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REGISTERED NUMBER: 03135655 (England and Wales)












Strategic Report,

Report of the Directors and

Audited Financial Statements

for the Year Ended 31 August 2024

for


HATS GROUP LTD


HATS GROUP LTD (REGISTERED NUMBER: 03135655)







Contents of the Financial Statements

FOR THE YEAR ENDED 31 AUGUST 2024





Page



Company Information  

1



Strategic Report  

2



Report of the Directors  

5



Directors' Responsibilities Statement  

8



Report of the Independent Auditors  

9



Income Statement  

13



Other Comprehensive Income  

14



Balance Sheet  

15



Statement of Changes in Equity  

16



Cash Flow Statement  

17



Notes to the Cash Flow Statement  

18



Notes to the Financial Statements

20




HATS GROUP LTD


Company Information

FOR THE YEAR ENDED 31 AUGUST 2024









DIRECTORS:

HS Bilinski


A Howard


Miss S C Rezende De Sousa





REGISTERED OFFICE:

c/o LSR Management Ltd


Unit C2A Comet Studios


De Havilland Court


Amersham


Buckinghamshire


HP7 0PX





REGISTERED NUMBER:

03135655 (England and Wales)





SENIOR STATUTORY

AUDITOR:

Mr Damian Wayne Riley





AUDITORS:

Alextra Audit Limited


Unit 7-9 Macon Court


Herald Drive


Crewe


CW1 6EA


HATS GROUP LTD (REGISTERED NUMBER: 03135655)


Strategic Report

FOR THE YEAR ENDED 31 AUGUST 2024


The directors present their strategic report for the year ended 31 August 2024.


REVIEW OF BUSINESS

The results for the year and financial position of the company are shown in the annexed financial statements. The principal activity of the company is the supply of logistical solutions to Local Government & the NHS and private sector.


PRINCIPAL RISKS AND UNCERTAINTIES

The company operates in an uncertain environment that may result in increased risk, cost pressure and time pressures.  Due to the nature of the industry additional pressures from customers can arise without time to plan for them.  The following are the key risks that face the company;


-Financing risks

The financial risk to the company going forward is dependent on the current market.  As the company deals in transportation logistics over short and medium length contracts this mitigates immediate financing risk, however not long term risks.  The company's finances are supported by its ability to gain a competitive advantage over its competitors.


-Market and other regulatory requirements

Existing and possible future legislation, regulations and actions could cause additional operational expense, capital expenditure, reduction in scope and further product development change, the extent of which cannot be predicted.  The company takes responsibility for ensuring that all relevant legislation is met.


-Operation risks

These include equipment failure, damage or substandard service, and include changes in customer operations and targets.  The risk of oil price changes affecting the cost of sales is an uncontrollable risk for the company.  The company seeks to minimise these risks by investing in environmentally advanced equipment, improvements in training and customer engagement whilst closely monitoring the legislation developments within its market.



HATS GROUP LTD (REGISTERED NUMBER: 03135655)


Strategic Report

FOR THE YEAR ENDED 31 AUGUST 2024


SECTION 172(1) STATEMENT

This section of the Strategic Report describes how the directors regard the matters set out in section 172 of the Companies Act 2006 ("Section 172").


Section 172 requires directors to act in a way they consider, in good faith, would be most likely to promote the success of the Company for the benefit of its stakeholders as a whole.  The directors receive guidance on their duties from the Company Secretary, including in relation to Section 172, and have been briefed on these reporting requirements.


The Company considers its key stakeholder groups to be:-

-  Employees,

-  Customers and suppliers, and

-  Community/Society/Environment.


STAKEHOLDER ENGAGEMENT STATEMENT


The following are considered to be the key stakeholders of the Company:


Stakeholder


Important areas for our key stakeholders and measures taken to demonstrate

their value the



business and engagement are set out below:


Employees


Please see the Employee Engagement Statement in the Directors Report.


Suppliers


Business relationships are recognised by the Directors as being essential to

the continued success and positive reputation of the Company.  The

Company's staff are in regular contact with the key commercial suppliers in

order to continue to promote strong and mutually beneficial relationships

with its commercial partners.



Community/Society/Environment

The directors firmly believe that excellent customer service, integrity, employee opportunity and community relationships go hand in hand with business growth.  The Company strives to honour the people and environment in which it operates by:

-  acting with honesty, integrity and fairness at all times;

-  providing employees with a safe and comfortable working environment;

-  offering customers a selection of fuel-efficient alternatives, including electric vehicles when available;

-  minimising the impact on the environment by reducing carbon footprint and waste;

-  working with suppliers to increase sustainable supply chain performance;

-  valuing diversity, and seeking to represent suppliers and employees that fully reflect the communities served;

-  contributing to local communities through charitable donations;

-  complying with all relevant laws and regulations;

-  listening to stakeholders, responding to their concerns and communication regularly with them.


Shareholders


The success of the business ensures that shareholders are rewarded and that

the value of the Company is enhanced.



EMPLOYEES

The company has continued to give full and fair consideration to applications made by persons of all diversities, having regard to their respective aptitudes and abilities, and to ensure that they benefit from training and career development programmes in common with all employees.  The company has continued its policy of employee involvement by making information available to employees through the medium of frequent staff meetings, together with personal appraisals and feedback sessions.



HATS GROUP LTD (REGISTERED NUMBER: 03135655)


Strategic Report

FOR THE YEAR ENDED 31 AUGUST 2024


PAYMENT OF CREDITORS

The company does not follow any published code or statement on payment practice.  However, it is the company's policy to settle all amounts due to its creditors on a timely basis, taking into account the credit terms by each supplier.


LIKELY FUTURE DEVELOPMENTS

HATS Group are expected to continue with strong growth throughout 2024/2025.


During the year HATS Group embarked on a highly successful efficiency drive, which resulted in Gross Profit increasing by 18% (see Key Performance Indicators below). At the same time, we invested in our overhead staff to allow for significant operational expansion for contracts starting from the first month of fiscal year 2024/2025. This will allow strong growth in both turnover and profits throughout 2024/2025.


KEY PERFORMANCE INDICATORS

At HATS Group we recognise that we can only continue to deliver excellent standards of service to our clients by having a successful, sustainable and dynamic company.


To enable this, we use two Key Performance Indicators: Revenue and Net Profit. Turnover has stabilised in 2023/24 increasing marginally from £79.25m to £79.44m Underlying sales growth was partially tempered by a route shedding initiative which removed unprofitable routes or contracts. This was combined with a programme to change out high-cost rental vehicles within the fleet. As a result of the combination of these two initiatives, profitability was enhanced delivering both absolute growth in Gross Profit and at an increased Gross Profit margin as a percentage of sales: Gross profit increased to £32.99m in 2023/24 from £27.87m 2022/23 and Gross profit margin increased to 41.2% in 2023/24 from 35.2% in 2022/23. This strong growth marks a 18% increase in gross profit compared from the previous year on a pro rata basis.


Net profit has increased by 9% in the year due to the increase in gross profit .  Additional overhead costs required to prepare to on board new large contracts, together with a material element of one-off costs included in overheads relating to a specific project resulted in a lower net growth than the gross profit increase would usually generate. Interest costs also increased, primarily associated with the purchase of vehicles under both the rental vehicle change-out programme and ongoing fleet replacement initiative. Net profit is expected to improve through fiscal year 2024/25.


We are exceptionally proud of our commercial performance, especially when combined with our excellent front-line services levels and regulatory compliance.


ON BEHALF OF THE BOARD:






HS Bilinski - Director



4 March 2025


HATS GROUP LTD (REGISTERED NUMBER: 03135655)


Report of the Directors

FOR THE YEAR ENDED 31 AUGUST 2024


The directors present their report with the financial statements of the company for the year ended 31 August 2024.  


INCORPORATION

The company was incorporated on 8 December 1995 .


DIVIDENDS

No dividends will be distributed for the year ended 31 August 2024.


DIRECTORS

The directors shown below have held office during the whole of the period from 1 September 2023 to the date of this report.


HS Bilinski

A Howard

Miss S C Rezende De Sousa


All the directors, being eligible, offer themselves for election at the forthcoming first Annual General Meeting.


POLITICAL DONATIONS AND EXPENDITURE

During the year the company made donations of £28,002 to local charities, none of these were political.


RESULTS REVIEW

The company's key performance numbers within the year were:


Year


2024


2023


Turnover


79,443,038


79,254,098


Gross Profit


32,988,294


27,865,127


Net Assets


14,909,657


12,716,510



The company aims to continue to grow its client base organically.  The target growth areas are within vulnerable adults & passengers with special educational needs and disabilities (SEND) & within patient transport area of NHS trusts.


The company has increased the structure in place and operational scope to grow in these target areas.


ROUNDING

The accounts are declared in whole £'s.


ENGAGEMENT WITH EMPLOYEES

The Company operates a framework for employee information and consultation which complies with the requirements of the Information and Consultation of Employees Regulations 2004. During the year, the policy of providing employees with information about the company has continued through the Company's website and interactive employee applications.  Regular meetings are held between local management and employees to allow free flow of information and ideas.  Employees participate directly in the success of the business through bonus mechanisms.


DISABLED EMPLOYEES

The Company gives full consideration to applications for employment from disabled persons where the requirements of the job can be adequately fulfilled by a handicapped or disabled person. Opportunities are available to disabled employees for training, career development and promotion. Where existing employees become disabled, it is the Company's policy to provide continuing employment wherever practicable in the same or and alternative position and to provide appropriate training to achieve this aim.


HATS GROUP LTD (REGISTERED NUMBER: 03135655)


Report of the Directors

FOR THE YEAR ENDED 31 AUGUST 2024



STREAMLINED ENERGY AND CARBON REPORTING

As part of our ongoing commitment to environmental stewardship, HATS Group Ltd recognises the importance of accounting for and mitigating carbon emissions resulting from our operations. In direct alignment with sustainability goals, we have undertaken detailed analysis of the carbon dioxide equivalents (MMTCDE) associated with our energy consumption for the fiscal year.


Carbon Emissions Calculation


Based on the data available and utilising established emission factors, we have calculated the carbon dioxide equivalents (MMTCDE) resulting from our diesel expenditure for the fiscal year. This calculation adheres to recognised standards and methodologies for greenhouse gas accounting.


Results


For the fiscal year 2024, the total carbon dioxide equivalents (MMTCDE) associated with our energy consumption amounted to approximately 17.22 million metric tonnes. This figure represents the carbon emissions resulting directly from our operational activities and demonstrates the impact of recent reductions achieved through improved efficiency measures.


We calculated the CO2 emissions per litre of fuel using recognised fuel combustion emissions for our fleet of vehicles (kg of CO2 per litre burned and density of fuel).


We then converted our fuel expenditure from pounds (£) to tonnes, assuming a conversion factor of 1 pound ˜ 0.000453592 tonnes.


Finally, we calculated the carbon dioxide equivalents (MMTCDE) by multiplying the total fuel consumption in tonnes by the CO2 emissions per liter of fuel and converting the result to million metric tonnes:

MMTCDE = (total diesel consumption in tonnes) × (CO2 emissions per litre of diesel) × (1 million / 1,000,000).


Commitment to Emissions Reduction


Looking ahead, we remain steadfast in our commitment to reducing carbon emissions and mitigating environmental impact. We are actively pursuing a clear pathway towards achieving Net Zero emissions by 2030, with a particular focus on:


Transitioning our fleet to electric vehicles.

Implementing energy-efficient practices across all operations.

Strengthening supplier relationships to promote sustainable practices.


These efforts reflect our dedication to sustainability and our role as responsible stewards of the environment.


Conclusion


In conclusion, we acknowledge the importance of transparent reporting and accountability in addressing climate change. We remain committed to reducing our carbon footprint, advancing sustainability initiatives, and working towards a future where environmental stewardship is paramount. By continuing to innovate and collaborate, we are confident in our ability to achieve our Net Zero emissions target by 2030 and contribute to a greener, more sustainable world.


DISCLOSURE IN THE STRATEGIC REPORT

Future risk and uncertainties are disclosed in the strategic report.


HATS GROUP LTD (REGISTERED NUMBER: 03135655)


Report of the Directors

FOR THE YEAR ENDED 31 AUGUST 2024



STATEMENT AS TO DISCLOSURE OF INFORMATION TO AUDITORS

So far as the directors are aware, there is no relevant audit information (as defined by Section 418 of the Companies Act 2006) of which the company's auditors are unaware, and each director has taken all the steps that he or she ought to have taken as a director in order to make himself or herself aware of any relevant audit information and to establish that the company's auditors are aware of that information.

AUDITORS

The auditors,  Alextra Audit Limited, will be proposed for re-appointment at the forthcoming Annual General Meeting.


ON BEHALF OF THE BOARD:






HS Bilinski - Director



4 March 2025


HATS GROUP LTD (REGISTERED NUMBER: 03135655)


Directors' Responsibilities Statement

FOR THE YEAR ENDED 31 AUGUST 2024


The directors are responsible for preparing the financial statements in accordance with applicable law and regulations.

Company law requires the directors to prepare the financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with Financial Reporting Standards 102 as adopted for use in the UK and Republic of Ireland. The financial statements are required by law to 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 year. In preparing these financial statements, the directors are required to

- select suitable accounting policies and then apply them consistently;
- make judgements and 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 which disclose with reasonable accuracy at any time the financial position of the company and to enable them to ensure that the financial statements comply with the Companies Act 2006. They are responsible for safeguarding the assets of the company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

The directors are responsible for the maintenance and integrity of corporate and financial information on the company's website.

Report of the Independent Auditors to the Members of

HATS Group Ltd


Opinion

We have audited the financial statements of HATS Group Ltd (the 'company') for the year ended 31 August 2024 which comprise the Income Statement, Other Comprehensive Income, Balance Sheet, Statement of Changes in Equity, Cash Flow Statement and Notes to the Cash Flow Statement, Notes to the Financial Statements, including a summary of significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland' (United Kingdom Generally Accepted Accounting Practice).

In our opinion the financial statements:
-give a true and fair view of the state of the company's affairs as at 31 August 2024 and of its profit for the year then ended;
-have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and
-have been prepared in accordance with the requirements of the Companies Act 2006.

Basis for opinion

We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditors' responsibilities for the audit of the financial statements section of our report.  We are independent of the company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the 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.


Other information

The directors are responsible for the other information. The other information comprises the information in the Strategic Report, the Report of the Directors and the Directors' Responsibilities Statement, but does not include the financial statements and our Report of the Auditors thereon.


Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon.


In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether 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.


Report of the Independent Auditors to the Members of

HATS Group Ltd



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 Strategic Report and the Report of the Directors for the financial year for which the financial statements are prepared is consistent with the financial statements; and

-

the Strategic Report and the Report of the Directors have been prepared in accordance with applicable legal requirements.


Matters on which we are required to report by exception

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


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

-

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

-

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

-

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

-

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


Responsibilities of directors

As explained more fully in the Directors' Responsibilities Statement set out on page eight, 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 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.


Report of the Independent Auditors to the Members of

HATS Group Ltd



Auditors' responsibilities for the audit of the financial statements

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


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


Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below.

As part of our planning process:

- We enquired of management the systems and controls the company has in place, the areas of financial statements that are mostly susceptible to the risk of irregularities and fraud, and whether there was any known, suspected or alleged fraud. The company did not inform us of any known, suspected or alleged fraud.

- We obtained an understanding of the legal and regulatory frameworks applicable to the company. We determined that the following were most relevant: FRS 102, Companies Act 2006 & The Health and Safety act 1974.

- We considered the incentives and opportunities that exist in the company, including the extent of management bias, which present a potential for irregularities and fraud to be perpetuated, and tailored our risk assessment accordingly.

- Using our knowledge of the company, together with the discussions held with the company at the planning stage, we formed a conclusion on the risk of misstatement due to irregularities including fraud and tailored our procedures according to this risk assessment.

The key procedures we undertook to detect irregularities including fraud during the course of the audit included:

- Identifying and testing journal entries and the overall accounting records, in particular those that were significant and unusual.

- Reviewing the financial statement disclosures and determining whether accounting policies have been appropriately applied.

- Reviewing and challenging the assumptions and judgements used by management in their significant accounting estimates, in particular in relation to doubtful debt provisions, inventory valuations & depreciation methods.

- Assessing the extent of compliance, or lack of, with the relevant laws and regulations.

- Testing key revenue lines, in particular cut-off, for evidence of management bias.

- Performing a verification of key assets.

- Obtaining third-party confirmation of material bank and loan balances.

- Documenting and verifying all significant related party balances and transactions.

- Reviewing documentation such as the company board minutes, correspondence with solicitors, for discussions of irregularities including fraud.

Owing to the inherent limitations of an audit, there is an unavoidable risk that we may not have detected some material misstatements in the financial statements even though we have properly planned and performed our audit in accordance with auditing standards. The primary responsibility for the prevention and detection of irregularities and fraud rests with the directors.


A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council's website at www.frc.org.uk/auditorsresponsibilities. This description forms part of our Report of the Auditors.


Report of the Independent Auditors to the Members of

HATS Group Ltd



Use of our report

This report is made solely to the company's members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the company's members those matters we are required to state to them in a Report of the Auditors 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.





Mr Damian Wayne Riley (Senior Statutory Auditor)

for and on behalf of Alextra Audit Limited

Unit 7-9 Macon Court

Herald Drive

Crewe

CW1 6EA


4 March 2025


HATS GROUP LTD (REGISTERED NUMBER: 03135655)


Income Statement

FOR THE YEAR ENDED 31 AUGUST 2024



Notes

£   




TURNOVER

79,443,038





Cost of sales

46,454,744




GROSS PROFIT

32,988,294





Administrative expenses

28,423,160




OPERATING PROFIT

4

4,565,134






Interest payable and similar

expenses

5

1,442,115




PROFIT BEFORE TAXATION

3,123,019





Tax on profit

6

929,872




PROFIT FOR THE FINANCIAL YEAR

2,193,147




HATS GROUP LTD (REGISTERED NUMBER: 03135655)


Other Comprehensive Income

FOR THE YEAR ENDED 31 AUGUST 2024



Notes

£   




PROFIT FOR THE YEAR

2,193,147






OTHER COMPREHENSIVE INCOME

-




TOTAL COMPREHENSIVE INCOME

FOR THE YEAR

2,193,147




HATS GROUP LTD (REGISTERED NUMBER: 03135655)


Balance Sheet

31 AUGUST 2024



Notes

£   

£   



FIXED ASSETS


Intangible assets

7

-




Tangible assets

8

23,537,304




Investments

9

202



23,537,506





CURRENT ASSETS


Debtors

10

14,821,551





Cash at bank

1,056,732




15,878,283




CREDITORS


Amounts falling due within one year

11

13,304,393




NET CURRENT ASSETS

2,573,890




TOTAL ASSETS LESS CURRENT

LIABILITIES

26,111,396





CREDITORS


Amounts falling due after more than

one year

12

(9,581,631

)




PROVISIONS FOR LIABILITIES

15

(1,620,108

)



NET ASSETS

14,909,657





CAPITAL AND RESERVES


Called up share capital

16

10,000




Retained earnings

17

14,899,657




SHAREHOLDERS' FUNDS

14,909,657




The financial statements were approved by the Board of Directors and authorised for issue on 4 March 2025 and were signed on its behalf by:






HS Bilinski - Director



HATS GROUP LTD (REGISTERED NUMBER: 03135655)


Statement of Changes in Equity

FOR THE YEAR ENDED 31 AUGUST 2024



Called up



share


Retained


Total


capital


earnings


equity

£   

£   

£   



Changes in equity

Issue of share capital

10,000


-


10,000



Total comprehensive income

-


2,193,147


2,193,147



Balance at 31 August 2024

10,000


2,193,147


2,203,147




HATS GROUP LTD (REGISTERED NUMBER: 03135655)


Cash Flow Statement

FOR THE YEAR ENDED 31 AUGUST 2024



Notes

£   



Cash flows from operating activities


Cash generated from operations

1

2,962,042




Interest element of hire purchase

payments paid

(1,442,115

)



Tax paid

84,804




Net cash from operating activities

1,604,731





Cash flows from investing activities


Purchase of tangible fixed assets

(1,459,012

)



Sale of tangible fixed assets

1,044,179




Net cash from investing activities

(414,833

)




Cash flows from financing activities


Capital repayments in year

10,935,890




Amount withdrawn by directors

(1,201,690

)



Share issue

10,000




Net cash from financing activities

9,744,200





Increase in cash and cash equivalents

10,934,098




Cash and cash equivalents at

beginning of year

2

-





Cash and cash equivalents at end

of year

2

1,056,732




HATS GROUP LTD (REGISTERED NUMBER: 03135655)


Notes to the Cash Flow Statement

FOR THE YEAR ENDED 31 AUGUST 2024


1.

RECONCILIATION OF PROFIT BEFORE TAXATION TO CASH GENERATED FROM

OPERATIONS


£   



Profit before taxation

3,123,019




Depreciation charges

4,288,192




Loss on disposal of fixed assets

211,851




Finance costs

1,442,115



9,065,177




Increase in trade and other debtors

(13,350,083

)



Increase in trade and other creditors

7,246,948




Cash generated from operations

2,962,042




2.

CASH AND CASH EQUIVALENTS



The amounts disclosed on the Cash Flow Statement in respect of cash and cash equivalents are in respect of these Balance Sheet amounts:



Year ended 31 August 2024


31/8/24


1/9/23

£   

£   



Cash and cash equivalents

1,056,732


-





3.

ANALYSIS OF CHANGES IN NET DEBT



Other



non-cash



At 1/9/23

Cash flow

changes

At 31/8/24

£   

£   

£   

£   



Net cash



Cash at bank

-


1,056,732


1,056,732



-


1,056,732


1,056,732




Debt


Finance leases

-


(10,935,890

)

(3,453,168

)

(14,389,058

)


-


(10,935,890

)

(3,453,168

)

(14,389,058

)



Total

-


(9,879,158

)

(3,453,168

)

(13,332,326

)



HATS GROUP LTD (REGISTERED NUMBER: 03135655)


Error Messages from the Cash Flow Statement

FOR THE YEAR ENDED 31 AUGUST 2024



**

CURRENT YEAR -  MOVEMENT IN CASH AND CASH EQUIVALENTS


AS CALCULATED IN CASH FLOW STATEMENT


DOES NOT AGREE TO MOVEMENT PER BALANCE SHEET



COMPARE MOVEMENT ON CASH FLOW STATEMENT

=

10,934,098






TO

MOVEMENT PER BALANCE SHEET



CASH AND CASH EQUIVALENTS

=

1,056,732






HATS GROUP LTD (REGISTERED NUMBER: 03135655)


Notes to the Financial Statements

FOR THE YEAR ENDED 31 AUGUST 2024


1.

STATUTORY INFORMATION



HATS Group Ltd is a private company, limited by shares, registered in England and Wales.



Registered Office:


c/o LSR Management Limited


C2A Comet Studios


De Havilland Court, Penn Street


Amersham


Buckinghamshire


HP7 0PX



Registered number: 03135655



Head Office:


44 Weir Road


Wimbledon


SW19 8UG


2.

ACCOUNTING POLICIES



Basis of preparing the financial statements


The financial statements have been prepared under the historical cost convention and in accordance with Financial Reporting Standard 102 ("FRS 102"), the financial reporting standard applicable in the United Kingdom and the Republic of Ireland and the Companies Act 2006.



Judgements in applying accounting policies and key sources of uncertainty

The preparation of financial statements in compliance with FRS 102 requires the use of certain critical accounting estimates. It also requires management to exercise judgement in applying the Group's accounting policies.


Cash & 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.


Turnover


Turnover is measured at the fair value of the consideration received or receivable, excluding discounts, rebates, value added tax and other sales.  All billable journey's are reconciled to billing and approved by local authorities only once approved are they recognised as turnover.



Intangible assets

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

HATS GROUP LTD (REGISTERED NUMBER: 03135655)


Notes to the Financial Statements - continued

FOR THE YEAR ENDED 31 AUGUST 2024


2.

ACCOUNTING POLICIES - continued



Residual values and useful lives


Depreciation is provided at the following annual rates in order to write off the cost less estimated residual value of each asset over its estimated useful life or, if held under a finance lease, over the lease term, whichever is the shorter.  


Improvements to property

-

25% on reducing balance


Plant and machinery

-

25% on reducing balance


Fixtures and fittings

-

25% on reducing balance


Motor vehicles

-

10% on cost


In determining estimated residual values and depreciation rates on vehicles, management considers many factors, including used car market conditions, anticipated holding periods, fleet mix, buyback guarantees and historic experience. Management regularly monitors residual values and the need, if any, to adjust depreciation rates.

The annual depreciation and amortisation charge on tangible fixed assets, goodwill and tangible assets are sensitive to changes in the estimated useful economic lives and residual values of assets. The useful economic lives and residual values of the assets are amended when necessary to reflect current estimates.


Taxation

Taxation for the year comprises current and deferred tax. Tax is recognised in the Income Statement, except to the extent that it relates to items recognised in other comprehensive income or directly in equity.

Current or deferred taxation assets and liabilities are not discounted.

Current tax is recognised at the amount of tax payable using the tax rates and laws that have been enacted or substantively enacted by the balance sheet date.


Deferred tax

Deferred tax is recognised in respect of all timing differences that have originated but not reversed at the balance sheet date.

Timing differences arise from the inclusion of income and expenses in tax assessments in periods different from those in which they are recognised in financial statements. Deferred tax is measured using tax rates and laws that have been enacted or substantively enacted by the year end and that are expected to apply to the reversal of the timing difference.

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


Hire purchase and leasing commitments

Assets obtained under hire purchase contracts or finance leases are capitalised in the balance sheet. Those held under hire purchase contracts are depreciated over their estimated useful lives. Those held under finance leases are depreciated over their estimated useful lives or the lease term, whichever is the shorter.

The interest element of these obligations is charged to profit or loss over the relevant period. The capital element of the future payments is treated as a liability.

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

HATS GROUP LTD (REGISTERED NUMBER: 03135655)


Notes to the Financial Statements - continued

FOR THE YEAR ENDED 31 AUGUST 2024


2.

ACCOUNTING POLICIES - continued



Pension costs and other post-retirement benefits

The company operates a defined contribution pension scheme. Contributions payable to the company's pension scheme are charged to profit or loss in the period to which they relate.


Going concern


The directors review the on going working capital of the company to ensure that there are sufficient resources to meet its financial liabilities to continue trading in the foreseeable future. On this basis, the directors consider it appropriate to prepare the financial statements on going concern basis.



Financial instruments


The company only enters into basic financial instruments transactions that result in the recognition of financial assets and liabilities like trade and other accounts receivable and payable, loans from banks and other third parties, and loans to related parties.



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 amortised at cost using the effective interest method.  Debt instruments that are payable or receivable within one year, typically trade payables or receivables, are measured, initially and subsequently, at the discounted amount of the cash or other consideration, expected to be paid or received.  However if arrangements of a short-term instrument constitute a financing transaction, like the payment of trade debt deferred beyond normal business terms or financed at a rate of interest that is not a market rate or in case of an out-right short-term loan at market rate, the financial asset or liability is measured, initially at the present value of the future cash flow discounted at a market rate of interest for a similar debt instrument and subsequently at amortised cost.



Financial assets measured at 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 Profit and Loss Account.



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, which is an approximation of the amount that the company would receive for the asset if it were sold at the balance sheet date.



Financial assets and liabilities are offset and the net amount reported in the Balance Sheet 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.


HATS GROUP LTD (REGISTERED NUMBER: 03135655)


Notes to the Financial Statements - continued

FOR THE YEAR ENDED 31 AUGUST 2024


2.

ACCOUNTING POLICIES - continued



Impairment of non financial assets


At each reporting date non-financial assets not carried at fair value, like tangible fixed assets, are reviewed to determine whether there is an indication that an asset may be impaired. If there is an indication of possible impairment, the recoverable amount of any asset or group of related assets, which is the higher of value in use and the fair value less cost to sell, is estimated and compared with its carrying amount. If the recoverable amount is lower, the carrying amount of the asset is reduced to its recoverable amount and an impairment loss is recognised immediately in profit or loss.


If an impairment loss is subsequently reversed, the carrying amount of the asset or group of related assets is increased to the revised estimate of its recoverable amount, but not to exceed the amount that would have been determined had no impairment loss been recognised for the asset or group of related assets in prior periods. A reversal of an impairment loss is recognised immediately in profit or loss.


3.

EMPLOYEES AND DIRECTORS

£   



Wages and salaries

40,287,366




Social security costs

45,775




Other pension costs

602,611



40,935,752





The average number of employees during the year was as follows:



Administration

241




Operations

1,611



1,852




£   



Directors' remuneration

359,160





Information regarding the highest paid director is as follows:

£   



Emoluments etc

176,063




4.

OPERATING PROFIT



The operating profit is stated after charging:


£   



Hire of plant and machinery

399,944




Depreciation - owned assets

610,690




Depreciation - assets on hire purchase contracts

3,677,502




Loss on disposal of fixed assets

211,851




Auditors' remuneration

25,000




HATS GROUP LTD (REGISTERED NUMBER: 03135655)


Notes to the Financial Statements - continued

FOR THE YEAR ENDED 31 AUGUST 2024


5.

INTEREST PAYABLE AND SIMILAR EXPENSES


£   



Hire purchase

1,442,115




6.

TAXATION



Analysis of the tax charge


The tax charge on the profit for the year was as follows:

£   



Current tax:


UK corporation tax

895,436





Deferred tax

34,436




Tax on profit

929,872





Reconciliation of total tax charge included in profit and loss


The tax assessed for the year is higher than the standard rate of corporation tax in the UK. The difference is explained below:


£   



Profit before tax

3,123,019




Profit multiplied by the standard rate of corporation tax in

the UK of 25%  

780,755





Effects of:


Expenses not deductible for tax purposes

66,259




Capital allowances in excess of depreciation

-




Depreciation in excess of capital allowances

82,858




Partial year at 19%  

-




Deferred tax on accelerated capital allowances  

-





Total tax charge

929,872




7.

INTANGIBLE FIXED ASSETS


Goodwill

£   



COST


At 1 September 2023


and 31 August 2024

3,000




AMORTISATION


At 1 September 2023


and 31 August 2024

3,000




NET BOOK VALUE


At 31 August 2024

-




At 31 August 2023

-




HATS GROUP LTD (REGISTERED NUMBER: 03135655)


Notes to the Financial Statements - continued

FOR THE YEAR ENDED 31 AUGUST 2024


8.

TANGIBLE FIXED ASSETS


Improvements


Fixtures



to


Plant and


and


Motor



property


machinery


fittings


vehicles


Totals

£   

£   

£   

£   

£   



COST OR VALUATION


At 1 September 2023

380,847


1,814,055


554,113


29,582,490


32,331,505




Additions

73,878


458,525


42,010


4,337,767


4,912,180




Disposals

(7,731

)

-


-


(2,788,919

)

(2,796,650

)



At 31 August 2024

446,994


2,272,580


596,123


31,131,338


34,447,035




DEPRECIATION


At 1 September 2023

169,944


986,212


403,869


6,602,134


8,162,159




Charge for year

53,019


268,538


42,081


3,924,554


4,288,192




Eliminated on disposal

(4,388

)

-


-


(1,536,232

)

(1,540,620

)



At 31 August 2024

218,575


1,254,750


445,950


8,990,456


10,909,731




NET BOOK VALUE


At 31 August 2024

228,419


1,017,830


150,173


22,140,882


23,537,304




At 31 August 2023

210,903


827,843


150,244


22,980,356


24,169,346




The asset value of all fixed assets was reviewed within the financial period.

Assets obtained under hire purchase contracts or finance leases are capitalised in the balance sheet. Those held under hire purchase contracts are depreciated over their estimated useful lives. Those held under finance leases are depreciated over their useful lives or the lease term, whichever is the shorter.

The interest element of those obligations is charged to the profit and loss account over the relevant period. The capital element of the future payments is treated as a liability.

The net book value of assets held under hire purchase contracts is £14,009,670 (2023: £14,745,302).

Rentals paid under operating leases are charged to the profit and loss account on a straight line basis over the period of the lease.

9.

FIXED ASSET INVESTMENTS


Shares in


group


undertakings

£   



COST


At 1 September 2023


and 31 August 2024

202




NET BOOK VALUE


At 31 August 2024

202




At 31 August 2023

202




HATS GROUP LTD (REGISTERED NUMBER: 03135655)


Notes to the Financial Statements - continued

FOR THE YEAR ENDED 31 AUGUST 2024


9.

FIXED ASSET INVESTMENTS - continued



The company owns:-



101 (100%) of the share capital in Healthcare and Transport Services Limited, a dormant company registered in England and Wales 07368747.



101 (100%) of the share capital of HATS (On Demand) Limited, a dormant company registered in England and Wales 07368860.


10.

DEBTORS: AMOUNTS FALLING DUE WITHIN ONE YEAR


£   



Trade debtors

5,538,929




Other debtors

3,408,605




VAT

2,661,066




Prepayments and accrued income

3,212,951



14,821,551




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

11.

CREDITORS: AMOUNTS FALLING DUE WITHIN ONE YEAR


£   



Hire purchase contracts  (see note 13)

4,807,427




Trade creditors

1,740,241




Tax

980,240




Social security and other taxes

849,875




Net wages and drivers

107,833




Other creditors

772,410




Accruals and deferred income

4,046,367



13,304,393




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

12.

CREDITORS: AMOUNTS FALLING DUE AFTER MORE THAN

ONE YEAR


£   



Hire purchase contracts  (see note 13)

9,581,631




HATS GROUP LTD (REGISTERED NUMBER: 03135655)


Notes to the Financial Statements - continued

FOR THE YEAR ENDED 31 AUGUST 2024


13.

LEASING AGREEMENTS



Minimum lease payments under hire purchase fall due as follows:


£   



Net obligations repayable:


Within one year

4,807,427




Between one and five years

9,581,631



14,389,058




14.

SECURED DEBTS



The following secured debts are included within creditors:


£   



Hire purchase contracts

14,389,058





Hire purchase liabilities are secured against relevant assets.  The value of vehicles with hire purchase liabilities was £13,379,162 (2023: £14,745,302).


15.

PROVISIONS FOR LIABILITIES

£   



Deferred tax


Accelerated capital allowances

1,620,108





Deferred



tax


£   



Provided during year

34,436




Balance at 31 August 2024

34,436




16.

CALLED UP SHARE CAPITAL



Allotted, issued and fully paid:


Number:

Class:

Nominal


value:

£   



10,000

Ordinary

£1

10,000




17.

RESERVES


Retained


earnings

£   




At 1 September 2023

12,706,510




Profit for the year

2,193,147




At 31 August 2024

14,899,657




HATS GROUP LTD (REGISTERED NUMBER: 03135655)


Notes to the Financial Statements - continued

FOR THE YEAR ENDED 31 AUGUST 2024


18.

CONTINGENT LIABILITIES



On the 30th of November 2020 the company transferred in from Healthcare and Transport Services Limited all of its trade, business, assets and liabilities.  The company did not apply for HMRC clearance on this transaction prior to its effect and whilst the directors do not consider that a tax charge arises as a result of this, there is a possibility that HMRC could seek to review the transaction for any tax implications.  HMRC are also reviewing the company's previous corporation tax returns the outcome of which is currently difficult to determine, however the directors are confident that there will be no adjustments from this review.


19.

LEASE COMMITMENTS


At 31 August 2024 the company had future minimum lease payments under non-cancellable operating leases totalling £2,457,083 (2023: £2,657,196).

20.

PENSION COMMITMENTS


The company operates a defined contribution pension scheme. The assets of the scheme are held separately from those of the company in an independently administered fund. The pension costs charge represents contributions payable by the company and amounted to £602,611 (2023: £667,706). Contributions totalling £130,160 were payable at the year end and are included in creditors.

21.

DIRECTORS' ADVANCES, CREDITS AND GUARANTEES


At the start of the financial year Mr H Bilinski was owed £195,039 by the company, he was advanced £1,811,527 within the year, at the year end the balance due to the company was £1,201,690. Interest has been charged on this amount and it is due for repayment on demand. Post year end this was reduce to £600,000.

22.

RELATED PARTY DISCLOSURES



Anthony Howard Consultancy, a business owned and controlled by Mr A Howard

£   



Consultancy fees  

119,992





Healthcare Personnel Solutions Limited, a company owned and controlled by Mr A Howard  

£   



Purchases  

859,270





Transport Resource Services Limited, a company owned and controlled by Mr H Bilinski  

£   



Purchases  

2,158,519




Amount due from related party  

2,206,914





The directors guarantee the amount due to HATs Group Limited.


23.

FUNCTIONAL & PRESENTATIONAL CURRENCY



The company's functional and presentational currency is GBP (£).


HATS GROUP LTD (REGISTERED NUMBER: 03135655)


Notes to the Financial Statements - continued

FOR THE YEAR ENDED 31 AUGUST 2024


24.

CAPITAL AND LEASE COMMITMENTS



As 31 August 2024 the company had capital commitments of £1,671,131 and £1,662,180 of associated hire purchase liability commitments.