Company registration number 02589651 (England and Wales)
H.V.R. INTERNATIONAL LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MAY 2024
H.V.R. INTERNATIONAL LIMITED
COMPANY INFORMATION
Directors
S. M. Elliott
K. S. McLaughlin
Company number
02589651
Registered office
Unit 15-19
Bedesway
Bede Industrial Estate
Jarrow
Tyne & Wear
NE32 3EN
Auditor
Azets Audit Services
Bulman House
Regent Centre
Gosforth
Newcastle upon Tyne
NE3 3LS
H.V.R. INTERNATIONAL LIMITED
CONTENTS
Page
Strategic report
1 - 2
Directors' report
3
Directors' responsibilities statement
4
Independent auditor's report
5 - 7
Income statement
8
Statement of comprehensive income
9
Statement of financial position
10
Statement of changes in equity
11
Notes to the financial statements
12 - 26
H.V.R. INTERNATIONAL LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 31 MAY 2024
- 1 -
The directors present the strategic report for the year ended 31 May 2024.
Principal activities
The principal activity of the company continued to be the manufacture and distribution of ceramic resistors.
Review of the business
This financial year was a challenging one, with promising, positive revenue growth in the first six months of the period offset by a difficult second half. During the year, orders increased significantly, however staff shortages and the inability to recruit and retain staff resulted in the company being unable to scale up at the rapid rate required. This can be clearly demonstrated by the results for the year, although there was a sharp increase in turnover of 27% to £12.2m (2023: £9.6m), the company underperformed due to wage increases, excessive energy costs, high inflation and the continuing global uncertainty.
Position at the year end
Even though, by the end of the year, the company was facing many challenges. the directors remain extremely positive and optimistic about the future of the business. Going forward, the company’s main strategy will focus on increasing productivity. Work to operationalise this strategy has already begun by strengthening the capability of the management team and reviewing all costs, prices and inefficiencies. Further work will focus on delivering process and technology improvements.
It is expected the majority of 2024/25 will remain challenging and the benefits of the above actions to only start coming through in the last quarter of the year. Nevertheless, the company remains clear about its priorities, committed to achieving its ambitious growth plans and seizing the opportunities that lie ahead.
The company's key financial and other performance indicators during the year were as follows:
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Principal risks and uncertainties
The company’s activities expose it to a variety of financial risks, including the effects of credit, liquidity, cash flow, interest rate risks and foreign exchange risks. In order to mitigate these risks in the most cost-effective manner, the company’s risk management is addressed through a framework of policies, procedures and internal controls. All policies are reviewed on an ongoing basis by management.
Financial assets that expose the group to financial risk consist primarily of trade debtors and cash. Financial liabilities that expose the group to financial risk consist principally of trade creditors and loans.
Credit risk is the risk of loss in value of financial assets due to counterparties failing to meet all or part of their obligations. The company performs ongoing credit evaluations of its customer’s financial condition.
Liquidity risk is the risk that the company does not have sufficient liquid assets to meet its obligations as they fall due. Liquidity is maintained at a prudent level and the group ensures there is an adequate liquidity buffer to cover contingencies. The company maintains sufficient cash and open credit lines from its bankers to meet funding requirements.
Interest rate risk regarding unfavourable movements in interest rates is not perceived as being material to the accounts due to the borrowing agreements in place.
Uncertain global events and disruptions are leading to greater volatility in the business environment. The company will continue to monitor drivers for macroeconomic changes and implement appropriate procedures and processes to manage their impact on the company’s performance in areas such as energy costs, raw material prices, taxation and tariffs. This will enable the company to ensure the risk is managed appropriately.
H.V.R. INTERNATIONAL LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2024
- 2 -
K. S. McLaughlin
Director
20 February 2025
H.V.R. INTERNATIONAL LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 MAY 2024
- 3 -
The directors present their annual report and financial statements for the year ended 31 May 2024.
Results and dividends
The results for the year are set out on page 8.
No ordinary dividends were paid. The directors do not recommend payment of a final dividend.
Directors
The directors who held office during the year and up to the date of signature of the financial statements were as follows:
S. M. Elliott
K. S. McLaughlin
Financial instruments
Objectives and policies
The company has an established, structured approach to risk management. The company's activities expose it to a variety of financial risks, including the effects of credit, liquidity, cash flow, interest rate risks and foreign exchange risks. The company has adopted risk management policies that seek to mitigate these risks in a cost effective manner. Financial assets that expose the group to financial risk consist primarily of trade debtors and cash. Financial liabilities that expose the group to financial risk consist principally of trade creditors and loans.
See disclosures within the Strategic Report regarding credit, liquidity, interest rate and foreign exchange risk.
Future developments
See disclosures within the Strategic Report regarding future developments of the company.
Auditor
In accordance with section 485 of the Companies Act 2006, a resolution for the re-appointment of Azets Audit Services as auditor of the company is to be proposed at the forthcoming Annual General Meeting.
Statement of disclosure to auditor
So far as each person who was a director at the date of approving this report is aware, there is no relevant audit information of which the company’s auditor is unaware. Additionally, the directors individually have taken all the necessary steps that they ought to have taken as directors in order to make themselves aware of all relevant audit information and to establish that the company’s auditor is aware of that information.
On behalf of the board
K. S. McLaughlin
Director
20 February 2025
H.V.R. INTERNATIONAL LIMITED
DIRECTORS' RESPONSIBILITIES STATEMENT
FOR THE YEAR ENDED 31 MAY 2024
- 4 -
The directors are responsible for preparing the annual 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 United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). 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 and then apply them consistently;
make judgements 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 enable them to ensure that the financial statements comply with the Companies Act 2006. They 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.
H.V.R. INTERNATIONAL LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF H.V.R. INTERNATIONAL LIMITED
- 5 -
Opinion
We have audited the financial statements of H.V.R. International Limited (the 'company') for the year ended 31 May 2024 which comprise the income statement, the statement of comprehensive income, the statement of financial position, the statement of changes in equity and notes to the financial statements, including significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice).
In our opinion the financial statements:
give a true and fair view of the state of the company's affairs as at 31 May 2024 and of its loss 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.
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditor's responsibilities for the audit of the financial statements section of our report. We are independent of the company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC’s Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Conclusions relating to going concern
In auditing the financial statements, we have concluded that the directors' use of the going concern basis of accounting in the preparation of the financial statements is appropriate.
Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the 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.
The other information comprises the information included in the annual report other than the financial statements and our auditor's report thereon. The directors are responsible for the other information contained within the annual report. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the course of the audit, or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.
We have nothing to report in this regard.
Opinions on other matters prescribed by the Companies Act 2006
In our opinion, based on the work undertaken in the course of our audit:
the information given in the strategic report and the directors' report for the financial year for which the financial statements are prepared is consistent with the financial statements; and
the strategic report and the directors' report have been prepared in accordance with applicable legal requirements.
H.V.R. INTERNATIONAL LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF H.V.R. INTERNATIONAL LIMITED
- 6 -
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 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, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. In preparing the financial statements, the directors are responsible for assessing the company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the company or to cease operations, or have no realistic alternative but to do so.
Auditor's responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.
A further description of our responsibilities is available on the Financial Reporting Council’s website at: https://www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor's report.
H.V.R. INTERNATIONAL LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF H.V.R. INTERNATIONAL LIMITED
- 7 -
Extent to which 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 and on the Financial Reporting Council’s website, to detect material misstatements in respect of irregularities, including fraud.
We obtain and update our understanding of the entity, its activities, its control environment, and likely future developments, including in relation to the legal and regulatory framework applicable and how the entity is complying with that framework. Based on this understanding, we identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. This includes consideration of the risk of acts by the entity that were contrary to applicable laws and regulations, including fraud.
We identified the following applicable laws and regulations as those most likely to have a material impact on the financial statements: Health and Safety; employment law (including the Working Time Directive); anti-bribery and corruption; and compliance with the UK Companies Act.
In response to the risk of irregularities and non-compliance with laws and regulations, including fraud, we designed procedures which included:
Enquiry of management and those charged with governance around actual and potential litigation and claims as well as actual, suspected and alleged fraud;
Assessing the extent of compliance with the laws and regulations considered to have a direct material effect on the financial statements or the operations of the company through enquiry and inspection;
Reviewing financial statement disclosures and testing to supporting documentation to assess compliance with applicable laws and regulations;
Performing audit work over the risk of management bias and override of controls, including testing of journal entries and other adjustments for appropriateness, evaluating the business rationale of significant transactions outside the normal course of business and reviewing accounting estimates for indicators of potential bias.
Because of the inherent limitations of an audit, there is a risk that we will not detect all irregularities, including those leading to a material misstatement in the financial statements or non-compliance with regulation. This risk increases the more that compliance with a law or regulation is removed from the events and transactions reflected in the financial statements, as we will be less likely to become aware of instances of non-compliance. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
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.
Brian Laidlaw BA CA
Senior Statutory Auditor
For and on behalf of Azets Audit Services
21 February 2025
Chartered Accountants
Statutory Auditor
Bulman House
Regent Centre
Gosforth
Newcastle upon Tyne
NE3 3LS
H.V.R. INTERNATIONAL LIMITED
INCOME STATEMENT
FOR THE YEAR ENDED 31 MAY 2024
- 8 -
2024
2023
Notes
£
£
Turnover
3
12,167,661
9,582,548
Cost of sales
(10,620,185)
(7,436,816)
Gross profit
1,547,476
2,145,732
Distribution costs
(584,108)
(515,140)
Administrative expenses
(1,449,629)
(1,213,718)
Other operating income
58,342
39,732
Operating (loss)/profit
4
(427,919)
456,606
Interest receivable and similar income
8
1,240
1,919
Interest payable and similar expenses
9
(39,376)
(15,108)
(Loss)/profit before taxation
(466,055)
443,417
Tax on (loss)/profit
10
122,217
(101,852)
(Loss)/profit for the financial year
(343,838)
341,565
The income statement has been prepared on the basis that all operations are continuing operations.
H.V.R. INTERNATIONAL LIMITED
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 MAY 2024
- 9 -
2024
2023
£
£
(Loss)/profit for the year
(343,838)
341,565
Other comprehensive income
-
-
Total comprehensive income for the year
(343,838)
341,565
H.V.R. INTERNATIONAL LIMITED
STATEMENT OF FINANCIAL POSITION
- 10 -
2024
2023
Notes
£
£
£
£
Fixed assets
Tangible assets
12
807,320
760,734
Investments
13
6,000
6,000
813,320
766,734
Current assets
Stocks
15
1,648,206
2,107,157
Debtors
16
12,636,519
12,477,331
Cash at bank and in hand
112,547
80,898
14,397,272
14,665,386
Creditors: amounts falling due within one year
17
(2,080,721)
(2,007,629)
Net current assets
12,316,551
12,657,757
Total assets less current liabilities
13,129,871
13,424,491
Creditors: amounts falling due after more than one year
18
(178,497)
(153,337)
Provisions for liabilities
Deferred tax liability
20
115,676
91,618
(115,676)
(91,618)
Net assets
12,835,698
13,179,536
Capital and reserves
Called up share capital
23
32,000
32,000
Capital redemption reserve
24
398,573
398,573
Profit and loss reserves
24
12,405,125
12,748,963
Total equity
12,835,698
13,179,536
The financial statements were approved by the board of directors and authorised for issue on 20 February 2025 and are signed on its behalf by:
K. S. McLaughlin
Director
Company Registration No. 02589651
H.V.R. INTERNATIONAL LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 MAY 2024
- 11 -
Share capital
Capital redemption reserve
Profit and loss reserves
Total
£
£
£
£
Balance at 1 June 2022
32,000
398,573
12,407,398
12,837,971
Year ended 31 May 2023:
Profit and total comprehensive income for the year
-
-
341,565
341,565
Balance at 31 May 2023
32,000
398,573
12,748,963
13,179,536
Year ended 31 May 2024:
Loss and total comprehensive income for the year
-
-
(343,838)
(343,838)
Balance at 31 May 2024
32,000
398,573
12,405,125
12,835,698
H.V.R. INTERNATIONAL LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MAY 2024
- 12 -
1
Accounting policies
Company information
H.V.R. International Limited is a private company limited by shares incorporated in England and Wales. The registered office is Unit 15-19, Bedesway, Bede Industrial Estate, Jarrow, Tyne & Wear, NE32 3EN.
1.1
Accounting convention
These financial statements have been prepared in accordance with FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” (“FRS 102”) and the requirements of the Companies Act 2006.
The financial statements are prepared in sterling, which is the functional currency of the company. Monetary amounts in these financial statements are rounded to the nearest £.
The financial statements have been prepared under the historical cost convention. The principal accounting policies adopted are set out below.
The company has taken advantage of the exemption available under paragraph 33.1A of FRS 102 and does not disclose related party transactions with members of the same group that are wholly owned.
This company is a qualifying entity for the purposes of FRS 102, being a member of a group where the parent of that group prepares publicly available consolidated financial statements, including this company, which are intended to give a true and fair view of the assets, liabilities, financial position and profit or loss of the group. The company has therefore taken advantage of exemptions from the following disclosure requirements:
Section 7 ‘Statement of Cash Flows’: Presentation of a statement of cash flow and related notes and disclosures;
Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instrument Issues: Interest income/expense and net gains/losses for financial instruments not measured at fair value; basis of determining fair values; details of collateral, loan defaults or breaches, details of hedges, hedging fair value changes recognised in profit or loss and in other comprehensive income;
Section 26 ‘Share based Payment’: Share-based payment expense charged to profit or loss, reconciliation of opening and closing number and weighted average exercise price of share options, how the fair value of options granted was measured, measurement and carrying amount of liabilities for cash-settled share-based payments, explanation of modifications to arrangements;
Section 33 ‘Related Party Disclosures’: Compensation for key management personnel.
The financial statements of the company are consolidated in the financial statements of Hawkridge Holdings Limited. These consolidated financial statements are available from its registered office, Bedesway, Bede Industrial Estate, Jarrow, Tyne and Wear, NE32 3EN.
The company has taken advantage of the exemption under section 400 of the Companies Act 2006 not to prepare consolidated accounts. The financial statements present information about the company as an individual entity and not about its group.
H.V.R. INTERNATIONAL LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2024
1
Accounting policies
(Continued)
- 13 -
1.2
Going concern
The financial statements have been prepared on a going concern basis.true
The company meets its day to day working capital requirements through cash generated from operations and group banking facilities.
The company’s forecasts and projections for the next twelve months show that the company should be able to continue in operational existence for that period, taking into account reasonable possible changes in trading performance. This also considers the effectiveness of available measures to assist in mitigating the impact.
The forecasts support the ability of the company to remain a going concern and to be able to trade and meets its debts as they fall due.
The directors believe that there is no material uncertainty in relation to going concern and that the company has adequate financial resources to continue in operational existence for at least twelve months from the date of signing the financial statements. Therefore the directors consider it appropriate to prepare the financial statements on a going concern basis.
1.3
Turnover
Turnover is recognised at the fair value of the consideration received or receivable for goods and services provided in the normal course of business, and is shown net of VAT and other sales related taxes. The fair value of consideration takes into account trade discounts, settlement discounts and volume rebates.
When cash inflows are deferred and represent a financing arrangement, the fair value of the consideration is the present value of the future receipts. The difference between the fair value of the consideration and the nominal amount received is recognised as interest income.
Revenue from the sale of goods is recognised when the significant risks and rewards of ownership of the goods have passed to the buyer (usually on dispatch of the goods), the amount of revenue can be measured reliably, it is probable that the economic benefits associated with the transaction will flow to the entity and the costs incurred or to be incurred in respect of the transaction can be measured reliably.
1.4
Research and development expenditure
Research expenditure is written off against profits in the year in which it is incurred. Identifiable development expenditure is capitalised to the extent that the technical, commercial and financial feasibility can be demonstrated.
1.5
Intangible fixed assets - goodwill
Goodwill represents the excess of the cost of acquisition of unincorporated businesses over the fair value of net assets acquired. It is initially recognised as an asset at cost and is subsequently measured at cost less accumulated amortisation and accumulated impairment losses. Goodwill is considered to have a finite useful life and is amortised on a systematic basis over its expected life, which is 10 years.
For the purposes of impairment testing, goodwill is allocated to the cash-generating units expected to benefit from the acquisition. Cash-generating units to which goodwill has been allocated are tested for impairment at least annually, or more frequently when there is an indication that the unit may be impaired. If the recoverable amount of the cash-generating unit is less than the carrying amount of the unit, the impairment loss is allocated first to reduce the carrying amount of any goodwill allocated to the unit and then to the other assets of the unit pro-rata on the basis of the carrying amount of each asset in the unit.
1.6
Tangible fixed assets
Tangible fixed assets are initially measured at cost and subsequently measured at cost or valuation, net of depreciation and any impairment losses.
H.V.R. INTERNATIONAL LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2024
1
Accounting policies
(Continued)
- 14 -
Depreciation is recognised so as to write off the cost or valuation of assets less their residual values over their useful lives on the following bases:
Leasehold property
6.7% straight line
Property improvements
10% straight line
Plant and equipment
10% straight line
Fixtures and fittings
33.3% straight line
Motor vehicles
25% straight line
The gain or loss arising on the disposal of an asset is determined as the difference between the sale proceeds and the carrying value of the asset, and is credited or charged to profit or loss.
1.7
Fixed asset investments
Interests in subsidiaries, associates and jointly controlled entities are initially measured at cost and subsequently measured at cost less any accumulated impairment losses. The investments are assessed for impairment at each reporting date and any impairment losses or reversals of impairment losses are recognised immediately in profit or loss.
A subsidiary is an entity controlled by the company. Control is the power to govern the financial and operating policies of the entity so as to obtain benefits from its activities.
An associate is an entity, being neither a subsidiary nor a joint venture, in which the company holds a long-term interest and where the company has significant influence. The company considers that it has significant influence where it has the power to participate in the financial and operating decisions of the associate.
Entities in which the company has a long term interest and shares control under a contractual arrangement are classified as jointly controlled entities.
1.8
Impairment of fixed assets
At each reporting period end date, the company reviews the carrying amounts of its tangible and intangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where it is not possible to estimate the recoverable amount of an individual asset, the company estimates the recoverable amount of the cash-generating unit to which the asset belongs.
Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.
If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (or cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the impairment loss is treated as a revaluation decrease.
Recognised impairment losses are reversed if, and only if, the reasons for the impairment loss have ceased to apply. Where an impairment loss subsequently reverses, the carrying amount of the asset (or cash-generating unit) is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset (or cash-generating unit) in prior years. A reversal of an impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the reversal of the impairment loss is treated as a revaluation increase.
H.V.R. INTERNATIONAL LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2024
1
Accounting policies
(Continued)
- 15 -
1.9
Stocks
Stocks are stated at the lower of cost and estimated selling price less costs to complete and sell. Cost comprises direct materials and, where applicable, direct labour costs and those overheads that have been incurred in bringing the stocks to their present location and condition.
Stocks held for distribution at no or nominal consideration are measured at the lower of cost and replacement cost, adjusted where applicable for any loss of service potential.
At each reporting date, an assessment is made for impairment. Any excess of the carrying amount of stocks over its estimated selling price less costs to complete and sell is recognised as an impairment loss in profit or loss. Reversals of impairment losses are also recognised in profit or loss.
1.10
Cash and cash equivalents
Cash and cash equivalents are basic financial assets and include cash in hand, deposits held at call with banks, other short-term liquid investments with original maturities of three months or less, and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities.
1.11
Financial instruments
The company has elected to apply the provisions of Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instruments Issues’ of FRS 102 to all of its financial instruments.
Financial instruments are recognised in the company's statement of financial position when the company becomes party to the contractual provisions of the instrument.
Financial assets and liabilities are offset, with the net amounts presented in the financial statements, when there is a legally enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously.
Basic financial assets
Basic financial assets, which include debtors and cash and bank balances, are initially measured at transaction price including transaction costs and are subsequently carried at amortised cost using the effective interest method unless the arrangement constitutes a financing transaction, where the transaction is measured at the present value of the future receipts discounted at a market rate of interest. Financial assets classified as receivable within one year are not amortised.
Other financial assets
Other financial assets, including investments in equity instruments which are not subsidiaries, associates or joint ventures, are initially measured at fair value, which is normally the transaction price. Such assets are subsequently carried at fair value and the changes in fair value are recognised in profit or loss, except that investments in equity instruments that are not publicly traded and whose fair values cannot be measured reliably are measured at cost less impairment.
H.V.R. INTERNATIONAL LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2024
1
Accounting policies
(Continued)
- 16 -
Impairment of financial assets
Financial assets, other than those held at fair value through profit and loss, are assessed for indicators of impairment at each reporting end date.
Financial assets are impaired where there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial asset, the estimated future cash flows have been affected. If an asset is impaired, the impairment loss is the difference between the carrying amount and the present value of the estimated cash flows discounted at the asset’s original effective interest rate. The impairment loss is recognised in profit or loss.
If there is a decrease in the impairment loss arising from an event occurring after the impairment was recognised, the impairment is reversed. The reversal is such that the current carrying amount does not exceed what the carrying amount would have been, had the impairment not previously been recognised. The impairment reversal is recognised in profit or loss.
Derecognition of financial assets
Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire or are settled, or when the company transfers the financial asset and substantially all the risks and rewards of ownership to another entity, or if some significant risks and rewards of ownership are retained but control of the asset has transferred to another party that is able to sell the asset in its entirety to an unrelated third party.
Classification of financial liabilities
Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the company after deducting all of its liabilities.
Basic financial liabilities
Basic financial liabilities, including creditors, bank loans, loans from fellow group companies and preference shares that are classified as debt, are initially recognised at transaction price unless the arrangement constitutes a financing transaction, where the debt instrument is measured at the present value of the future payments discounted at a market rate of interest. Financial liabilities classified as payable within one year are not amortised.
Debt instruments are subsequently carried at amortised cost, using the effective interest rate method.
Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Amounts payable are classified as current liabilities if payment is due within one year or less. If not, they are presented as non-current liabilities. Trade creditors are recognised initially at transaction price and subsequently measured at amortised cost using the effective interest method.
Other financial liabilities
Derivatives, including interest rate swaps and forward foreign exchange contracts, are not basic financial instruments. Derivatives are initially recognised at fair value on the date a derivative contract is entered into and are subsequently re-measured at their fair value. Changes in the fair value of derivatives are recognised in profit or loss in finance costs or finance income as appropriate, unless hedge accounting is applied and the hedge is a cash flow hedge.
Debt instruments that do not meet the conditions in FRS 102 paragraph 11.9 are subsequently measured at fair value through profit or loss. Debt instruments may be designated as being measured at fair value through profit or loss to eliminate or reduce an accounting mismatch or if the instruments are measured and their performance evaluated on a fair value basis in accordance with a documented risk management or investment strategy.
H.V.R. INTERNATIONAL LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2024
1
Accounting policies
(Continued)
- 17 -
Derecognition of financial liabilities
Financial liabilities are derecognised when the company’s contractual obligations expire or are discharged or cancelled.
1.12
Equity instruments
Equity instruments issued by the company are recorded at the proceeds received, net of transaction costs. Dividends payable on equity instruments are recognised as liabilities once they are no longer at the discretion of the company.
1.13
Taxation
The tax expense represents the sum of the tax currently payable and deferred tax.
Current tax
The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the income statement because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The company’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.
Deferred tax
Deferred tax liabilities are generally recognised for all timing differences and deferred tax assets are recognised to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits. Such assets and liabilities are not recognised if the timing difference arises from goodwill or from the initial recognition of other assets and liabilities in a transaction that affects neither the tax profit nor the accounting profit.
The carrying amount of deferred tax assets is reviewed at each reporting end date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realised. Deferred tax is charged or credited in the income statement, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity. Deferred tax assets and liabilities are offset when the company has a legally enforceable right to offset current tax assets and liabilities and the deferred tax assets and liabilities relate to taxes levied by the same tax authority.
1.14
Employee benefits
The costs of short-term employee benefits are recognised as a liability and an expense, unless those costs are required to be recognised as part of the cost of stock or fixed assets.
The cost of any unused holiday entitlement is recognised in the period in which the employee’s services are received.
Termination benefits are recognised immediately as an expense when the company is demonstrably committed to terminate the employment of an employee or to provide termination benefits.
1.15
Retirement benefits
Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.
H.V.R. INTERNATIONAL LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2024
1
Accounting policies
(Continued)
- 18 -
1.16
Leases
Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessees. All other leases are classified as operating leases.
Assets held under finance leases are recognised as assets at the lower of the assets fair value at the date of inception and the present value of the minimum lease payments. The related liability is included in the statement of financial position as a finance lease obligation. Lease payments are treated as consisting of capital and interest elements. The interest is charged to profit or loss so as to produce a constant periodic rate of interest on the remaining balance of the liability.
Rental income from operating leases is recognised on a straight line basis over the term of the relevant lease. Initial direct costs incurred in negotiating and arranging an operating lease are added to the carrying amount of the leased asset and recognised on a straight line basis over the lease term.
1.17
Government grants
Government grants are recognised at the fair value of the asset received or receivable when there is reasonable assurance that the grant conditions will be met and the grants will be received.
A grant that specifies performance conditions is recognised in income when the performance conditions are met. Where a grant does not specify performance conditions it is recognised in income when the proceeds are received or receivable. A grant received before the recognition criteria are satisfied is recognised as a liability.
2
Judgements and key sources of estimation uncertainty
In the application of the company’s accounting policies, the directors are required to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised where the revision affects only that period, or in the period of the revision and future periods where the revision affects both current and future periods.
The directors do not consider there to be any judgements, in the application of these accounting policies that have significant effect on the financial statements and estimates with a significant risk of material adjustment in the next year.
3
Turnover and other revenue
2024
2023
£
£
Turnover analysed by class of business
Sale of goods
12,167,661
9,582,548
H.V.R. INTERNATIONAL LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2024
3
Turnover and other revenue
(Continued)
- 19 -
2024
2023
£
£
Turnover analysed by geographical market
UK
324,712
373,844
Rest of world
11,842,949
9,208,704
12,167,661
9,582,548
2024
2023
£
£
Other revenue
Interest income
1,240
1,919
Grants received
38,183
30,000
4
Operating (loss)/profit
2024
2023
Operating (loss)/profit for the year is stated after charging/(crediting):
£
£
Exchange losses/(gains)
52,699
(77,331)
Research and development costs
1,260
4,340
Government grants
(38,183)
(30,000)
Depreciation of owned tangible fixed assets
262,040
275,955
5
Auditor's remuneration
2024
2023
Fees payable to the company's auditor and associates:
£
£
For audit services
Audit of the financial statements of the company
20,000
20,500
For other services
Audit-related assurance services
1,500
6
Employees
The average monthly number of persons (including directors) employed by the company during the year was:
2024
2023
Number
Number
Production
131
111
Administration
22
22
Total
153
133
H.V.R. INTERNATIONAL LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2024
6
Employees
(Continued)
- 20 -
Their aggregate remuneration comprised:
2024
2023
£
£
Wages and salaries
5,028,787
4,261,516
Social security costs
411,800
360,374
Pension costs
306,596
255,442
5,747,183
4,877,332
7
Directors' remuneration
No remuneration was paid to the directors in the current or prior year. Their remuneration forms part of the management fee.
8
Interest receivable and similar income
2024
2023
£
£
Interest income
Interest on bank deposits
1,240
1,919
9
Interest payable and similar expenses
2024
2023
£
£
Interest on finance leases and hire purchase contracts
39,376
15,108
10
Taxation
2024
2023
£
£
Current tax
UK corporation tax on profits for the current period
78,913
Adjustments in respect of prior periods
(108,289)
6,840
Group tax relief
(37,986)
Total current tax
(146,275)
85,753
Deferred tax
Origination and reversal of timing differences
24,058
12,881
Changes in tax rates
3,218
Total deferred tax
24,058
16,099
Total tax (credit)/charge
(122,217)
101,852
H.V.R. INTERNATIONAL LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2024
10
Taxation
(Continued)
- 21 -
The actual (credit)/charge for the year can be reconciled to the expected (credit)/charge for the year based on the profit or loss and the standard rate of tax as follows:
2024
2023
£
£
(Loss)/profit before taxation
(466,055)
443,417
Expected tax (credit)/charge based on the standard rate of corporation tax in the UK of 25.00% (2023: 20.00%)
(116,514)
88,683
Tax effect of expenses that are not deductible in determining taxable profit
100
953
Tax effect of income not taxable in determining taxable profit
(150)
(6,001)
Change in unrecognised deferred tax assets
1
3,218
Adjustments in respect of prior years
(108,289)
6,840
Group relief
37,986
(5,599)
Permanent capital allowances in excess of depreciation
21,354
Effect of super-deduction
4,010
(7,596)
Losses carried back
98,625
Group relief receipt
(37,986)
Taxation (credit)/charge for the year
(122,217)
101,852
11
Intangible fixed assets
Goodwill
£
Cost
At 1 June 2023 and 31 May 2024
569,686
Amortisation and impairment
At 1 June 2023 and 31 May 2024
569,686
Carrying amount
At 31 May 2024
At 31 May 2023
H.V.R. INTERNATIONAL LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2024
- 22 -
12
Tangible fixed assets
Leasehold property
Property improvements
Plant and equipment
Fixtures and fittings
Motor vehicles
Total
£
£
£
£
£
£
Cost
At 1 June 2023
1,029,757
810,901
3,893,194
268,152
168,321
6,170,325
Additions
99,183
38,191
171,252
308,626
Disposals
(41,638)
(41,638)
At 31 May 2024
1,029,757
810,901
3,992,377
306,343
297,935
6,437,313
Depreciation and impairment
At 1 June 2023
1,029,757
681,462
3,335,559
205,363
157,450
5,409,591
Depreciation charged in the year
40,862
152,463
31,738
36,977
262,040
Eliminated in respect of disposals
(41,638)
(41,638)
At 31 May 2024
1,029,757
722,324
3,488,022
237,101
152,789
5,629,993
Carrying amount
At 31 May 2024
88,577
504,355
69,242
145,146
807,320
At 31 May 2023
129,439
557,635
62,789
10,871
760,734
The net carrying value of tangible fixed assets includes the following in respect of assets held under finance leases or hire purchase contracts.
2024
2023
£
£
Plant and equipment
117,373
130,916
Motor vehicles
145,146
262,519
130,916
13
Fixed asset investments
2024
2023
Notes
£
£
Investments in subsidiaries
14
6,000
6,000
14
Subsidiaries
Details of the investments in which the company holds 20% or more of the nominal value of any class of share capital are as follows:
H.V.R. INTERNATIONAL LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2024
14
Subsidiaries
(Continued)
- 23 -
Name of undertaking
Registered office
Class of
% Held
shares held
Direct
HVR Advanced Power Components Inc
2090 Old Union Rd, Cheektowaga, NY 14227 United States of America
Ordinary
86.96
The principal activity of HVR Advanced Power Components Inc is the manufacture and distribution of high voltage resistors.
15
Stocks
2024
2023
£
£
Raw materials and consumables
1,008,606
1,245,381
Work in progress
639,600
861,776
1,648,206
2,107,157
16
Debtors
2024
2023
Amounts falling due within one year:
£
£
Trade debtors
1,796,359
2,381,663
Corporation tax recoverable
116,634
Amounts owed by group undertakings
9,989,639
9,540,870
Other debtors
413,722
407,037
Prepayments and accrued income
320,165
147,761
12,636,519
12,477,331
17
Creditors: amounts falling due within one year
2024
2023
Notes
£
£
Obligations under finance leases
19
95,007
65,056
Trade creditors
873,031
931,351
Corporation tax
94,006
Other taxation and social security
99,042
90,411
Government grants
21
30,000
30,000
Other creditors
535,453
354,500
Accruals and deferred income
448,188
442,305
2,080,721
2,007,629
H.V.R. INTERNATIONAL LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2024
- 24 -
18
Creditors: amounts falling due after more than one year
2024
2023
Notes
£
£
Obligations under finance leases
19
133,059
77,899
Government grants
21
45,438
75,438
178,497
153,337
19
Finance lease obligations
2024
2023
Future minimum lease payments due under finance leases:
£
£
Within one year
95,007
65,056
In two to five years
133,059
77,899
228,066
142,955
The obligations under finance leases and hire purchase contracts are secured on the assets to which they relate.
20
Deferred taxation
The following are the major deferred tax liabilities and assets recognised by the company and movements thereon:
Liabilities
Liabilities
2024
2023
Balances:
£
£
Accelerated capital allowances
138,733
104,511
Tax losses
(13,751)
-
Retirement benefit obligations
(9,306)
(12,893)
115,676
91,618
2024
Movements in the year:
£
Liability at 1 June 2023
91,618
Charge to profit or loss
24,058
Liability at 31 May 2024
115,676
H.V.R. INTERNATIONAL LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2024
- 25 -
21
Government grants
2024
2023
£
£
Arising from government grants
75,438
105,438
Included in the financial statements as follows:
Current liabilities
30,000
30,000
Non-current liabilities
45,438
75,438
75,438
105,438
22
Retirement benefit schemes
2024
2023
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
306,596
255,442
The company operates a defined contribution pension scheme for all qualifying employees. The assets of the scheme are held separately from those of the company in an independently administered fund.
Contributions totalling £55,020 (2023 - £78,330) were payable to the scheme at the end of the year and are included in creditors.
23
Share capital
2024
2023
2024
2023
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary shares of £1 each
32,000
32,000
32,000
32,000
Called up share capital
This represents the nominal value of shares that have been issued.
24
Reserves
Equity reserve
This reserve records retained earnings and accumulated losses.
Capital redemption reserve
This reserve records the nominal value of shares repurchased by the company.
H.V.R. INTERNATIONAL LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2024
- 26 -
25
Directors' transactions
26
Ultimate controlling party
The company's immediate parent is HVR Limited, incorporated in England and Wales.
The ultimate parent is Hawkridge Holdings Limited, incorporated in England and Wales.
The most senior parent entity producing publicly available financial statements is Hawkridge Holdings Limited. These financial statements are available upon request from Hawkridge Holdings Limited, Bedesway, Bede Industrial Estate, Jarrow, Tyne and Wear, NE32 3EN, which is also the registered address of the ultimate parent company.
The ultimate controlling party is S. M. Elliott.
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