Company registration number 13696717 (England and Wales)
HAWKRIDGE HOLDINGS LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MAY 2024
HAWKRIDGE HOLDINGS LIMITED
COMPANY INFORMATION
Directors
S. M. Elliott
K. S. McLaughlin
Company number
13696717
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
Solicitors
Weightmans
1 St James Gate
Newcastle Upon Tyne
Tyne And Wear
United Kingdom
NE1 4AD
HAWKRIDGE HOLDINGS LIMITED
CONTENTS
Page
Strategic report
1 - 2
Directors' report
3
Directors' responsibilities statement
4
Independent auditor's report
5 - 7
Group income statement
8
Group statement of comprehensive income
9
Group statement of financial position
10
Company statement of financial position
11
Group statement of changes in equity
12
Company statement of changes in equity
13
Group statement of cash flows
14
Notes to the financial statements
15 - 33
HAWKRIDGE HOLDINGS 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 group is that of a holding company. The principal activity of the group during the period was the manufacture and distribution of electrical components.
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 group 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 21% to £17.3m (2023: £14.3m), the group underperformed due to wage increases, excessive energy costs, high inflation and the continuing global uncertainty.
Future developments
Even though, by the end of the year, the group was facing many challenges. the directors remain extremely positive and optimistic about the future of the business. Going forward, the group’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 group remains clear about its priorities, committed to achieving its ambitious growth plans and seizing the opportunities that lie ahead.
The group's key financial and other performance indicators during the year were as follows:
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Number of customer complaints | | | |
HAWKRIDGE HOLDINGS LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2024
- 2 -
Principal risks and uncertainties
The group’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 group performs ongoing credit evaluations of its customer’s financial condition.
Liquidity risk is the risk that the group 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 group 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.
The group is exposed to foreign exchange risk from various exposures primarily with respect to the U.S. dollar and the euro. The risk is not perceived as being material to the accounts due to the group holding both euro and dollar bank accounts and utilising these to pay foreign currency suppliers.
Uncertain global events and disruptions are leading to greater volatility in the business environment. The group will continue to monitor drivers for macroeconomic changes and implement appropriate procedures and processes to manage their impact on the group’s performance in areas such as energy costs, raw material prices, taxation and tariffs. This will enable the group to ensure the risk is managed appropriately.
K. S. McLaughlin
Director
12 May 2025
HAWKRIDGE HOLDINGS 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 group has an established, structured approach to risk management. The group'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 group 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 group.
Auditor
In accordance with section 485 of the Companies Act 2006, a resolution for the re-appointment of Azets Audit Services as auditors 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 auditor of the company 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 auditor of the company is aware of that information.
On behalf of the board
K. S. McLaughlin
Director
12 May 2025
HAWKRIDGE HOLDINGS 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 group and company, and of the profit or loss of the group for that period. In preparing these financial statements, the directors are required to:
select suitable accounting policies 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 group and company will continue in business.
The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the group’s and company’s transactions and disclose with reasonable accuracy at any time the financial position of the group and 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 group and company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
HAWKRIDGE HOLDINGS LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF HAWKRIDGE HOLDINGS LIMITED
- 5 -
Opinion
We have audited the financial statements of Hawkridge Holdings Limited (the 'parent company') and its subsidiaries (the 'group') for the year ended 31 May 2024 which comprise the group income statement, the group statement of comprehensive income, the group statement of financial position, the company statement of financial position, the group statement of changes in equity, the company statement of changes in equity, the group statement of cash flows 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 group's and the parent company's affairs as at 31 May 2024 and of the group's 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 group and parent 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 group's and parent company’s ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.
Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.
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.
HAWKRIDGE HOLDINGS LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF HAWKRIDGE HOLDINGS LIMITED
- 6 -
Matters on which we are required to report by exception
In the light of the knowledge and understanding of the group and the parent company and their 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 by the parent company, or returns adequate for our audit have not been received from branches not visited by us; or
the parent company financial statements are not in agreement with the accounting records and returns; or
certain disclosures of directors' remuneration specified by law are not made; or
we have not received all the information and explanations we require for our audit.
Responsibilities of directors
As explained more fully in the directors' responsibilities statement, 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 parent company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the parent 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.
HAWKRIDGE HOLDINGS LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF HAWKRIDGE HOLDINGS 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 entity 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
12 May 2025
Chartered Accountants
Statutory Auditor
Bulman House
Regent Centre
Gosforth
Newcastle upon Tyne
NE3 3LS
HAWKRIDGE HOLDINGS LIMITED
GROUP INCOME STATEMENT
FOR THE YEAR ENDED 31 MAY 2024
- 8 -
2024
2023
Notes
£
£
Turnover
3
17,285,400
14,336,978
Cost of sales
(13,459,541)
(9,867,256)
Gross profit
3,825,859
4,469,722
Distribution costs
(584,108)
(726,057)
Administrative expenses
(3,522,439)
(3,200,443)
Other operating income
107,163
59,731
Operating (loss)/profit
4
(173,525)
602,953
Interest receivable and similar income
8
6,577
3,021
Interest payable and similar expenses
9
(255,009)
(221,521)
(Loss)/profit before taxation
(421,957)
384,453
Tax on (loss)/profit
10
22,199
(255,855)
(Loss)/profit for the financial year
25
(399,758)
128,598
(Loss)/profit for the financial year is attributable to:
- Owners of the parent company
(370,727)
129,499
- Non-controlling interests
(29,031)
(901)
(399,758)
128,598
HAWKRIDGE HOLDINGS LIMITED
GROUP STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 MAY 2024
- 9 -
2024
2023
£
£
(Loss)/profit for the year
(399,758)
128,598
Other comprehensive income
Currency translation (loss)/gain taken to retained earnings
(42,092)
30,338
Total comprehensive income for the year
(441,850)
158,936
Total comprehensive income for the year is attributable to:
- Owners of the parent company
(412,819)
159,837
- Non-controlling interests
(29,031)
(901)
(441,850)
158,936
HAWKRIDGE HOLDINGS LIMITED
GROUP STATEMENT OF FINANCIAL POSITION
- 10 -
2024
2023
Notes
£
£
£
£
Fixed assets
Goodwill
11
2,287,459
2,595,881
Tangible assets
12
2,154,928
2,045,824
4,442,387
4,641,705
Current assets
Stocks
15
2,972,208
3,581,962
Debtors
16
4,010,157
3,932,762
Cash at bank and in hand
1,367,349
956,261
8,349,714
8,470,985
Creditors: amounts falling due within one year
17
(3,500,189)
(2,953,836)
Net current assets
4,849,525
5,517,149
Total assets less current liabilities
9,291,912
10,158,854
Creditors: amounts falling due after more than one year
18
(2,713,270)
(3,167,450)
Provisions for liabilities
Deferred tax liability
21
132,183
103,095
(132,183)
(103,095)
Net assets
6,446,459
6,888,309
Capital and reserves
Called up share capital
24
6,500,000
6,500,000
Profit and loss reserves
25
(44,265)
368,554
Equity attributable to owners of the parent company
6,455,735
6,868,554
Non-controlling interests
(9,276)
19,755
6,446,459
6,888,309
The financial statements were approved by the board of directors and authorised for issue on 12 May 2025 and are signed on its behalf by:
12 May 2025
K. S. McLaughlin
Director
Company registration number 13696717 (England and Wales)
HAWKRIDGE HOLDINGS LIMITED
COMPANY STATEMENT OF FINANCIAL POSITION
AS AT 31 MAY 2024
31 May 2024
- 11 -
2024
2023
Notes
£
£
£
£
Fixed assets
Investments
13
8,383,009
8,383,009
Current assets
Debtors
16
84,493
Creditors: amounts falling due within one year
17
(1,532,000)
(1,069,026)
Net current liabilities
(1,447,507)
(1,069,026)
Total assets less current liabilities
6,935,502
7,313,983
Creditors: amounts falling due after more than one year
18
(2,375,000)
(2,658,517)
Net assets
4,560,502
4,655,466
Capital and reserves
Called up share capital
24
6,500,000
6,500,000
Profit and loss reserves
25
(1,939,498)
(1,844,534)
Total equity
4,560,502
4,655,466
As permitted by s408 Companies Act 2006, the company has not presented its own profit and loss account and related notes. The company’s loss for the year was £94,964 (2023 - £158,517 loss).
The financial statements were approved by the board of directors and authorised for issue on 12 May 2025 and are signed on its behalf by:
12 May 2025
K. S. McLaughlin
Director
Company registration number 13696717 (England and Wales)
HAWKRIDGE HOLDINGS LIMITED
GROUP STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 MAY 2024
- 12 -
Share capital
Profit and loss reserves
Total controlling interest
Non-controlling interest
Total
£
£
£
£
£
Balance at 1 June 2022
6,500,000
208,717
6,708,717
20,656
6,729,373
Year ended 31 May 2023:
Profit for the year
-
129,499
129,499
(901)
128,598
Other comprehensive income:
Currency translation differences
-
30,338
30,338
-
30,338
Total comprehensive income
-
159,837
159,837
(901)
158,936
Balance at 31 May 2023
6,500,000
368,554
6,868,554
19,755
6,888,309
Year ended 31 May 2024:
Loss for the year
-
(370,727)
(370,727)
(29,031)
(399,758)
Other comprehensive income:
Currency translation differences
-
(42,092)
(42,092)
-
(42,092)
Total comprehensive income
-
(412,819)
(412,819)
(29,031)
(441,850)
Balance at 31 May 2024
6,500,000
(44,265)
6,455,735
(9,276)
6,446,459
HAWKRIDGE HOLDINGS LIMITED
COMPANY STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 MAY 2024
- 13 -
Share capital
Profit and loss reserves
Total
£
£
£
Balance at 1 June 2022
6,500,000
(1,686,017)
4,813,983
Year ended 31 May 2023:
Loss and total comprehensive income for the year
-
(158,517)
(158,517)
Balance at 31 May 2023
6,500,000
(1,844,534)
4,655,466
Year ended 31 May 2024:
Profit and total comprehensive income
-
(94,964)
(94,964)
Balance at 31 May 2024
6,500,000
(1,939,498)
4,560,502
HAWKRIDGE HOLDINGS LIMITED
GROUP STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 MAY 2024
- 14 -
2024
2023
Notes
£
£
£
£
Cash flows from operating activities
Cash generated from operations
30
1,519,979
1,016,559
Interest paid
(255,009)
(221,521)
Income taxes paid
(108,129)
(145,707)
Net cash inflow from operating activities
1,156,841
649,331
Investing activities
Purchase of tangible fixed assets
(459,973)
(346,647)
Proceeds from disposal of tangible fixed assets
-
(4)
Interest received
6,577
3,021
Net cash used in investing activities
(453,396)
(343,630)
Financing activities
Repayment of bank loans
(377,468)
(422,435)
Payment of finance leases obligations
85,111
124,740
Net cash used in financing activities
(292,357)
(297,695)
Net increase in cash and cash equivalents
411,088
8,006
Cash and cash equivalents at beginning of year
956,261
948,255
Cash and cash equivalents at end of year
1,367,349
956,261
HAWKRIDGE HOLDINGS LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MAY 2024
- 15 -
1
Accounting policies
Company information
Hawkridge Holdings Limited (“the company”) is a private limited company domiciled and incorporated in England and Wales. The registered office is Unit 15-19, Bedesway, Bede Industrial Estate, Jarrow, Tyne & Wear, NE32 3EN.
The group consists of Hawkridge Holdings Limited and all of its subsidiaries.
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 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 for parent company information presented within the consolidated financial statements:
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.
1.2
Business combinations
In the parent company financial statements, the cost of a business combination is the fair value at the acquisition date of the assets given, equity instruments issued and liabilities incurred or assumed, plus costs directly attributable to the business combination. The excess of the cost of a business combination over the fair value of the identifiable assets, liabilities and contingent liabilities acquired is recognised as goodwill. The cost of the combination includes the estimated amount of contingent consideration that is probable and can be measured reliably, and is adjusted for changes in contingent consideration after the acquisition date. Provisional fair values recognised for business combinations in previous periods are adjusted retrospectively for final fair values determined in the 12 months following the acquisition date. Investments in subsidiaries, joint ventures and associates are accounted for at cost less impairment.
Deferred tax is recognised on differences between the value of assets (other than goodwill) and liabilities recognised in a business combination accounted for using the purchase method and the amounts that can be deducted or assessed for tax, considering the manner in which the carrying amount of the asset or liability is expected to be recovered or settled. The deferred tax recognised is adjusted against goodwill or negative goodwill.
HAWKRIDGE HOLDINGS LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2024
1
Accounting policies
(Continued)
- 16 -
1.3
Basis of consolidation
The consolidated group financial statements consist of the financial statements of the parent company Hawkridge Holdings Limited together with all entities controlled by the parent company (its subsidiaries) and the group’s share of its interests in joint ventures and associates.
All financial statements are made up to 31 May 2024. Where necessary, adjustments are made to the financial statements of subsidiaries to bring the accounting policies used into line with those used by other members of the group.
All intra-group transactions, balances and unrealised gains on transactions between group companies are eliminated on consolidation. Unrealised losses are also eliminated unless the transaction provides evidence of an impairment of the asset transferred.
Subsidiaries are consolidated in the group’s financial statements from the date that control commences until the date that control ceases.
Accounting policies of subsidiaries have been changed where necessary to ensure consistency with the policies adopted by the group. Non-controlling interests in the net assets of consolidated subsidiaries are identified separately from the group’s equity therein. Non-controlling interests consist of the amount of those interests at the date of the original business combination and the non-controlling shareholder’s share of changes in equity since the date of the combination.
1.4
Going concern
The financial statements have been prepared on a going concern basis.
The group meets its day to day working capital requirements through cash generated from operations and group banking facilities.
The group’s forecasts and projections for the next twelve months show that the group 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 group 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 group 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.
1.5
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, 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.
HAWKRIDGE HOLDINGS LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2024
1
Accounting policies
(Continued)
- 17 -
1.6
Intangible fixed assets - goodwill
Goodwill represents the excess of the cost of acquisition of a business 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.
1.7
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.
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
Over term of lease
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 recognised in the income statement.
1.8
Fixed asset investments
Equity investments are measured at fair value through profit or loss, except for those equity investments that are not publicly traded and whose fair value cannot otherwise be measured reliably, which are recognised at cost less impairment until a reliable measure of fair value becomes available.
In the parent company financial statements, investments in subsidiaries, associates and jointly controlled entities are initially measured at cost and subsequently measured at cost less any accumulated impairment losses.
A subsidiary is an entity controlled by the group. Control is the power to govern the financial and operating policies of the entity so as to obtain benefits from its activities.
Entities in which the group has a long term interest and shares control under a contractual arrangement are classified as jointly controlled entities.
1.9
Impairment of fixed assets
At each reporting period end date, the group 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.
HAWKRIDGE HOLDINGS LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2024
1
Accounting policies
(Continued)
- 18 -
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.
1.10
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.
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.
1.11
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.
1.12
Financial instruments
The group 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 group's statement of financial position when the group becomes party to the contractual provisions of the instrument.
Financial assets and liabilities are offset and 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.
HAWKRIDGE HOLDINGS LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2024
1
Accounting policies
(Continued)
- 19 -
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 group 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 group 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.
Derecognition of financial liabilities
Financial liabilities are derecognised when the group's contractual obligations expire or are discharged or cancelled.
1.13
Equity instruments
Equity instruments issued by the group 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 group.
1.14
Taxation
The tax expense represents the sum of the tax currently payable and deferred tax.
HAWKRIDGE HOLDINGS LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2024
1
Accounting policies
(Continued)
- 20 -
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 group’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 if, and only if, there is 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.
1.15
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.
1.16
Retirement benefits
Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.
1.17
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.
Rentals payable under operating leases, including any lease incentives received, are charged to profit or loss on a straight line basis over the term of the relevant lease except where another more systematic basis is more representative of the time pattern in which economic benefits from the leased asset are consumed.
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.
HAWKRIDGE HOLDINGS LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2024
1
Accounting policies
(Continued)
- 21 -
1.18
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 group’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
17,285,400
14,336,978
2024
2023
£
£
Turnover analysed by geographical market
UK
2,060,330
1,775,029
Europe
6,119,589
3,867,855
Rest of the world
9,105,481
8,694,094
17,285,400
14,336,978
2024
2023
£
£
Other revenue
Interest income
6,577
3,021
Grants received
38,944
30,898
Rental income
20,159
9,732
Other operating income
48,060
19,101
HAWKRIDGE HOLDINGS LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2024
- 22 -
4
Operating (loss)/profit
2024
2023
£
£
Operating (loss)/profit for the year is stated after charging/(crediting):
Exchange losses/(gains)
47,634
(80,904)
Government grants
(38,944)
(30,898)
Depreciation of owned tangible fixed assets
350,869
338,225
(Profit)/loss on disposal of tangible fixed assets
-
523
Amortisation of intangible assets
308,422
308,422
Operating lease charges
201,699
199,644
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 group and company
5,500
7,000
Audit of the financial statements of the company's subsidiaries
46,600
45,000
52,100
52,000
For other services
Audit-related assurance services
7,500
-
Taxation compliance services
7,800
7,500
15,300
7,500
6
Employees
The average monthly number of persons (including directors) employed by the group and company during the year was:
Group
Company
2024
2023
2024
2023
Number
Number
Number
Number
Production staff
158
136
-
-
Administration staff
40
40
-
-
Directors
2
2
-
-
Total
200
178
HAWKRIDGE HOLDINGS LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2024
6
Employees
(Continued)
- 23 -
Their aggregate remuneration comprised:
Group
Company
2024
2023
2024
2023
£
£
£
£
Wages and salaries
7,025,775
6,051,177
Social security costs
647,716
581,072
-
-
Pension costs
354,029
299,093
8,027,520
6,931,342
7
Directors' remuneration
2024
2023
£
£
Remuneration for qualifying services
259,132
265,196
Remuneration disclosed above includes the following amounts paid to the highest paid director:
2024
2023
£
£
Remuneration for qualifying services
239,132
245,196
8
Interest receivable and similar income
2024
2023
£
£
Interest income
Interest on bank deposits
6,577
3,021
9
Interest payable and similar expenses
2024
2023
£
£
Interest on bank overdrafts and loans
26,821
36,347
Other interest on financial liabilities
188,812
170,066
Interest on finance leases and hire purchase contracts
39,376
15,108
Total finance costs
255,009
221,521
HAWKRIDGE HOLDINGS LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2024
- 24 -
10
Taxation
2024
2023
£
£
Current tax
UK corporation tax on profits for the current period
103,857
225,233
Adjustments in respect of prior periods
(108,289)
6,840
Total current tax
(4,432)
232,073
Deferred tax
Origination and reversal of timing differences
(17,767)
19,028
Changes in tax rates
4,754
Total deferred tax
(17,767)
23,782
Total tax (credit)/charge
(22,199)
255,855
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
(421,957)
384,453
Expected tax (credit)/charge based on the standard rate of corporation tax in the UK of 25.00% (2023: 20.00%)
(105,489)
76,891
Tax effect of expenses that are not deductible in determining taxable profit
77,595
62,636
Tax effect of income not taxable in determining taxable profit
(150)
(6,001)
Change in unrecognised deferred tax assets
(39,628)
42,843
Adjustments in respect of prior years
(108,289)
6,840
Effect of change in corporation tax rate
-
(6,382)
Permanent capital allowances in excess of depreciation
21,354
Effect of overseas tax rates
51,127
66,615
Effect of super reduction
4,010
(8,941)
Losses carried back
98,625
Taxation (credit)/charge
(22,199)
255,855
HAWKRIDGE HOLDINGS LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2024
- 25 -
11
Intangible fixed assets
Group
Goodwill
£
Cost
At 1 June 2023 and 31 May 2024
3,084,216
Amortisation and impairment
At 1 June 2023
488,335
Amortisation charged for the year
308,422
At 31 May 2024
796,757
Carrying amount
At 31 May 2024
2,287,459
At 31 May 2023
2,595,881
The company had no intangible fixed assets at 31 May 2024 or 31 May 2023.
12
Tangible fixed assets
Group
Leasehold property
Plant and equipment
Fixtures and fittings
Motor vehicles
Total
£
£
£
£
£
Cost
At 1 June 2023
2,945,899
4,748,023
385,361
232,299
8,311,582
Additions
249,903
38,818
171,252
459,973
Disposals
(41,638)
(41,638)
At 31 May 2024
2,945,899
4,997,926
424,179
361,913
8,729,917
Depreciation and impairment
At 1 June 2023
1,802,411
3,942,918
324,132
196,297
6,265,758
Depreciation charged in the year
48,675
222,820
32,184
47,190
350,869
Eliminated in respect of disposals
(41,638)
(41,638)
At 31 May 2024
1,851,086
4,165,738
356,316
201,849
6,574,989
Carrying amount
At 31 May 2024
1,094,813
832,188
67,863
160,064
2,154,928
At 31 May 2023
1,143,488
805,105
61,229
36,002
2,045,824
The company had no tangible fixed assets at 31 May 2024 or 31 May 2023.
HAWKRIDGE HOLDINGS LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2024
12
Tangible fixed assets
(Continued)
- 26 -
The carrying value of land and buildings comprises:
Group
Company
2024
2023
2024
2023
£
£
£
£
Long leasehold
977,827
985,640
Short leasehold
116,986
157,848
1,094,813
1,143,488
-
-
The net carrying value of tangible fixed assets includes the following in respect of assets held under finance leases or hire purchase contracts.
Group
Company
2024
2023
2024
2023
£
£
£
£
Plant and equipment
117,373
130,916
Motor vehicles
145,146
262,519
130,916
-
-
13
Fixed asset investments
Group
Company
2024
2023
2024
2023
Notes
£
£
£
£
Investments in subsidiaries
14
8,383,009
8,383,009
Movements in fixed asset investments
Company
Shares in subsidiaries
£
Cost or valuation
At 1 June 2023 and 31 May 2024
10,069,026
Impairment
At 1 June 2023 and 31 May 2024
1,686,017
Carrying amount
At 31 May 2024
8,383,009
At 31 May 2023
8,383,009
HAWKRIDGE HOLDINGS LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2024
- 27 -
14
Subsidiaries
Details of the company's subsidiaries at 31 May 2024 are as follows:
Name of undertaking
Address
Nature of business
Class of
% Held
shares held
Direct
Indirect
Hawkridge Management Limited
1
Management company
Ordinary
100.00
-
HVR Limited
1
Dormant entity
Ordinary
0
100.00
HVR International Limited
1
Manufacture and distribution of ceramic resistors
Ordinary
0
100.00
HVR Pentagon Limited
1
Manufacture of electrical components
Ordinary
0
100.00
HVR International GmbH
2
Manufacture of electrical components
Ordinary
0
100.00
HVR Advanced Power Components Inc
3
Distribution of ceramic resistors
Ordinary
0
86.96
Registered office addresses (all UK unless otherwise indicated):
1
Bedesway, Bede Industrial Estate, Jarrow, NE32 3EN, England
2
90552 Röthenbach an der Pegnitz, Grünthal 8, Germany
3
2090 Old Union Rd, Cheekrowaga, NY 14227, United States of America
15
Stocks
Group
Company
2024
2023
2024
2023
£
£
£
£
Raw materials and consumables
1,943,974
2,291,105
-
-
Work in progress
770,243
1,009,750
-
-
Finished goods and goods for resale
257,991
281,107
2,972,208
3,581,962
-
-
HAWKRIDGE HOLDINGS LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2024
- 28 -
16
Debtors
Group
Company
2024
2023
2024
2023
Amounts falling due within one year:
£
£
£
£
Trade debtors
2,885,681
3,181,390
Corporation tax recoverable
161,498
44,864
Other debtors
500,291
539,466
Prepayments and accrued income
415,832
211,906
3,963,302
3,932,762
44,864
-
Amounts falling due after more than one year:
Deferred tax asset (note 21)
46,855
39,629
Total debtors
4,010,157
3,932,762
84,493
-
17
Creditors: amounts falling due within one year
Group
Company
2024
2023
2024
2023
Notes
£
£
£
£
Bank loans
19
190,302
372,586
Obligations under finance leases
20
95,007
65,056
Other borrowings
19
462,974
462,974
Trade creditors
1,101,029
1,182,541
Amounts owed to group undertakings
1,069,026
1,069,026
Corporation tax payable
172,617
123,680
Other taxation and social security
210,125
163,421
-
-
Government grants
22
30,706
30,828
Other creditors
576,161
426,704
Accruals and deferred income
661,268
589,020
3,500,189
2,953,836
1,532,000
1,069,026
The other creditor includes an invoice discounting facility which is secured by way of a charge over the book debts of the company.
HAWKRIDGE HOLDINGS LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2024
- 29 -
18
Creditors: amounts falling due after more than one year
Group
Company
2024
2023
2024
2023
Notes
£
£
£
£
Bank loans and overdrafts
19
156,157
351,341
Obligations under finance leases
20
133,059
77,899
Other borrowings
19
2,375,000
2,658,517
2,375,000
2,658,517
Government grants
22
49,054
79,693
2,713,270
3,167,450
2,375,000
2,658,517
19
Loans and overdrafts
Group
Company
2024
2023
2024
2023
£
£
£
£
Bank loans
346,459
723,927
Other loans
2,837,974
2,658,517
2,837,974
2,658,517
3,184,433
3,382,444
2,837,974
2,658,517
Payable within one year
653,276
372,586
462,974
Payable after one year
2,531,157
3,009,858
2,375,000
2,658,517
The bank loan is secured by way of a fixed and floating charge over the group's interest in all freehold and leasehold property held, including fixtures and fittings, plant and machinery, and intellectual property.
The group is subject to a cross guarantee between H.V.R. International Limited, HVR Pentagon Limited and HVR Limited, and a debenture in favour of Lloyds Bank plc in respect of the bank loans, dated 30 August 2013. The debenture is secured by way of a fixed and floating charge over the groups interest in all freehold and leasehold property held, including fixtures and fittings, plant and machinery, and intellectual property.
A bank loan covenant relating to one of the group's bank loans was breached in the year, however the loan is classified as being payable within one year and has subsequently been repaid in full in November 2024 in line with agreed terms.
20
Finance lease obligations
Group
Company
2024
2023
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
-
-
Finance leases are secured on the assets to which they relate.
HAWKRIDGE HOLDINGS LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2024
- 30 -
21
Deferred taxation
The following are the major deferred tax liabilities and assets recognised by the group and company, and movements thereon:
Liabilities
Liabilities
Assets
Assets
2024
2023
2024
2023
Group
£
£
£
£
Accelerated capital allowances
155,240
122,571
-
-
Tax losses
(13,751)
-
39,629
-
Retirement benefit obligations
(9,306)
(19,476)
7,226
-
132,183
103,095
46,855
-
Liabilities
Liabilities
Assets
Assets
2024
2023
2024
2023
Company
£
£
£
£
Tax losses
-
-
39,629
-
Group
Company
2024
2024
Movements in the year:
£
£
Liability at 1 June 2023
103,095
-
Credit to profit or loss
(17,767)
(39,629)
Liability/(Asset) at 31 May 2024
85,328
(39,629)
22
Government grants
Group
Company
2024
2023
2024
2023
£
£
£
£
Arising from government grants
79,760
110,521
-
-
Deferred income is included in the financial statements as follows:
Current liabilities
30,706
30,828
Non-current liabilities
49,054
79,693
79,760
110,521
-
-
HAWKRIDGE HOLDINGS LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2024
- 31 -
23
Retirement benefit schemes
2024
2023
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
354,029
299,093
A defined contribution pension scheme is operated for all qualifying employees. The assets of the scheme are held separately from those of the group in an independently administered fund. The pension cost charge for the period represents contributions payable by the group to the scheme and amounted to £354,029.
24
Share capital
Group and company
2024
2023
2024
2023
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary shares of £1 each
6,500,000
6,500,000
6,500,000
6,500,000
25
Profit and loss reserves
Group
Company
2024
2023
2024
2023
£
£
£
£
At the beginning of the year
368,554
208,717
(1,844,534)
(1,686,017)
Profit/(loss) for the year
(370,727)
129,499
(94,964)
(158,517)
Currency translation differences
(42,092)
30,338
At the end of the year
(44,265)
368,554
(1,939,498)
(1,844,534)
26
Operating lease commitments
Lessee
At the reporting end date the group had outstanding commitments for future minimum lease payments under non-cancellable operating leases, which fall due as follows:
Group
Company
2024
2023
2024
2023
£
£
£
£
Within one year
43,237
151,632
-
-
Between two and five years
121,977
165,213
-
-
165,214
316,845
-
-
27
Related party transactions
Transactions with related parties
HAWKRIDGE HOLDINGS LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2024
27
Related party transactions
(Continued)
- 32 -
Summary of transactions with all subsidiaries
The total sales made to HVR Advanced Power Components Inc. in which a subsidiary of HVR International Limited has a 86.96% equity interest was £879,030 (2023 - £874,538). The amount outstanding at the year end was £156,078 (2023 - £86,084).
The total purchases made from HVR Advanced Power Components Inc., was £43,025 (2023 - £78,539). The amount outstanding at the year end was £5,852 (2023 - £24,890).
28
Directors' transactions
Group
Opening balance
Interest charged
Closing balance
£
£
£
K. S. McLaughlin - Director's loan
(2,658,517)
(179,457)
(2,837,974)
S. M. Elliott - Director's loan
117,500
-
117,500
(2,541,017)
(179,457)
(2,720,474)
Company
The above transaction with K.S. McLaughlin is within the company.
29
Controlling party
The ultimate controlling party is S. M. Elliott.
30
Cash generated from group operations
2024
2023
£
£
(Loss)/profit for the year after tax
(399,758)
128,598
Adjustments for:
Taxation (credited)/charged
(22,199)
255,855
Finance costs
255,009
221,521
Investment income
(6,577)
(3,021)
(Gain)/loss on disposal of tangible fixed assets
-
523
Amortisation and impairment of intangible assets
308,422
308,422
Depreciation and impairment of tangible fixed assets
350,869
338,225
Movements in working capital:
Decrease/(increase) in stocks
609,754
(1,416,694)
Decrease in debtors
130,958
56,124
Increase in creditors
324,262
1,157,904
Decrease in deferred income
(30,761)
(30,898)
Cash generated from operations
1,519,979
1,016,559
HAWKRIDGE HOLDINGS LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2024
- 33 -
31
Analysis of changes in net debt - group
1 June 2023
Cash flows
31 May 2024
£
£
£
Cash at bank and in hand
956,261
411,088
1,367,349
Borrowings excluding overdrafts
(3,382,444)
198,011
(3,184,433)
Obligations under finance leases
(142,955)
(85,111)
(228,066)
(2,569,138)
523,988
(2,045,150)
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