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img7a13.png






Consolidated Financial Statements
ACR UK Holdings Ltd
For the year ended 31 December 2023





































Registered number: 08079257

 
ACR UK Holdings LTD
 

Company information


Directors
D J Grierson 
F W Quinn 




Registered number
08079257



Registered office
Unit 4 Ocivan Way
Margate

Kent

England

CT9 4NN




Independent auditor
Grant Thornton
Chartered Accountants & Statutory Auditors

13-18 City Quay

Dublin 2

Republic of Ireland





 
ACR UK Holdings LTD
 

Contents



Page
Group strategic report
1 - 2
Directors' report
3 - 5
Directors' responsibilities statement
6
Independent auditor's report
7 - 10
Consolidated statement of comprehensive income
11
Consolidated statement of financial position
12
Company statement of financial position
13
Consolidated statement of changes in equity
14 - 15
Company statement of changes in equity
16
Consolidated statement of cash flows
17
Consolidated analysis of net debt
18
Notes to the financial statements
19 - 39


 
ACR UK Holdings LTD
 

Group strategic report
For the year ended 31 December 2023

Introduction
 
The Strategic report for the year ended 31 December 2023 is set out below.

Business review
 
As shown in the Group's Statement of comprehensive income, sales revenues have increased by 20% over the prior year.
Operating profit for the year (before interest and tax) was £7,290,891 (2022: £1,304,662).

During 2023, the Group experienced growth in the aerospace market resulting in increased hardware and communications services revenues and increased gross profit due to higher sales volumes.  
The Group’s key measurement of the effectiveness of its operations is return on sales. The Company achieved a return on sales of 13.4% (2022: 5.5%).
Return on sales provides a measure of profitability that shows how efficiently the organization is utilising its resources in its operations.
Another key measure tracked by the Group is the number of safety lost day incidents per year. The Company had 0 lost day incidents during 2023 (2022: 0). 

Principal risks and uncertainties
 
Economic downturn 
The principal risk to the business is a fall in demand for goods and services, whether due to loss of customers, a change in customer preferences or a decline in demand.

Other risks that the board consider important include information security (especially in light of GDPR), customer non payment, IT security, loss of key staff and pricing fluctuations resulting from market pressures. 

Health and safety risks 
Responsibility for the delivery of world class safety standards is an integral part of the operational management accountability and the Group's management are therefore expected to embrace a positive safety culture and to demonstrate leadership and commitment in the workplace. ACR Group's stated aim is to achieve zero injuries and to reduce health and safety risks, where they cannot be eliminated altogether, to a level which is "as low as reasonably practicable". 

Timing of orders 
The majority of the Group's contracts are of a relatively short duration and, with the exception of framework contracts with key customers, do not usually cover multi year requirements. This means that an unmitigated delay in the receipt of key orders could affect earnings. Maximising order intake is therefore a key priority for the Company. 

Product development 
ACR Group's approach to innovation and continued research and development activity ensures the product range is continually refreshed and updated. The Group undertakes research and development activities. The total expenditure in the year amounted to £3,439,465 (2022: £1,985,907).

Financial risks
The Group's financing arrangements were included within ACR Group's overall facilities. ACR UK Holdings Ltd and its subsidiaries are part of a larger group with its ultimate parent entity in the Netherlands. 

Page 1

 
ACR UK Holdings LTD
 

Group strategic report (continued)
For the year ended 31 December 2023

Financial key performance indicators
 
The key performance indicators measured by the Group have been noted above in the business review.

Other key performance indicators
 
The other key performance indicators measured by the Group have been noted above in the business review.

Future developments

No significant changes to the business are expected in the foreseeable future.

Directors' statement of compliance with duty to promote the success of the Group
 
The Board of Directors consider that they have acted in good faith in a way that would be most likely to promote the success of the Company for the benefit of its members as a whole in the decisions taken during the year ended 31 December 2023. The Company is a holding company that owns certain operations of a larger group. Each year, each of the Company’s subsidiaries present an operating plan to management of the larger group, which includes the directors of the Company. The directors consider the long term consequences of the decisions and actions laid out in the annual plan. Additionally, the operating results, progress made against strategic initiatives, employee safety and other matters relating the members as a whole are reviewed monthly during the year.

The plan was designed to have a long term beneficial impact on the Company and its members and to contribute to its success by delivering high quality products and services, many of which keep people safe and help save lives. The plan supports initiatives to develop new products and services that are seen by our customers and business partners as a leading source of innovation and problem solving.
Our employees are fundamental to the delivery of the Company’s plan. The Company aims to be a responsible employer in its approach to pay and benefits for its employees. The health and safety of our employees is one of the primary considerations in the way the Company does business.
The Company also aims to act responsibly and fairly in how it engages with its customers, suppliers and other stakeholders, all of which are integral to the successful delivery of the plan.
The plan considers the impact of the Company’s operations on the communities that it operates in, on the environment and its wider social responsibilities.

The Board of Directors intention is to behave responsibly and ensure that management operates the business in a responsible manner with high standards of business conduct and good governance, considering the need to act fairly between all members of the Company.


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



................................................
D J Grierson
Director

Date: 8 November 2024

Page 2

 
ACR UK Holdings LTD
 
 
Directors' report
For the year ended 31 December 2023

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

Principal activity

The Company's principal activity is a holding company.

The principal activity of its subsidiaries is the design and manufacture of maritime and land terrestrial/satellite communications products used in the Search and Rescue ecosystem, plastic moulding and assembly of components for the sea safety market, provide aviation services and products to commercial and military customers, provide flight data and communication technology and the design and manufacture of flight data monitoring, flight following, satellite data link and voice communication equipment and services.

Results and dividends

The profit for the year, after taxation, amounted to £2,725,053 (2022: loss £2,112,728). 

Dividends of £12,064,593 were declared during the year (2022: £Nil).

Directors

The directors who served during the year were:

D J Grierson 
F W Quinn 

Engagement with employees

The Group has a culture of continuous improvement through investment in people at all levels within the Group.

The Group is committed to pursuing equality and diversity in all its employment activities including recruitment, training, career development and promotion and ensuring there is no bias or discrimination in the treatment of people. In particular, applications for employment are welcomed from persons with disabilities, and special arrangements and adjustments as necessary are made to ensure that applicants are treated fairly when attending for interview or for pre employment aptitude tests. 

Wherever possible the opportunity is taken to retrain people who become disabled during their employment in order to maintain their employment within the Group.

Qualifying third party indemnity provisions

Qualifying third party indemnity insurance is in place for the directors.

Going concern

In assessing whether the financial statements for the Group should be prepared on the going concern basis, the directors have considered the future outlook of the Group, including future operating profits, cash flows and facilities available to the Group, including the impact wider macro-economic factors are expected to have on the cashflows and operations.

The principal risk to the business is a fall in demand for services, whether due to loss of customers or a decline in demand.

Other risks that the board consider important include information security (especially in light of GDPR), customer non payment, IT security, loss of key staff and pricing fluctuations resulting from market pressures.
Page 3

 
ACR UK Holdings LTD
 
Directors' report (continued)
For the year ended 31 December 2023

Going concern (continued)

Having considered the Group’s funding position and financial projections, the directors have concluded these conditions do not indicate a significant doubt over the Group's ability to continue as a going concern.

The directors are satisfied that the Company and Group will have sufficient funds to repay its liabilities as they fall due and adequate resources to continue in operational existence for the foreseeable future. Consequently, the financial statements of the Group are prepared on the going concern basis. 

Matters covered in the Group Strategic report

Key performance indicators, principal risks and uncertainties, future developments, research and developments and a business review for the year ended 31 December 2023 are disclosed in the Strategic report as required by s414C(11). 

Streamlined Energy and Carbon Reporting

The following SECR disclosures presents our carbon footprint within the United Kingdom across Scope 1 and 2 emissions. We have followed the 2019 HM Government Environmental Reporting Guidelines and used the GHG Reporting Protocol – Corporate Standard, as well as the 2023 GHG UK Reporting Conversion Factors.


2023
2022
2023
2022

tCO2e
tCO2e
kWh
kWh
Direct emissions




Combustion of gas and use of fuel for transport
21
21
95,568
96,933
Total - Scope 1
21
21
95,568
96,933
Indirect emissions (for own use)




Purchase of electricity
28
30
136,251
154,264
Total - Scope 2
28
30
136,251
154,264
Gross emissions
49
51


Intensity ratio: tCO2/£1,000,000 turnover
0.90
0.94




Intensity measurement

The directors have chosen the metric gross global scope 1 and 2 emissions in tonnes of CO2e per £1,000,000 turnover as this is a common business metric for their industry sector. The intensity measurement has fallen this year due to various UK projects implemented to improve energy efficiency and reduce energy consumption.

Energy efficiency action

The Group has taken the following measures to improve energy efficiency and reduce energy consumption through various UK projects including:

Relocation of the Flight Data Systems Limited subsidiary to a smaller facility in 2023, which included changing the heating supply from natural gas to electric and installation of hot and cold-water dispenser to replace individual kettle usage by employees.  
Ocean Signal Limited subsidiary relocated in 2020 to a new modern facility outfitted with LED light fittings and the latest heating and cooling systems.

Page 4

 
ACR UK Holdings LTD
 
Directors' report (continued)
For the year ended 31 December 2023

Disclosure of information to auditor

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 auditor is 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 auditor is aware of that information.

Events since the end of the year

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

Auditor

The auditor, Grant Thornton, was appointed during the year and will continue in office in accordance with section 485 of the Companies Act 2006.

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



................................................
D J Grierson
Director

Date: 8 November 2024

Page 5

 
ACR UK Holdings LTD
 

Directors reposibilities statement
For the year ended 31 December 2023

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 Company and the Group for that period.

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

select suitable accounting policies for the Company's and the Group's financial statements and then apply them consistently;
make judgments and accounting estimates that are reasonable and prudent;
state whether the financial statements have been prepared in accordance with applicable accounting standards, identify those standards, and note the effect and the reasons for any material departure from those standards; and
prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Company and 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 and the Group'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.

On behalf of the board



................................................
D J Grierson
Director

Date: 8 November 2024

Page 6

 
 
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Independent auditor's report to the members of ACR UK Holdings LTD
 
Opinion


We have audited the financial statements of ACR UK Holdings Ltd (the 'parent Company') and its subsidiaries (the 'Group'), which comprise the Consolidated Statement of comprehensive income, the Consolidated and Company Statements of financial position, the Consolidated Statement of cash flows, the Consolidated and Company Statement of changes in equity for the financial year ended 31 December 2023, and the related notes to the financial statements, including a summary of significant accounting policies.  

The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland' (United Kingdom Generally Accepted Accounting Practice).


In our opinion, ACR UK Holdings Ltd's financial statements:


give a true and fair view in accordance with United Kingdom Generally Accepted Accounting Practice of the assets, liabilities and financial position of the Group and the Company as at 31 December 2023 and of the Group's financial performance and cash flows for the financial year then ended; 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 'Responsibilities of the auditor for the audit of the financial statements' section of our report. We are independent of the Group and  Company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the United Kingdom, namely the FRC's Ethical Standard and the ethical pronouncements established by Chartered Accountants Ireland, applied as determined to be appropriate in the circumstances of the entity. 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 the date 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


 
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Independent auditor's report to the members of ACR UK Holdings LTD (continued)

 
Other matter


The consolidated financial statements of ACR UK Holdings Ltd for the year ended 31 December 2022 were audited by Grant Thornton UK LLP who expressed an unmodified opinion on those statements on 10 November 2023.


Other information


Other information comprises the information included in the Annual Report, other than the financial statements and our Auditor's report thereon, including the Directors' report and the Strategic Report. The directors are responsible for the other information. Our opinion on the financial statements does not cover the information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon.


In connection with our audit of the financial statementsour responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit, or otherwise appears to be materially misstated. If we identify such material inconsistencies in the financial statements, we are required to determine whether there is a material misstatement in the financial statements or a material misstatement of the other information. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.


We have nothing to report in this regard.


Opinions 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 Directors' report and the Strategic Report for the financial year for which the financial statements are prepared is consistent with the financial statements, and 
the Directors' report and the Strategic 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 we have obtained in the course of the audit, we have not identified material misstatements in the  Directors' report and the Strategic Report.

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


adequate accounting records have not been kept by the parent Company, or returns adequate for our audit have not been received from branches not visited by us; or

the parent Company financial statements are not in agreement with the accounting records and returns; or

certain disclosures of directors' remuneration specified by law are not made; or

we have not received all the information and explanations we require for our audit.
Page 8


 
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Independent auditor's report to the members of ACR UK Holdings LTD (continued)

Responsibilities of management and those charged with governance for the financial statements
 

Management is responsible for the preparation of the financial statements which give a true and fair view in accordance with United Kingdom Generally Accepted Accounting Practice, including FRS102 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, management is responsible for assessing the Group and 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 management either intend to liquidate the Group and Company or to cease operations, or has no realistic alternative but to do so.

Those charged with governance are responsible for overseeing the Group and Company's financial reporting process.

Responsibilities of the auditor for the audit of the financial statements
 

The objectives of an auditor are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an Auditor's report that includes their 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.

A further description of an auditor's 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 auditor's report.

Explanation as to what extent the audit was considered capable of detecting irregularities, including fraud
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. Owing to the inherent limitations of an audit, there is an unavoidable risk that material misstatement in the financial statements may not be detected, even though the audit is properly planned and performed in accordance with ISAs (UK).

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

Based on our understanding of the Group and industry, we identified that the principal risks of non-compliance with laws and regulations related to Employment laws, Health and Safety Regulation and we considered the extent to which non-compliance might have a material effect on the financial statements. We also considered those laws and regulations that have a direct impact on the preparation of the financial statements such as UK tax legislation and the Companies Act 2006. The Audit engagement partner considered the experience and expertise of the engagement team to ensure that the team had appropriate competence and capabilities to identify or recognise non-compliance with the laws and regulation. We evaluated management’s incentives and opportunities for fraudulent manipulation of the financial statements (including the risk of override of controls), and determined that the principal risks were related to posting inappropriate journal entries to manipulate financial performance and management bias through judgements and assumptions in significant accounting estimates, in particular in relation to significant one-off or unusual transactions. We apply professional scepticism through the audit to consider potential deliberate omission or concealment of significant transactions, or incomplete/inaccurate disclosures in the financial statements.
Page 9


 
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Independent auditor's report to the members of ACR UK Holdings LTD (continued)

Responsibilities of the auditor for the audit of the finanical statements (continued)

Explanation as to what extent the audit was considered capable of detecting irregularities, including fraud (continued)

In response to these principal risks, our audit procedures included but were not limited to:
enquiries of management and board on the policies and procedures in place regarding compliance with laws and regulations, including consideration of known or suspected instances of non-compliance and whether they have knowledge of any actual, suspected or alleged fraud;
inspection of the Group and Company’s regulatory and legal correspondence and review of minutes of board meetings during the year to corroborate inquiries made;
gaining an understanding of the internal controls established to mitigate risk related to fraud;
discussion amongst the engagement team in relation to the identified laws and regulations and regarding the risk of fraud, and remaining alert to any indications of non-compliance or opportunities for fraudulent manipulation of financial statements throughout the audit;
identifying and testing journal entries to address the risk of inappropriate journals and management override of controls;
designing audit procedures to incorporate unpredictability around the nature, timing or extent of our testing;
challenging assumptions and judgements made by management in their significant accounting estimates, including the impairment of investments, useful economic life of intangible and tangible assets, provision for doubtful debts and warranty provision;
review of the financial statements disclosures to underlying supporting documentation and inquiries of management.

The primary responsibility for the prevention and detection of irregularities including fraud rests with those charged with governance and management. As with any audit, there remains a risk of non-detection or irregularities, as these may involve collusion, forgery, intentional omissions, misrepresentations or override of internal controls.

The purpose of our audit work and to whom we owe our responsibilities
 

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


 
 
Jason Crawford (Senior statutory auditor)
for and on behalf of
Grant Thornton
Chartered Accountants &
Statutory Auditors
13-18 City Quay
Dublin 2
Republic of Ireland
 
Date:
 8 November 2024
Page 10

 
ACR UK Holdings LTD
 

Consolidated statement of comprehensive income
For the year ended 31 December 2023

2023
2022
Note
£
£

  

Turnover
 4 
54,273,219
45,049,448

Cost of sales
  
(23,572,687)
(18,629,550)

Gross profit
  
30,700,532
26,419,898

Administrative expenses
  
(23,662,770)
(24,925,145)

Other operating income/(expense)
 5 
253,129
(190,091)

Operating profit
 6 
7,290,891
1,304,662

Interest payable and similar expenses
 10 
(1,925,975)
(2,035,759)

Profit/(loss) before taxation
  
5,364,916
(731,097)

Tax on profit/(loss)
 11 
(2,639,863)
(1,381,631)

Profit/(loss) for the financial year
  
2,725,053
(2,112,728)

  

Currency translation differences
  
(859,823)
211,272

Total comprehensive income for the year
  
1,865,230
(1,901,456)

Profit/(loss) for the year attributable to:
  

Non-controlling interests
  
(3,930)
(248,981)

Owners of the parent Company
  
2,728,983
(1,863,747)

  
2,725,053
(2,112,728)

Total comprehensive income for the year attributable to:
  

Non-controlling interest
  
(17,745)
(208,625)

Owners of the parent Company
  
1,882,975
(1,692,831)

  
1,865,230
(1,901,456)

All amounts relate to continuing operations.
The notes on pages 19 to 39 form part of these financial statements.

Page 11

 
ACR UK Holdings LTD
Registered number:08079257

Consolidated statement of financial position
As at 31 December 2023

As restated
2023
2022
Note
£
£

Fixed assets
  

Intangible assets
 13 
25,550,803
32,824,482

Tangible assets
 14 
2,177,085
1,834,312

  
27,727,888
34,658,794

Current assets
  

Stocks
 16 
8,133,825
7,887,120

Debtors: amounts falling due within one year
 17 
15,873,006
22,066,367

Cash at bank and in hand
 18 
2,339,979
1,750,600

  
26,346,810
31,704,087

Current liabilities
  

Creditors: amounts falling due within one year
 19 
(51,604,903)
(53,373,336)

Net current liabilities
  
 
 
(25,258,093)
 
 
(21,669,249)

Total assets less current liabilities
  
2,469,795
12,989,545

Provisions for liabilities
  

Deferred taxation
 20 
(1,663,461)
(1,983,848)

  
 
 
(1,663,461)
 
 
(1,983,848)

Net assets
  
806,334
11,005,697


Capital and reserves
  

Called up share capital 
 21 
4,701,830
4,701,830

Foreign exchange reserve
 22 
(3,978,993)
(3,132,985)

Profit and loss account
 22 
(353,116)
8,982,494

Non-controlling interests
 22 
436,613
454,358

Shareholder's funds
  
806,334
11,005,697


The financial statements were approved and authorised for issue by the board and were signed on its behalf on 8 November 2024.


................................................
D J Grierson
Director

The notes on pages 19 to 39 form part of these financial statements.

Page 12

 
ACR UK Holdings LTD
Registered number:08079257

Company statement of financial postition
As at 31 December 2023

As restated
2023
2022
Note
£
£

Fixed assets
  

Investments
 15 
61,403,824
62,138,322

  
61,403,824
62,138,322

Current assets
  

Debtors: amounts falling due within one year
 17 
18,948,294
191,997

Cash at bank and in hand
 18 
27,352
36,540

  
18,975,646
228,537

Current liabilities
  

Creditors: amounts falling due within one year
 19 
(46,875,945)
(20,565,287)

Net current liabilities
  
 
 
(27,900,299)
 
 
(20,336,750)

Net assets
  
33,503,525
41,801,572


Capital and reserves
  

Called up share capital 
 21 
4,701,830
4,701,830

Profit and loss account brought forward
 22 
37,099,742
36,704,615

Profit for the year
 22 
3,766,546
395,127

Dividends

 12 

(12,064,593)
-

Profit and loss account carried forward
 22 
28,801,695
37,099,742

Shareholder's funds
  
33,503,525
41,801,572


The financial statements were approved and authorised for issue by the board and were signed on its behalf on 8 November 2024.


................................................
D J Grierson
Director

The notes on pages 19 to 39 form part of these financial statements.

Page 13
 

ACR UK Holdings LTD
 
 
 


Consolidated statement of changes in equity
For the year ended 31 December 2023



Called up share capital
Foreign exchange reserve
Profit and loss account
Equity attributable to owners of parent Company
Non-controlling interests
Total equity


£
£
£
£
£
£


At 1 January 2023 (as restated)
4,701,830
(3,132,985)
8,982,494
10,551,339
454,358
11,005,697



Comprehensive income for the year


Profit for the year
-
-
2,728,983
2,728,983
(3,930)
2,725,053


Currency translation differences
-
(846,008)
-
(846,008)
(13,815)
(859,823)


Dividends: Equity capital
-
-
(12,064,593)
(12,064,593)
-
(12,064,593)



At 31 December 2023
4,701,830
(3,978,993)
(353,116)
369,721
436,613
806,334



The notes on pages 19 to 39 form part of these financial statements.

Page 14  

 

ACR UK Holdings LTD
 
 
 


Consolidated statement of changes in equity
For the year ended 31 December 2022



Called up share capital
Foreign exchange reserve
Profit and loss account
Equity attributable to owners of parent Company
Non-controlling interests
Total equity


£
£
£
£
£
£


At 1 January 2022 (as previously stated)
4,701,830
(3,303,901)
6,605,176
8,003,105
662,983
8,666,088


Prior year adjustment (Note 23)
-
-
4,241,065
4,241,065
-
4,241,065


At 1 January 2022 (as restated)
4,701,830
(3,303,901)
10,846,241
12,244,170
662,983
12,907,153



Comprehensive income for the year


Loss for the year
-
-
(1,863,747)
(1,863,747)
(248,981)
(2,112,728)


Currency translation differences
-
170,916
-
170,916
40,356
211,272



At 31 December 2022 (as restated)
4,701,830
(3,132,985)
8,982,494
10,551,339
454,358
11,005,697



The notes on pages 19 to 39 form part of these financial statements.

Page 15  
 
ACR UK Holdings LTD
 

Company statement of changes in equity
For the year ended 31 December 2023


Called up share capital
Profit and loss account
Total equity

£
£
£

At 1 January 2023 (as restated)
4,701,830
37,099,742
41,801,572


Comprehensive income for the year

Profit for the year
-
3,766,546
3,766,546

Dividends: Equity capital
-
(12,064,593)
(12,064,593)


At 31 December 2023
4,701,830
28,801,695
33,503,525



Company statement of changes in equity
For the year ended 31 December 2022


Called up share capital
Profit and loss account
Total equity

£
£
£

At 1 January 2022 (as previously stated)
4,701,830
32,463,550
37,165,380

Prior year adjustment (Note 23)
-
4,241,065
4,241,065

At 1 January 2022 (as restated)
4,701,830
36,704,615
41,406,445


Comprehensive income for the year

Profit for the year
-
395,127
395,127


At 31 December 2022 (as restated)
4,701,830
37,099,742
41,801,572


The notes on pages 19 to 39 form part of these financial statements.

Page 16

 
ACR UK Holdings LTD
 

Consolidated statement of cashflows
For the year ended 31 December 2023

2023
2022
£
£

Cash flows from operating activities

Profit/(loss) for the financial year
2,725,053
(2,112,728)

Adjustments for:

Amortisation of intangible assets
6,336,011
6,458,944

Depreciation of tangible assets
618,442
609,381

Interest paid
1,925,975
2,035,759

Taxation charge
2,639,863
1,381,631

Increase in stocks
(246,705)
(3,432,302)

Decrease/(increase) in debtors
4,033,208
(8,955,570)

(Decrease)/increase in creditors
(3,726,363)
3,298,810

Corporation tax paid
(270,345)
(1,125,367)

Foreign exchange movements on translation
130,961
(3,188,711)

Net cash generated from/(used in) operating activities

14,166,100
(5,030,153)


Cash flows from investing activities

Purchase of intangible fixed assets
(27,670)
(1,381,924)

Purchase of tangible fixed assets
(986,661)
(628,962)

Net cash used in investing activities

(1,014,331)
(2,010,886)

Cash flows from financing activities

Dividends paid
(12,064,593)
-

Interest paid
(497,797)
(242,110)

Net cash used in financing activities
(12,562,390)
(242,110)

Net increase/(decrease) in cash and cash equivalents
589,379
(7,283,149)

Cash and cash equivalents at beginning of year
1,750,600
9,033,749

Cash and cash equivalents at the end of year
2,339,979
1,750,600


Cash and cash equivalents at the end of year comprise:

Cash at bank and in hand
2,339,979
1,750,600


The notes on pages 19 to 39 form part of these financial statements.

Page 17

 
ACR UK Holdings LTD
 

Consolidated analysis of net debt
For the year ended 31 December 2023




At 1 January 2023
Cash flows
At 31 December 2023
£

£

£

Cash at bank and in hand

1,750,600

589,379

2,339,979


1,750,600
589,379
2,339,979

The notes on pages 19 to 39 form part of these financial statements.

Page 18

 
ACR UK Holdings LTD
 
 
Notes to the financial statements
For the year ended 31 December 2023

1.


General information

ACR UK Holdings Ltd is a limited liability company incorporated in England and Wales. The registered office is Unit 4 Ocivan Way, Margate, Kent, England, CT9 4NN. 

The Company's principal activity is a holding company.

The principal activity of its subsidiaries is the design and manufacture of maritime and land terrestrial/satellite communications products used in the Search and Rescue ecosystem, plastic moulding and assembly of components for the sea safety market, provide aviation services and products to commercial and military customers, provide flight data and communication technology and the design and manufacture of flight data monitoring, flight following, satellite data link and voice communication equipment and services.

2.Accounting policies

 
2.1

Basis of preparation of financial statements

The financial statements have been prepared under the historical cost convention 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 Company financial statements are presented in Sterling and all values are rounded to the nearest pound (£) except when otherwise stated.

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.

FRS102 allows certain disclosure exemptions and the company has taken advantage of the following exemptions for the company financial statements:
From preparing a statement of cash flows, on the basis that it is a qualifying entity and the consolidated statement of cash flows, included in these financial statements, includes the company’s cash flows;
From the financial instruments disclosures required under FRS102 paragraphs 11.39 to 11.48A and paragraphs 12.26 – 12.29, as the information is provided in the consolidated statement disclosures; and
From disclosing the company key management personnel compensation, as required by FRS102 paragraph 33.7, as the information is included within the consolidated statement disclosures.

The following principal accounting policies have been applied:

Page 19

 
ACR UK Holdings LTD
 
Notes to the financial statements
For the year ended 31 December 2023

2.Accounting policies (continued)

 
2.2

Basis of consolidation

The consolidated financial statements present the results of the Company and its own subsidiaries ("the Group") as if they form a single entity. Intercompany transactions and balances between group companies are therefore eliminated in full.
The consolidated financial statements incorporate the results of business combinations using the purchase method. In the Statement of financial position, the acquiree's identifiable assets, liabilities and contingent liabilities are initially recognised at their fair values at the acquisition date. The results of acquired operations are included in the Consolidated statement of comprehensive income from the date on which control is obtained. They are deconsolidated from the date control ceases.
 
 
2.3

Going concern

The Group reported profit for the year of £2.7m and net current liabilities of £25.3m, net assets of £0.8m and a cash inflow for the year of £0.6m. 

As at 31 December 2023 the Group’s financing arrangements consisted of intra-group loans of £43.9m, these intra-group loans have no fixed repayment date and attract interest of 5% annually. ACR UK Holdings has access to a revolving credit facility through its parent entity in order to ensure it can meet its liabilities when they fall due. The Group also held £2.3m of readily available cash in bank accounts. The Group’s forecasts and projections, taking into account reasonably possible changes in trading performance show that the Group will be able to operate for a forecast period of at least 12 months from the approval date of these financial statements. Accordingly, the Group continues to adopt the going concern basis in preparing its consolidated financial statements.

The directors have prepared detailed profit and loss and cash flow forecasts in to 2025 on a cautiously realistic basis. This takes into account the performance already seen in 2024 as a result of some sensitivity in respect of supply chain and cost base increases. The Group is in a position to flex certain costs, including headcount, travel, etc. in response to unfavourable variation in revenue. It is also assumed that customers will continue to pay to agreed terms in the normal manner, as there have been no changes to terms and conditions operational existence for the foreseeable future. Thus, the directors continue to adopt the going concern basis of accounting in preparing the financial statements.

 
2.4

Revenue

Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Group and the revenue can be reliably measured. Revenue is measured as the fair value of the consideration received or receivable, excluding discounts, rebates, value added tax and other sales taxes. 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 Group has transferred the significant risks and rewards of ownership to the buyer;
the Group 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 Group 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 20

 
ACR UK Holdings LTD
 
Notes to the financial statements
For the year ended 31 December 2023

2.Accounting policies (continued)


2.4
Revenue (continued)

Rendering of services

Revenue from a contract to provide services is recognised in the period in which the services are provided in accordance with the stage of completion of the contract when all of the following conditions are satisfied:
the amount of revenue can be measured reliably;
it is probable that the Group will receive the consideration due under the contract;
the stage of completion of the contract at the end of the reporting period can be measured reliably; and
the costs incurred and the costs to complete the contract can be measured reliably.

 
2.5

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.

 
2.6

Research and development

In the research phase of an internal project it is not possible to demonstrate that the project will generate future economic benefits and hence all expenditure on research shall be recognised as an expense when it is incurred. Intangible assets are recognised from the development phase of a project if and only if certain specific criteria are met in order to demonstrate the asset will generate probable future economic benefits and that its cost can be reliably measured. The capitalised development costs are subsequently amortised on a straight-line basis over their useful economic lives of 10 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.

 
2.7

Foreign currency translation

Functional and presentation currency

The Company's functional and presentational currency is GBP.
 
Page 21

 
ACR UK Holdings LTD
 
Notes to the financial statements
For the year ended 31 December 2023

2.Accounting policies (continued)


2.7
Foreign currency translation (continued)

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 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.
 
 
2.8

Finance costs

Finance costs are charged to profit or loss over the term of the debt using the effective interest method so that the amount charged is at a constant rate on the carrying amount. Issue costs are initially recognised as a reduction in the proceeds of the associated capital instrument.

 
2.9

Pensions

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

Page 22

 
ACR UK Holdings LTD
 
Notes to the financial statements
For the year ended 31 December 2023

2.Accounting policies (continued)

 
2.10

 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 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.

 
2.11

 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 of 10 years.
 
Page 23

 
ACR UK Holdings LTD
 
Notes to the financial statements
For the year ended 31 December 2023

2.Accounting policies (continued)


2.11
 Intangible assets (continued)

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     - 3-10 years
  Development expenditure   - 10 years
  Trademarks    - 10-20 years

 
2.12

 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.

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:

Long-term leasehold property
-
over 8-12 years
Plant and machinery
-
over 4 years
Fixtures and fittings
-
over 4 years
Computer equipment
-
over 3-5 years

The assets' residual values, useful lives and depreciation methods are reviewed, and adjusted prospectively if appropriate, or if there is an indication of a significant change since the last reporting date.

Gains and losses on disposals are determined by comparing the proceeds with the carrying amount and are recognised in profit or loss.

 
2.13

 Valuation of investments

Investments in subsidiaries are measured at cost less accumulated impairment.

Page 24

 
ACR UK Holdings LTD
 
Notes to the financial statements
For the year ended 31 December 2023

2.Accounting policies (continued)

  
2.14

 Impairment of assets

At each reporting date fixed assets are reviewed to determine whether there is any indication that those assets have suffered an impairment loss. If there is an indication of possible impairment, the recoverable amount of any affected asset is estimated and compared with its carrying amount. If estimated recoverable amount is lower, the carrying amount is reduced to its estimated recoverable amount, and an impairment loss is recognised immediately in profit or loss.
If an impairment loss subsequently reverses, the carry amount of the asset is increased to the revised estimate of its recoverable amount, but not in excess of the amount that would have been determined had no impairment loss been recognised for the asset in prior years. A reversal of an impairment loss is recognised immediately in profit or loss.

 
2.15

 Stocks

Stocks are stated at the lower of cost and net realisable value, being the estimated selling price less costs to complete and sell. Cost is based on the cost of purchase on a first in, first out basis. Work in progress and finished goods include labour and attributable overheads.

At each reporting date, stocks are assessed for impairment. If stock is impaired, the carrying amount is reduced to its selling price less costs to complete and sell. The impairment loss is recognised immediately in profit or loss.

 
2.16

 Debtors

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

 
2.17

 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.

 
2.18

 Creditors

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

 
2.19

 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 25

 
ACR UK Holdings LTD
 
Notes to the financial statements
For the year ended 31 December 2023

2.Accounting policies (continued)

  
2.20

 Financial insturments

The Company only enters into basic financial instrument transactions that result in the recognition of financial assets and liabilities like trade and other debtors and creditors, loans from banks and other third parties, loans to related parties and investments in ordinary shares.

Debt instruments (other than those wholly repayable or receivable within one year), including loans and other accounts receivable and payable, 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 debtors and creditors, 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 in case of an out-right short-term loan that is not at market rate, the financial asset or liability is measured, initially at the present value of future cash flows discounted at a market rate of interest for a similar debt instrument and subsequently at amortised cost, unless it qualifies as a loan from a director in the case of a small company, or a public benefit entity concessionary loan.
 
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 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 Company 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 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.

 
2.21

 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.

Page 26

 
ACR UK Holdings LTD
 
 
Notes to the financial statements
For the year ended 31 December 2023

3.


Judgments in applying accounting policies and key sources of estimation uncertainty

The preparation of financial statements requires management to make judgements, estimates and assumptions that affect the amounts reported for assets and liabilities as at the Statement of financial position date and the amounts reports for revenues and expenses during the year. However, the nature of the estimation means that actual outcomes could differ from those estimates.

The following judgements have been made in these financial statements:

Impairment of investments
Where there are indicators of impairment, management performs impairment tests based on fair value less costs to sell or value in use, which includes estimates, for example, of market prices and the use of discount rates. In 2023, impairment charge of £734,498 (2022: £4,114,453) was recognised against the investment.

The following estimates have been made in these financial statements:

Estimating useful lives of tangible and intangible assets
The Group estimates the useful lives of tangible and intangible assets based over which assets are expected to be available for use. The estimated useful lives are reviewed periodically and are updated if expectations differ from previous estimates due to physical wear and tear, technical or commercial obsolescence and legal or other limits on the used of the assets.  In addition, estimation of the useful lives of tangible and intangible fixed assets is based on collective assessment of industry practice, internal technical evaluation and experience with similar assets. See Note 13 for the carrying amount of intangible assets, Note 14 for the carrying amount of tangible assets, and Note 2.11 and Note 2.12 for the useful economic lives for each class of assets.

Providing allowance for slow-moving and obsolete inventory
Management evaluates the realisability of inventory on a case-by-case basis and make adjustments to inventory provision based on an analysis of the historical usage of the individual inventory items. The Group’s core business is subject to market changes which may cause inventory obsolescence and is considered a key source of estimation uncertainty. As at 31 December 2023, stocks amounted to £8,133,825 (2022: £7,887,120), net of stock provision at £313,123 (2022: £190,645).

Provision for doubtful debts
The Group makes allowance for doubtful debts based on the evaluation that management performs of the length of the relationship with the customer or contractor, the current credit status of the customer, and the average aging and the history of the payment. During the year, an impairment loss of £4,263 (2022: £1,404) was recognised against trade debtors.

Warranty Provision
The Group estimates the size of warranty provision required on some of the products that its sells. The provision is based on an average of historic experience of returns which currently equates to 1.5%. Warranty provision as of 31 December 2023 amounting to £493,951 (2022: £472,041) has been included as part of accruals and deferred income in the Group's Statement of financial position at year end.

Page 27

 
ACR UK Holdings LTD
 
 
Notes to the financial statements
For the year ended 31 December 2023

4.


Turnover

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


2023
2022
£
£

Sale of goods
36,229,932
30,632,091

Rendering of services
18,043,287
14,417,357

54,273,219
45,049,448


Analysis of turnover by country of destination:

2023
2022
£
£

United Kingdom
5,149,411
4,298,554

Europe
15,452,520
9,363,851

Rest of the world
33,671,288
31,387,043

54,273,219
45,049,448



5.


Other operating income/(expense)

2023
2022
£
£

Other operating income/(expense)
253,129
(190,091)



6.


Operating profit

The operating profit is stated after charging/(crediting):

2023
2022
£
£

Research & development charged as an expense
3,439,465
1,985,907

Depreciation of tangible fixed assets
618,442
609,381

Amortisation of intangible fixed assets, including goodwill
6,336,011
6,458,944

Exchange differences
(253,129)
824,260

Operating lease rentals
698,654
683,130

Page 28

 
ACR UK Holdings LTD
 
 
Notes to the financial statements
For the year ended 31 December 2023

7.


Auditor's remuneration

During the year, the Group obtained the following services from the Group's auditor and its associates:


2023
2022
£
£

Fees payable to the Group's auditor for the audit of the Group's annual accounts

44,500
46,500

Fees payable to the Group's auditor and its associates for the audit of the Group's annual accounts

Subsidiary audit fees
77,500
147,110

Other services relating to taxation
79,616
108,380

Accounts preparation fees

8,000
6,050

165,116
261,540


8.


Employees

Staff costs were as follows:


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


Wages and salaries
9,419,484
8,217,180
-
-

Social security costs
366,823
376,165
-
-

Cost of defined contribution scheme
698,836
626,787
-
-

10,485,143
9,220,132
-
-


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


        2023
        2022
            No.
            No.







Sales
17
17



Administrative
117
109



Production
52
41

186
167

The Company has no employees other than the directors, who did not receive any remuneration (2022: £Nil).
 
Page 29

 
ACR UK Holdings LTD
 
 
Notes to the financial statements
For the year ended 31 December 2023

9.


Directors' remuneration

The directors did not receive any remuneration (2022: £Nil) from the Group during the year.




10.


Interest (receivable)/payable and similar expenses

2023
2022
£
£


Bank interest (receivable)/payable
(1,408)
4,984

Loans from group undertakings
1,927,383
2,030,775

1,925,975
2,035,759


11.


Taxation


2023
2022
£
£

Corporation tax


Current tax on profit/(loss) for the year
2,904,785
1,119,331


Deferred tax


Origination and reversal of timing differences
(264,922)
262,300

Total deferred tax
(264,922)
262,300


Tax on profit/(loss)
2,639,863
1,381,631
Page 30

 
ACR UK Holdings LTD
 
 
Notes to the financial statements
For the year ended 31 December 2023
 
11.Taxation (continued)


Factors affecting tax charge for the year

The tax assessed for the year is higher than (2022 - higher than) the standard rate of corporation tax in the UK of 25% (2022 - 19%). The differences are explained below:

2023
2022
£
£


Profit/(loss) on ordinary activities before tax
5,364,916
(731,097)


Profit/(loss) on ordinary activities multiplied by standard rate of corporation tax in the UK of 25% (2022 - 19%)
1,341,229
(138,908)

Effects of:


Non-tax deductible amortisation of goodwill and impairment
1,372,829
1,296,792

Expenses not deductible for tax purposes
62,663
903

Capital allowances for year in excess of depreciation
42,929
10,456

Income at higher tax rate
74,896
11,797

Deferred tax
(264,922)
262,300

Other timing differences
10,239
(61,709)

Total tax charge for the year
2,639,863
1,381,631


Factors that may affect future tax charges

There are no factors which may affect future tax charges.


12.


Dividends

2023
2022
£
£


Dividends declared
12,064,593
-

Page 31

 
ACR UK Holdings LTD
 
 
Notes to the financial statements
For the year ended 31 December 2023

13.


Intangible assets

Group 





Patents
Development expenditure
Trademarks
Goodwill
Total

£
£
£
£
£



Cost


At 1 January 2023
1,195,209
4,452,449
3,675,138
56,429,410
65,752,206


Additions
27,670
-
-
-
27,670


Foreign exchange movement
-
(117,199)
(93,552)
(1,686,956)
(1,897,707)



At 31 December 2023

1,222,879
4,335,250
3,581,586
54,742,454
63,882,169



Amortisation


At 1 January 2023
742,689
2,310,432
760,593
29,114,010
32,927,724


Charge for the year
177,494
435,703
231,499
5,491,315
6,336,011


Foreign exchange movement
-
(60,553)
(18,272)
(853,544)
(932,369)



At 31 December 2023

920,183
2,685,582
973,820
33,751,781
38,331,366



Net book value



At 31 December 2023
302,696
1,649,668
2,607,766
20,990,673
25,550,803



At 31 December 2022
452,520
2,142,017
2,914,545
27,315,400
32,824,482

Goodwill arose from historical acquisition of subsidiaries, i.e. Ocean Signal Limited, Skytrac Systems Limited, Flight Data Systems Limited and Flight Data Systems Pty Limited.



Page 32

 
ACR UK Holdings LTD
 
 
Notes to the financial statements
For the year ended 31 December 2023

14.


Tangible fixed assets

Group






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

£
£
£
£
£



Cost or valuation


At 1 January 2023
1,289,325
4,001,649
640,434
1,629,333
7,560,741


Additions
291,885
331,418
54,697
308,661
986,661


Transfers between classes
201,878
(232,895)
30,089
928
-


Exchange adjustments
(93,693)
(8,807)
3,882
11,587
(87,031)



At 31 December 2023

1,689,395
4,091,365
729,102
1,950,509
8,460,371



Depreciation


At 1 January 2023
692,192
3,351,936
423,331
1,258,970
5,726,429


Charge for the year
126,740
216,351
65,151
210,200
618,442


Transfers between classes
79,013
(96,923)
17,910
-
-


Exchange adjustments
(86,689)
(9,732)
3,010
31,826
(61,585)



At 31 December 2023

811,256
3,461,632
509,402
1,500,996
6,283,286



Net book value



At 31 December 2023
878,139
629,733
219,700
449,513
2,177,085



At 31 December 2022
597,133
649,713
217,103
370,363
1,834,312

Page 33

 
ACR UK Holdings LTD
 
 
Notes to the financial statements
For the year ended 31 December 2023

15.


Fixed asset investments

Company





Investments in subsidiary companies

£



Cost or valuation


At 1 January 2023
66,252,775



At 31 December 2023

66,252,775



Impairment


At 1 January 2023
4,114,453


Charge for the period
734,498



At 31 December 2023

4,848,951



Net book value



At 31 December 2023
61,403,824



At 31 December 2022
62,138,322

Page 34

 
ACR UK Holdings LTD
 
 
Notes to the financial statements
For the year ended 31 December 2023

Subsidiary undertakings


The following were subsidiary undertakings of the Company:
Name

Registered office

Principal activity

Class of shares

Holding

Ocean Signal Limited
Unit 4 Ocivan Way, Margate, Kent, England, CT9 4NN
Design and production of marine communication products
Ordinary
100%
Skytrac Systems Limited
2400-745 Thurlow Street, Vancouver, Canada, BC V6E 0C5
Flight data and communication technology
Ordinary
94%
Flight Data Systems Pty Limited
31 McGregors Drive, Keilor Park, Australia, VIC 3042
Aviation services and products
Ordinary
100%
Flight Data Systems Limited
Suite 4 Heathrow, Boulevard 4, 280 Bath Road, West Drayton, Middlesex, England, UB7 0DQ
Aviation services and products
Ordinary
100%
ACR Electronics Australia Pty Limited
31 McGregors Drive, Keilor Park, Australia, VIC 3042
Intermediate holding company
Ordinary
100%

Flight Data Systems Limited (registered number 08182992) was entitled to exemption from the requirements of the Companies Act 2006 relating to the audit of its individual accounts by virtue of s479A of the Act relating to subsidiary companies.
ACR UK Holdings Limited has given a guarantee under s479C in respect of the year ended 31 December 2023 and this entity is included in these consolidated accounts.
The subsidiary entity has filed a written notice of the agreement of members, a statement of guarantee and a copy of these consolidated accounts together with their own individual financial statements.
There has been an impairment charge in the year of £734,498 (2022: £4,114,453) against the investment in Flight Data Systems Pty Limited. This entity ceased trading in the previous year and has been impaired to net asset value.


16.


Stocks

Group
Group
2023
2022
£
£

Raw materials and consumables
5,198,833
3,809,631

Finished goods and goods for resale
2,934,992
4,077,489

8,133,825
7,887,120


The carrying value of stocks are stated net of impairment losses totalling £313,123 (2022: £190,645).

17.


Debtors

Group
Group
Company
Company
2023
2022
2023
2022
Page 35

 
ACR UK Holdings LTD
 
 
Notes to the financial statements
For the year ended 31 December 2023

17.Debtors (continued)

£
£
£
£


Trade debtors
8,259,556
6,862,604
-
-

Amounts owed by group undertakings
4,200,174
11,000,639
18,948,294
191,997

Other debtors
188,388
524,303
-
-

Prepayments and accrued income
2,476,571
770,351
-
-

Tax recoverable
748,317
2,908,470
-
-

15,873,006
22,066,367
18,948,294
191,997


During the year, an impairment loss of £4,263 (2022: £1,404) was recognised against trade debtors.

Amounts owed by group undertakings are unsecured, have no fixed repayment date and attract an interest rate of 5%.


18.


Cash and cash equivalents

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

Cash at bank and in hand
2,339,979
1,750,600
27,352
36,540



19.


Creditors: Amounts falling due within one year

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

Trade creditors
2,529,249
3,014,267
-
-

Amounts owed to group undertakings
43,913,248
46,010,422
46,841,522
20,515,150

Corporation tax
2,077,316
1,547,564
-
-

Other taxation and social security
8,699
19,115
-
-

Other creditors
190,801
271,557
-
-

Accruals and deferred income
2,885,590
2,510,411
34,423
50,137

51,604,903
53,373,336
46,875,945
20,565,287


The majority of the loans due to parent undertaking comprise loans received for the purchase of subsidiaries.

Amounts owed to group undertakings include loans amounting to £43,796,808 (2022: £45,165,222) which are unsecured and have no fixed repayment date. The loans attract an interest rate of 5%. The remaining balances are unsecured, interest free and payable on demand.

Page 36

 
ACR UK Holdings LTD
 
 
Notes to the financial statements
For the year ended 31 December 2023

20.


Deferred taxation liability


Group



2023


£






At beginning of year
1,983,848


Charged to profit or loss
(264,922)


Foreign exchange movements on translation
(55,465)



At end of year
1,663,461

The provision for deferred taxation is made up as follows:

Group
Group
2023
2022
£
£

Accelerated capital allowances
63,109
68,471

Timing differences
1,600,352
1,915,377

1,663,461
1,983,848


21.


Share capital

2023
2022
£
£
Allotted, called up and fully paid



4,701,830 (2022 - 4,701,830) Ordinary shares of £1.00 each
4,701,830
4,701,830

Ordinary shares carry full voting, dividend and capital distribution, including on winding up, rights and are not redeemable.


22.


Reserves

Foreign exchange reserve

The foreign translation reserve relates to the foreign exchange movement on translation of entities which have a different functional currency to the presentational currency.
Profit and loss account

Profit and loss account includes all current and prior period retained profits and losses.

Non-controlling interests

Non-controlling interests includes the share of net assets attributed to management whom hold a 6% shareholding in Skytrac Systems Limited.
Page 37

 
ACR UK Holdings LTD
 
 
Notes to the financial statements
For the year ended 31 December 2023

23.


Prior year restatement

During the year ended 31 December 2023, the Company identified an error in its Consolidated Group and Company's financial statements. An amount due to group undertakings amounting to £4,241,065, which was no longer payable, had been incorrectly recorded in prior periods. Due to the impracticality of identifying the specific prior period in which the error originated, the comparative information for the financial year ended 31 December 2022, being the earliest prior period presented, has been restated to correct this error by crediting back the balance. The effect of the restatement is as presented in the below:
 

Group
2022
£
Company
2022
£


Effect of restatement on amounts owed to group undertakings

Amounts owed to group undertakings (as previously stated)
50,251,487
24,756,215

Restatement
(4,241,065)
(4,241,065)

Amounts owed to group undertakings (as restated)
46,010,422
20,515,150


Group
2022
£
Company
2022
£


Effect of restatement on opening profit and loss account

Profit and loss account as at 1 January 2022 (as previously stated)
6,605,176
32,463,550

Restatement
4,241,065
4,241,065

Profit and loss account as at 1 January 2022 (as restated)
10,846,241
36,704,615


24.


Pension commitments

The Group operates a defined contribution pension scheme for employees. The assets of the scheme are held separately from those of the Group. The annual contribution payable are charged to the profit and loss accounts and amounts payable in the year were £698,836 (2022: £626,787). There were contributions outstanding of £1,535 (2022: £Nil) at the year end.

Page 38

 
ACR UK Holdings LTD
 
 
Notes to the financial statements
For the year ended 31 December 2023

25.


Commitments under operating leases

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


Group
Group
2023
2022
£
£

Not later than 1 year
622,900
569,784

Later than 1 year and not later than 5 years
1,551,098
1,571,516

Later than 5 years
173,243
420,776

2,347,241
2,562,076

26.


Related party transactions

The Group is exempt under FRS 102 paragraph 33.1A from disclosing any transactions or balances between wholly owned group entities that have been eliminated on consolidation.

Remuneration for key management personnel and directors paid by the Group during the year amounted to £1,284,676 (2022: £1,171,277).


27.


Post balance sheet events

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


28.


Controlling party

The Group and Company's immediate parent company is ACR Group Borrower LLC, a company incorporated in the USA.

The Group and Company's ultimate parent is ACR Group Parent Inc., a company incorporated in the USA. Copies of the Group financial statements of ACR Group Parent Inc. are available at the corporate headquarters, the address of which is set out on the Company website (www.acratex.com).

ACR Group Parent Inc. is the smallest and largest group to consolidate ACR UK Holdings Ltd.

Page 39