.

 
2.5

Stocks

The value of stock is measured using a rolling average of the costs of purchase, costs of conversion and other costs incurred in bringing the stock to its location and condition as at the year end. 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 the statement of income.

 
2.6

Debtors

Short-term debtors are measured at transaction price, less any impairment. Loans receivable are measured initially at fair value, net of transaction costs, and are measured subsequently at amortised cost using the effective interest method, less any impairment.

 
2.7

Creditors

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

Page 15

 
KENTEC ELECTRONICS LIMITED
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2024

2.Accounting policies (continued)

 
2.8

Foreign currency translation

Functional and presentation currency

The Company's functional and presentational currency is GBP.

Transactions and balances

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

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

Foreign exchange gains and losses resulting from the settlement of transactions and from the translation at period-end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in profit or loss except when deferred in other comprehensive income as qualifying cash flow hedges.

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

 
2.9

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. Issue costs are initially recognised as a reduction in the proceeds of the associated capital instrument.

 
2.10

Operating leases: Lessee

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

 
2.11

Pensions

Defined contribution pension plan

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

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

 
2.12

Interest income

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

Page 16

 
KENTEC ELECTRONICS LIMITED
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2024

2.Accounting policies (continued)

 
2.13

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.

 
2.14

Current and deferred taxation

The tax expense for the year 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 operates and generates 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; and
Any deferred tax balances are reversed if and when all conditions for retaining associated tax allowances have been met.

Deferred tax balances are not recognised in respect of permanent differences 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.


 
2.15

Research and development

In the research phase of an internal project it is not possible to demonstrate that the project will generate future economic benefits and hence all expenditure on research shall be recognised as an expense when it is incurred. Intangible assets are recognised from the development phase of a project if and only if certain specific criteria are met in order to demonstrate the asset will generate probable future economic benefits and that its cost can be reliably measured. The capitalised development costs are subsequently amortised on a straight-line basis over their useful economic lives, which range from 3 to 6 years.
If it is not possible to distinguish between the research phase and the development phase of an internal project, the expenditure is treated as if it were all incurred in the research phase only.

Page 17

 
KENTEC ELECTRONICS LIMITED
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2024

2.Accounting policies (continued)

 
2.16

Dividends

Equity dividends are recognised when they become legally payable. Interim equity dividends are recognised when paid. Final equity dividends are recognised when approved by the shareholders at an annual general meeting.


3.


Judgments in applying accounting policies and key sources of estimation uncertainty

The preparation of financial statements in conformity with FRS 102 requires management to make judgements, estimates and assumptions that affect the application of policies and reported amounts of assets and liabilities, income and expenses. The estimates and associated assumptions are based on historical experience and various other factors that are believed to be reasonable under the circumstances. The results of these form the basis of making the judgements about carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates.
In respect of estimates and assumptions, and judgements made as a result, made by management in preparing these financial statements, the following are considered to have a significant risk of causing a material adjustment to the carrying amount of assets and liabilities presented:
Provisions – see Note 20
In respect of other significant management judgements in applying the accounting policies of the Company, the following have the most significant effect on the financial statements:
Carrying value of stock – (see Note 2.5) management consider that there is no impairment to stock
Recoverability of debtors – (see Note 2.6) management consider that there is no impairment to debtors

Page 18

 
KENTEC ELECTRONICS LIMITED
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2024

4.


Turnover

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


31 March
3 Months Ended
31 March
2024
2023
£
£

Life Safety Control Systems
30,214,416
6,114,922

30,214,416
6,114,922


Analysis of turnover by country of destination:

31 March
3 Months Ended
31 March
2024
2023
£
£

United Kingdom
12,209,267
2,868,360

Rest of Europe
2,927,326
1,328,410

Rest of the world
15,077,823
1,918,152

30,214,416
6,114,922



5.


Operating profit

The operating profit is stated after charging:

31 March
3 Months Ended
31 March
2024
2023
£
£

Research & development charged as an expense
1,074,842
221,591

Depreciation of tangible fixed assets
626,030
156,036

Exchange differences
(25,104)
(35,323)

Other operating lease rentals
111,010
71,582

Page 19

 
KENTEC ELECTRONICS LIMITED
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2024

6.


Employees

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


31 March
3 Months Ended
31 March
2024
2023
£
£

Wages and salaries
9,777,263
2,389,509

Cost of defined contribution scheme
234,095
43,841

10,011,358
2,433,350


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


       31 March
   3 Months Ended
        31 March
        2024
        2023
            No.
            No.







Tech Support
17
16



Sales and Marketing
13
12



Operations
25
25



Compliance
9
8



Accounts and IT
8
7



Production
156
150



HR
3
2



Research and Development
16
15

247
235

Page 20

 
KENTEC ELECTRONICS LIMITED
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2024

7.


Directors' remuneration

31 March
3 Months Ended
31 March
2024
2023
£
£

Directors' emoluments
384,000
114,033

Company contributions to defined contribution pension schemes
20,791
7,989

404,791
122,022


During the year retirement benefits were accruing to  1 director (2023 - NIL) in respect of defined contribution pension schemes.

The highest paid director received remuneration of £322,606 (2023 - £121,521).


8.


Interest receivable

31 March
3 Months Ended
31 March
2024
2023
£
£


Other interest receivable
13
193

13
193


9.


Interest payable and similar expenses

31 March
3 Months Ended
31 March
2024
2023
£
£


Bank charges
22,230
5,682

Other loan interest payable
41,029
8,165

Finance leases and hire purchase contracts
7,976
3,229

71,235
17,076

Page 21

 
KENTEC ELECTRONICS LIMITED
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2024

10.


Taxation


31 March
3 Months Ended
31 March
2024
2023
£
£

Corporation tax


Current tax on profits for the year
902,651
47,059

Adjustments in respect of previous periods
115,387
-


Total current tax
1,018,038
47,059

Deferred tax


Origination and reversal of timing differences
(20,667)
3,588

Total deferred tax
(20,667)
3,588


Taxation on profit on ordinary activities
997,371
50,647

Factors affecting tax charge for the year/period

The tax assessed for the year/period is the same as (2023 - the same as) the standard rate of corporation tax in the UK of 25% (2023 - 19%) as set out below:

31 March
3 Months Ended
31 March
2024
2023
£
£


Profit on ordinary activities before tax
3,637,272
380,007


Profit on ordinary activities multiplied by standard rate of corporation tax in the UK of 25% (2023 - 19%)
909,318
72,201

Effects of:


Expenses not deductible for tax purposes, other than goodwill amortisation and impairment
-
146

Capital allowances for year/period in excess of depreciation
(296,717)
(2,762)

Short term timing difference leading to an increase (decrease) in taxation
242,185
9,113

Adjustment in research and development tax credit leading to an increase (decrease) in the tax charge
142,585
(28,051)

Total tax charge for the year/period
997,371
50,647

Page 22

 
KENTEC ELECTRONICS LIMITED
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2024
 
10.Taxation (continued)


Factors that may affect future tax charges

The Finance Act 2021 announced an increase in the rate of corporation tax from 19% to 25% from 1 April 2023 for companies with taxable profits over £250,000, this increased rate was substantively enacted on 24 May 2021.


11.


Dividends

2024
2023
£
£


Dividends
541,261
-

541,261
-

Page 23
 

KENTEC ELECTRONICS LIMITED
 
 
 

 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2024


12.


Tangible fixed assets






Plant and machinery
Motor vehicles
Fixtures and fittings
Computer equipment
Other fixed assets
Total

£
£
£
£
£
£



Cost or valuation


At 1 April 2023
4,384,081
340,557
1,283,413
571,866
-
6,579,917


Additions
73,121
-
800
37,742
77,547
189,210


Disposals
(92,671)
-
(935)
(18,989)
-
(112,595)



At 31 March 2024

4,364,531
340,557
1,283,278
590,619
77,547
6,656,532



Depreciation


At 1 April 2023
2,925,298
239,073
767,952
458,435
-
4,390,758


Charge for the year on owned assets
404,621
12,506
160,427
48,476
-
626,030


Disposals
(84,063)
-
(935)
(16,251)
-
(101,249)



At 31 March 2024

3,245,856
251,579
927,444
490,660
-
4,915,539



Net book value



At 31 March 2024
1,118,675
88,978
355,834
99,959
77,547
1,740,993



At 31 March 2023
1,458,783
101,484
515,461
113,431
-
2,189,159

Page 24
 
KENTEC ELECTRONICS LIMITED
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2024

13.


Stocks

2024
2023
£
£

Raw materials and consumables
5,253,415
5,860,035

Work in progress (goods to be sold)
1,942,547
1,124,423

Finished goods and goods for resale
257,624
204,607

Finished goods purchased
1,298,228
718,297

8,751,814
7,907,362


Stock recognised in cost of sales during the year as an expense was £20,532,274 (2023 - £3,997,868).


14.


Debtors

2024
2023
£
£


Trade debtors
4,140,852
3,027,805

Amounts owed by group undertakings
1,490,245
1,688,109

VAT repayable
40,030
116,809

Prepayments and accrued income
354,028
556,779

6,025,155
5,389,502



15.


Cash and cash equivalents

2024
2023
£
£

Cash at bank and in hand
2,805,279
2,319,524

2,805,279
2,319,524


Page 25

 
KENTEC ELECTRONICS LIMITED
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2024

16.


Creditors: Amounts falling due within one year

2024
2023
£
£

Trade creditors
3,850,984
3,569,752

Amounts owed to group undertakings
225,060
1,561,153

Corporation tax
230,938
37,106

Other taxation and social security
169,310
167,511

Net obligations under finance leases and hire purchase contracts
77,865
181,357

Accruals and deferred income
1,806,270
1,316,495

6,360,427
6,833,374



17.


Creditors: Amounts falling due after more than one year

2024
2023
£
£

Net obligations under finance leases and hire purchase contracts
-
74,615

-
74,615



18.


Hire purchase and finance leases


2024
2023
£
£


Within one year
77,865
181,357

Between 1-5 years
-
74,615

77,865
255,972

Page 26

 
KENTEC ELECTRONICS LIMITED
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2024

19.


Deferred taxation




2024


£






At beginning of year
(242,185)


Charged to Statement of Income
52,293



At end of year
(189,892)

The provision for deferred taxation is made up as follows:

2024
2023
£
£


Accelerated capital allowances
(209,544)
(256,736)

Pension surplus
19,652
14,551

(189,892)
(242,185)


20.


Provisions




Dilapidation Provision

£





At 1 April 2023
664,664


Charged to profit or loss
18,907



At 31 March 2024
683,571

The provision is for the 5 units which are rented in Dartford namely as factory space for the manufacture of the companies products, which they have been doing for a number of years. Significant amedments have been made for the companies use and they must provide for the future costs to restore the premises back to their original condition on termination of the leases. 


21.


Share capital

2024
2023
£
£
Authorised, allotted, called up and fully paid



18,600 (2023 - 18,600) Ordinary shares of £1 each
18,600
18,600


Page 27

 
KENTEC ELECTRONICS LIMITED
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2024

22.


Reserves

Profit and loss account

The profit and loss account reserve consists of the cumulative total of all current and prior period profits and losses. 

23.


Commitments under operating leases

At 31 March 2024 the Company had future minimum lease payments due under non-cancellable operating leases for each of the following periods:

2024
2023
£
£


Not later than 1 year
444,930
445,013

Later than 1 year and not later than 5 years
1,476,469
1,658,494

Later than 5 years
111,083
363,047

2,032,482
2,466,554


24.


Controlling party

Kentec Electronics Limited is a private limited company registered in England and Wales. The address of the registered office is Unit 25&26 Fawkes Avenue, Questor, Dartford, Kent, DA1 1JQ.

The immediate and ultimate parent undertaking is Hochiki Corporation, a company incorporated in Japan. Hochiki Corporation is the parent undertaking of the largest and smallest group of undertakings to consolidate these financial statements at 31 March 2024. The consolidated financial statements of Hochiki Corporation are available from 2-10-43 Kamiosake Shinagawa-Ku, Tokyo, 141-8660, Japan.

Page 28