Registration number:
H.V.R. International Limited
for the Year Ended 31 May 2022
H.V.R. International Limited
Contents
Company Information |
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Strategic Report |
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Directors' Report |
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Statement of Directors' Responsibilities |
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Independent Auditor's Report |
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Income Statement |
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Statement of Financial Position |
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Statement of Changes in Equity |
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Notes to the Financial Statements |
H.V.R. International Limited
Company Information
Directors |
S. M. Elliott K. S. McLaughlin |
Registered office |
|
Solicitors |
|
Auditor |
|
H.V.R. International Limited
Strategic Report for the Year Ended 31 May 2022
The directors present their strategic report for the year ended 31 May 2022.
Principal activity
The principal activity of the company is the manufacture and distribution of ceramic resistors.
Fair review of the business
By the end of 2021, the company was still facing many challenges that began in early 2020 with the onset of the COVID-19 pandemic. Staff absenteeism remained consistently high, logistic issues caused supply chain disruption, multiple waves of the virus restricted travel, raw material shortages continued and then the added pressures of Brexit. This perfect storm resulted in a rapid decline in orders in the summer months of 2021, forcing the company to make a small number of redundancies during the year.
The challenges during 2021/22 can be demonstrated by the results, there was a sharp decrease in turnover of 23% to £7.399m (2021: £9.552m) in the year.
Position at the year end
Despite the difficult year, the directors remain extremely positive and optimistic about the future of the business. This growing confidence was demonstrated with the green shoots displayed in the last quarter of the year where there was a sudden shift in fortunes as orders started to increase, absenteeism reduced, and turnover bounced back. Looking ahead, whilst the company is aware the multiple COVID-19 waves, the continued lockdowns in Mainland China and the current macroeconomic outlook does create some challenges and uncertainty in the near term, it is still confident it can achieve revenue growth in the medium term.
The company's key financial and other performance indicators during the year were as follows:
Unit |
2022 |
2021 |
|
Gross Profit |
% |
15 |
26 |
Number of customer complaints |
No. |
17 |
18 |
Principal risks and uncertainties
The company’s activities expose it to a variety of financial risks, including the effects of credit, liquidity, cash flow, interest rate risks and foreign exchange risks. In order to mitigate these risks in the most cost-effective manner, the company’s risk management is addressed through a framework of policies, procedures and internal controls. All policies are reviewed on an ongoing basis by management.
Financial assets that expose the group to financial risk consist primarily of trade debtors and cash. Financial liabilities that expose the group to financial risk consist principally of trade creditors and loans.
Credit risk is the risk of loss in value of financial assets due to counterparties failing to meet all or part of their obligations. The company performs ongoing credit evaluations of its customer’s financial condition.
Liquidity risk is the risk that the company does not have sufficient liquid assets to meet its obligations as they fall due. Liquidity is maintained at a prudent level and the group ensures there is an adequate liquidity buffer to cover contingencies. The company maintains sufficient cash and open credit lines from its bankers to meet funding requirements.
Interest rate risk regarding unfavourable movements in interest rates is not perceived as being material to the accounts due to the borrowing agreements in place.
H.V.R. International Limited
Strategic Report for the Year Ended 31 May 2022 (continued)
The company 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 company holding both euro and dollar bank accounts and utilising these to pay foreign currency suppliers.
It is clear 2022/23 is going to be another challenging year for the world economy with the very real prospect of a global recession. There is an increased level of macroeconomic uncertainty such as cost and wage inflation, volatile commodity prices and currency fluctuations. In addition to this, the company will continue to grapple and manage labour shortages, sourcing raw material supply, logistic backlogs and operational cost pressures.
Geopolitical events such as the war in Ukraine has exacerbated the situation, adding further pressure and uncertainty on global supplies. We are actively monitoring the situation and continue to put contingency measures in place to manage these risks. We believe we understand the short-term risks and impacts and have controls in place. However, the long-term impacts remain uncertain, we will continue to monitor the situation closely.
Approved and authorised for issue by the
......................................... |
H.V.R. International Limited
Directors' Report for the Year Ended 31 May 2022
The directors present their report and the financial statements for the year ended 31 May 2022.
Directors of the company
The directors who held office during the year were as follows:
Financial instruments
Objectives and policies
The company has an established, structured approach to risk management. The company's activities expose it to a variety of financial risks, including the effects of credit, liquidity, cash flow, interest rate risks and foreign exchange risks. The company has adopted risk management policies that seek to mitigate these risks in a cost effective manner. Financial assets that expose the group to financial risk consist primarily of trade debtors and cash. Financial liabilities that expose the group to financial risk consist principally of trade creditors and loans.
See disclosures within the Strategic Report regarding credit, liquidity, interest rate and foreign exchange risk.
Future developments
See disclosures within the Strategic Report regarding future developments of the Company.
Going concern
The financial statements have been prepared on a going concern basis.
The company meets its day to day working capital requirements through cash generated from operations and group banking facilities.
The company’s forecasts and projections for the next twelve months show that the company should be able to continue in operational existence for that period, taking into account reasonable possible changes in trading performance. This also considers the effectiveness of available measures to assist in mitigating the impact.
The forecasts support the ability of the company to remain a going concern and to be able to trade and meets its debts as they fall due.
The directors believe that there is no material uncertainty in relation to going concern and that the company has adequate financial resources to continue in operational existence for at least twelve months from the date of signing the financial statements. Therefore the directors consider it appropriate to prepare the financial statements on a going concern basis.
H.V.R. International Limited
Directors' Report for the Year Ended 31 May 2022 (continued)
Disclosure of information to the auditor
Each director has taken steps that they ought to have taken as a director in order to make themselves aware of any relevant audit information and to establish that the company's auditors are aware of that information. The directors confirm that there is no relevant information that they know of and of which they know the auditors are unaware.
Reappointment of auditor
Azets Audit Services Limited, trading as Azets Audit Services, were appointed auditor to the company following their acquisition of the trade of Tait Walker LLP, trading as MHA Tait Walker, on 1 May 2022.
In accordance with section 485 of the Companies Act 2006, a resolution for the re-appointment of Azets Audit Services as auditor of the company is to be proposed at the forthcoming Annual General Meeting.
Approved and authorised for issue by the
......................................... |
H.V.R. International Limited
Statement of Directors' Responsibilities
The directors acknowledge their responsibilities for preparing the Annual Report and the financial statements in accordance with applicable law and regulations.
Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the company and of the profit or loss of the company for that period. In preparing these financial statements, the directors are required to:
• |
select suitable accounting policies and apply them consistently; |
• |
make judgements and accounting estimates that are reasonable and prudent; |
• |
state whether applicable United Kingdom Accounting Standards have been followed, subject to any material departures disclosed and explained in the financial statements; and |
• |
prepare the financial statements on the going concern basis unless it is inappropriate to presume that the company will continue in business. |
The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the company's transactions and disclose with reasonable accuracy at any time the financial position of the company and enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
H.V.R. International Limited
Independent Auditor's Report to the Members of H.V.R. International Limited
Opinion
We have audited the financial statements of H.V.R. International Limited (the 'company') for the year ended 31 May 2022, which comprise the Income Statement, Statement of Financial Position, Statement of Changes in Equity, and Notes to the Financial Statements, including significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice).
In our opinion the financial statements:
• | give a true and fair view of the state of the company's affairs as at 31 May 2022 and of its loss for the year then ended; |
• | have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and |
• | have been prepared in accordance with the requirements of the Companies Act 2006. |
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 auditor 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 director's 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 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.
H.V.R. International Limited
Independent Auditor's Report to the Members of H.V.R. International Limited (continued)
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 Directors' Report for the financial year for which the financial statements are prepared is consistent with the financial statements; and |
• |
the Strategic Report and Directors' Report have been prepared in accordance with applicable legal requirements. |
Matters on which we are required to report by exception
In the light of our 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 and the Directors' Report.
We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to report to you if, in our opinion:
• | adequate accounting records have not been kept, or returns adequate for our audit have not been received from branches not visited by us; or |
• | the financial statements are not in agreement with the accounting records and returns; or |
• | certain disclosures of directors' remuneration specified by law are not made; or |
• | we have not received all the information and explanations we require for our audit. |
Responsibilities of directors
As explained more fully in the Statement of Directors' Responsibilities [set out on page 6], the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.
In preparing the financial statements, the directors are responsible for assessing the company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the company or to cease operations, or have no realistic alternative but to do so.
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.
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:
• |
Enquiries of management about any known or suspected instances of non-compliance with laws and regulations and fraud; |
• |
challenging assumptions and judgements made by management in their significant accounting estimates; |
H.V.R. International Limited
Independent Auditor's Report to the Members of H.V.R. International Limited (continued)
• |
auditing the risk of management override of controls, including through testing 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 bias; and |
• |
reviewing financial statement disclosures and testing to support documentation. |
Because of the field in which the client operates, we identified the following areas 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.
Owing to the inherent limitations of an audit, there is an unavoidable risk that some material misstatements in the financial statements may not be detected, even though the audit is properly planned and performed in accordance with the ISAs (UK). For instance, the further removed non-compliance is from the events and transactions reflected in the financial statements, the less likely the auditor is to become aware of it or to recognise the non-compliance.
A further description of our responsibilities is available on the Financial Reporting Council’s website at: www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor’s report.
Use of our report
This report is made solely to the company’s members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 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.
......................................
For and on behalf of
Statutory Auditor
Chartered Accountants
Bulman House
Regent Centre
Newcastle upon Tyne
NE3 3LS
Azets Audit Services is a trading name of Azets Audit Services Limited
H.V.R. International Limited
Income Statement for the Year Ended 31 May 2022
Note |
2022 |
2021 |
|
Turnover |
|
|
|
Cost of sales |
( |
( |
|
Gross profit |
|
|
|
Distribution costs |
( |
( |
|
Administrative expenses |
( |
( |
|
Other operating income |
|
|
|
Operating (loss)/profit |
( |
|
|
Other interest receivable and similar income |
|
|
|
Interest payable and similar expenses |
( |
( |
|
(Loss)/profit before tax |
( |
|
|
Taxation |
|
( |
|
(Loss)/profit for the financial year |
( |
|
The above results were derived from continuing operations.
The company has no recognised gains or losses for the year other than the results above.
H.V.R. International Limited
(Registration number: 02589651)
Statement of Financial Position as at 31 May 2022
Note |
2022 |
2021 |
|
Fixed assets |
|||
Tangible assets |
|
|
|
Investments |
|
|
|
|
|
||
Current assets |
|||
Stocks |
|
|
|
Debtors |
|
|
|
Cash at bank and in hand |
|
|
|
|
|
||
Creditors: Amounts falling due within one year |
( |
( |
|
Net current assets |
|
|
|
Total assets less current liabilities |
|
|
|
Creditors: Amounts falling due after more than one year |
( |
( |
|
Provisions for liabilities |
( |
( |
|
Net assets |
|
|
|
Capital and reserves |
|||
Called up share capital |
|
|
|
Capital redemption reserve |
|
|
|
Profit and loss account |
|
|
|
Total equity |
|
|
Approved and authorised for issue by the
......................................... |
H.V.R. International Limited
Statement of Changes in Equity for the Year Ended 31 May 2022
Share capital |
Capital redemption reserve |
Profit and loss account |
Total |
|
At 1 June 2020 |
|
|
|
|
Profit for the year |
- |
- |
|
|
Total comprehensive income |
- |
- |
|
|
At 31 May 2021 |
|
|
|
|
Share capital |
Capital redemption reserve |
Profit and loss account |
Total |
|
At 1 June 2021 |
|
|
|
|
Loss for the year |
- |
- |
( |
( |
Total comprehensive income |
- |
- |
( |
( |
At 31 May 2022 |
|
|
|
|
H.V.R. International Limited
Notes to the Financial Statements for the Year Ended 31 May 2022
General information |
The company is a private company limited by share capital, incorporated in England and Wales.
The address of its registered office is
Accounting policies |
Summary of significant accounting policies and key accounting estimates
The principal accounting policies applied in the preparation of these financial statements are set out below. These policies have been consistently applied to all the years presented, unless otherwise stated.
Statement of compliance
These financial statements were prepared in accordance with Financial Reporting Standard 102 'The Financial Reporting Standard applicable in the United Kingdom and Republic of Ireland and the Companies Act 2006'.
Basis of preparation
These financial statements have been prepared using the historical cost convention.
These financial statements are prepared in sterling which is the functional currency of the entity.
Summary of disclosure exemptions
The entity satisfies the criteria of being a qualifying entity as defined in FRS 102. As such, advantage has been taken of the following disclosure exemptions available under paragraph 1.12 of FRS 102:
(a) Disclosures in respect of each class of share capital have not been presented.
(b) No cash flow statement has been presented for the company.
(c) Disclosures in respect of financial instruments have not been presented.
(d) No disclosure has been given for the aggregate remuneration of key management personnel.
The Company has taken advantage of the exemption available under paragraph 33.1A of FRS 102 and does not disclose related party transactions with members of the same group that are wholly owned.
H.V.R. International Limited
Notes to the Financial Statements for the Year Ended 31 May 2022 (continued)
2 |
Accounting policies (continued) |
Going concern
The financial statements have been prepared on a going concern basis.
The company meets its day to day working capital requirements through cash generated from operations and group banking facilities.
The company’s forecasts and projections for the next twelve months show that the company should be able to continue in operational existence for that period, taking into account reasonable possible changes in trading performance. This also considers the effectiveness of available measures to assist in mitigating the impact.
The forecasts support the ability of the company to remain a going concern and to be able to trade and meets its debts as they fall due.
The directors believe that there is no material uncertainty in relation to going concern and that the company has adequate financial resources to continue in operational existence for at least twelve months from the date of signing the financial statements. Therefore the directors consider it appropriate to prepare the financial statements on a going concern basis.
Exemption from preparing group accounts
The financial statements contain information about H.V.R. International Limited as an individual company and do not contain consolidated financial information as the parent of a group.
The company is exempt under section 400 of the Companies Act 2006 from the requirement to prepare consolidated financial statements as it and its subsidiary undertakings are included by full consolidation in the consolidated financial statements of its parent, Hawkridge Management Limited, a company incorporated in England and Wales.
H.V.R. International Limited
Notes to the Financial Statements for the Year Ended 31 May 2022 (continued)
2 |
Accounting policies (continued) |
Judgements
The preparation of the financial statements requires management to make judgements, estimates and assumptions that affect the amounts reported. These estimates and judgements are continually reviewed and are based on experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances. |
The preparation of the financial statements requires management to make judgements, estimates and assumptions that affect the amounts reported. These estimates and judgements are continually reviewed and are based on experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances. |
The judgements (apart from those involving estimations) that management has made in the process of applying the entity's accounting policies and that have the most significant effect on the amounts recognised in the financial statements are as follows: |
Assessing indicators of impairment - In assessing whether there have been indicators of impairment of assets, the directors have considered both external and internal sources of information such as market conditions, counterparty credit ratings and experience of recoverability. |
Key sources of estimation uncertainty
Accounting estimates and assumptions are made concerning the future and, by their nature, will rarely equal the related actual outcome. The key assumptions and other sources of estimation uncertainty that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are as follows:
Useful economic lives of tangible assets - The annual depreciation charge is sensitive to changes in the estimated useful lives of the assets. The useful economic lives are re-assessed annually. They are amended when necessary to reflect current estimates, future investments and economic utilisation. The carrying amount is £824,875 (2021 - £1,098,460).
Impairment of debtors - The company makes an estimate of the recoverable value of the trade and other debtors. When assessing impairment of trade and other debtor, management considers factors including the current credit rating of the debtor, the ageing profile of debtors and historical experience.
Revenue recognition
Turnover comprises the fair value of the consideration received or receivable for the sale of goods and provision of services in the ordinary course of the company’s activities. Turnover is shown net of value added tax, returns, rebates and discounts.
The company recognises revenue when the amount of revenue can be reliably measured, it is probable that future economic benefits will flow to the entity and specific criteria have been met for each of the company's activities.
H.V.R. International Limited
Notes to the Financial Statements for the Year Ended 31 May 2022 (continued)
2 |
Accounting policies (continued) |
Government grants
Government grants are recognised at the fair value of the asset received or receivable. Grants are not recognised until there is reasonable assurance that the company will comply with the conditions attaching to them and the grants will be received.
Government grants are recognised using the accrual model or the performance model.
Under the accrual model, government grants relating to revenue are recognised on a systematic basis over the periods in which the company recognises the related costs for which the grant is intended to compensate. Grants that are receivable as compensation for expenses or losses already incurred or for the purpose of giving immediate financial support to the entity with no future related costs are recognised in income in the period in which it becomes receivable.
Grants relating to assets are recognised in income on a systematic basis over the expected useful life of the asset. Where part of a grant relating to an asset is deferred, it is recognised as deferred income and not deducted from the carrying amount of the asset.
Under the performance model, where the grant does not impose specified future performance-related conditions on the recipient, it is recognised in income when the grant proceeds are received or receivable. Where the grant does impose specified future performance-related conditions on the recipient, it is recognised in income only when the performance-related conditions have been met. Where grants received are prior to satisfying the revenue recognition criteria, they are recognised as a liability.
Government grants relating to the costs incurred by the company are recognised in the income statement over the period necessary to match them with costs that they are intended to compensate. Government grants are presented separately and disclosed in Other operating income in the income statement. Other operating income includes the UK Government assistance provided through Coronavirus Job Retention Scheme during the Covid-19 pandemic.
Foreign currency transactions and balances
Non-monetary items measured in terms of historical cost in a foreign currency are not retranslated.
Tax
The tax expense for the period comprises current and deferred tax. Tax is recognised in profit or loss, except that a charge attributable to an item of income or expense recognised as other comprehensive income is also recognised directly in other comprehensive income.
Deferred tax is recognised in respect of all timing differences between taxable profits and profits reported in the financial statements. Unrelieved tax losses and other deferred tax assets are recognised when it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits. Deferred tax is measured using the tax rates and laws that have been enacted or substantively enacted by the reporting date and that are expected to apply to the reversal of the timing difference.
H.V.R. International Limited
Notes to the Financial Statements for the Year Ended 31 May 2022 (continued)
2 |
Accounting policies (continued) |
Tangible assets
Tangible assets are stated in the statement of financial position at cost, less any subsequent accumulated depreciation and subsequent accumulated impairment losses.
The cost of tangible assets includes directly attributable incremental costs incurred in their acquisition and installation.
Depreciation
Depreciation is charged so as to write off the cost of assets, other than land and assets under construction over their estimated useful lives, as follows:
Asset class |
Depreciation method and rate |
|
Leasehold property |
Straight line over 15 years |
|
Property improvements |
Straight line over 10 years |
|
Plant and machinery |
Straight line over 10 years |
|
Fixtures and fittings |
Straight line over 3 years |
|
Motor vehicles |
Straight line over 4 years |
Impairment of fixed assets
For the purposes of impairment testing, when it is not possible to estimate the recoverable amount of an individual asset, an estimate is made of the recoverable amount of the cash-generating unit to which the asset belongs. The cash-generating unit is the smallest identifiable group of assets that includes the asset and generates cash inflows that largely independent of the cash inflows from other assets or groups of assets.
For impairment testing of goodwill, the goodwill acquired in a business combination is, from the acquisition date, allocated to each of the cash-generating units that are expected to benefit from the synergies of the combination, irrespective of whether other assets or liabilities of the company are assigned to those units.
Goodwill
Goodwill arising on the acquisition of an entity represents the excess of the cost of acquisition over the company’s interest in the net fair value of the identifiable assets, liabilities and contingent liabilities of the entity recognised at the date of acquisition. Goodwill is initially recognised as an asset at cost and is subsequently measured at cost less accumulated amortisation and accumulated impairment losses. Goodwill is amortised over its useful life, which shall not exceed ten years if a reliable estimate of the useful life cannot be made.
Amortisation
Amortisation is provided on intangible assets so as to write off the cost, less any estimated residual value, over their useful life as follows:
H.V.R. International Limited
Notes to the Financial Statements for the Year Ended 31 May 2022 (continued)
2 |
Accounting policies (continued) |
Asset class |
Amortisation method and rate |
Goodwill |
10 years straight line |
Investments
Investments in equity shares which are not publicly traded and where fair value cannot be measured reliably are measured at cost less impairment.
Trade debtors
Trade debtors are amounts due from customers for merchandise sold or services performed in the ordinary course of business.
Trade debtors are recognised initially at the transaction price. They are subsequently measured at amortised cost using the effective interest method, less provision for impairment. A provision for the impairment of trade debtors is established when there is objective evidence that the company will not be able to collect all amounts due according to the original terms of the receivables.
Stocks
Stocks are stated at the lower of cost and estimated selling price less costs to complete and sell. Cost is determined using the first-in, first-out (FIFO) method.
The cost of finished goods and work in progress comprises direct materials and, where applicable, direct labour costs and those overheads that have been incurred in bringing the inventories to their present location and condition. At each reporting date, stocks are assessed for impairment. If stocks are impaired, the carrying amount is reduced to its selling price less costs to complete and sell; the impairment loss is recognised immediately in profit or loss.
Trade creditors
Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Trade creditors are classified as current liabilities if the company does not have an unconditional right, at the end of the reporting period, to defer settlement of the creditor for at least twelve months after the reporting date. If there is an unconditional right to defer settlement for at least twelve months after the reporting date, they are presented as non-current liabilities.
Trade creditors are recognised initially at the transaction price and subsequently measured at amortised cost using the effective interest method.
Borrowings
Interest-bearing borrowings are initially recorded at fair value, net of transaction costs. Interest-bearing borrowings are subsequently carried at amortised cost, with the difference between the proceeds, net of transaction costs, and the amount due on redemption being recognised as a charge to the income statement over the period of the relevant borrowing.
Interest expense is recognised on the basis of the effective interest method and is included in interest payable and similar charges.
Borrowings are classified as current liabilities unless the company has an unconditional right to defer settlement of the liability for at least twelve months after the reporting date.
H.V.R. International Limited
Notes to the Financial Statements for the Year Ended 31 May 2022 (continued)
2 |
Accounting policies (continued) |
Leases
Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessee.
Assets held under finance leases are recognised at the lower of their fair value at inception of the lease and the present value of the minimum lease payments. These assets are depreciated on a straight-line basis over the shorter of the useful life of the asset and the lease term. The corresponding liability to the lessor is included in the statement of financial position as a finance lease obligation.
Lease payments are apportioned between finance costs in the income statement and reduction of the lease obligation so as to achieve a constant periodic rate of interest on the remaining balance of the liability.
Share capital
Ordinary shares are classified as equity. Equity instruments are measured at the fair value of the cash or other resources received or receivable, net of the direct costs of issuing the equity instruments. If payment is deferred and the time value of money is material, the initial measurement is on a present value basis.
Defined contribution pension obligation
A defined contribution plan is a pension plan under which fixed contributions are paid into a pension fund and the company has no legal or constructive obligation to pay further contributions even if the fund does not hold sufficient assets to pay all employees the benefits relating to employee service in the current and prior periods.
Contributions to defined contribution plans are recognised as employee benefit expense when they are due. If contribution payments exceed the contribution due for service, the excess is recognised as a prepayment.
H.V.R. International Limited
Notes to the Financial Statements for the Year Ended 31 May 2022 (continued)
2 |
Accounting policies (continued) |
Research and development
Research expenditure is written off in the period in which it is incurred.
Development expenditure incurred is capitalised as an intangible asset only when all of the following criteria are met:
* It is technically feasible to complete the intangible asset so that it will be available for use or sale;
* There is the intention to complete the intangible asset and use or sell it;
* There is the ability to use or sell the intangible asset;
* The use or sale of the intangible asset will generate probable future economic benefits;
* There are adequate technical, financial and other resources available to complete the development and to use or sell the intangible asset; and
* The expenditure attributable to the intangible asset during its development can be measured reliably.
Expenditure that does not meet the above criteria is expensed as incurred.
Turnover |
The analysis of the company's Turnover for the year from continuing operations is as follows:
2022 |
2021 |
|
Sale of goods |
|
|
The analysis of the company's Turnover for the year by market is as follows:
2022 |
2021 |
|
UK |
|
|
Rest of world |
|
|
|
|
H.V.R. International Limited
Notes to the Financial Statements for the Year Ended 31 May 2022 (continued)
Other operating income |
The analysis of the company's other operating income for the year is as follows:
2022 |
2021 |
|
Government grants |
30,000 |
30,000 |
Coronavirus Job Retention Scheme grant |
115,232 |
104,535 |
Rental income |
24,202 |
15,610 |
|
|
Operating (loss)/profit |
Arrived at after charging/(crediting)
2022 |
2021 |
|
Depreciation expense |
|
|
Research and development cost |
|
|
Foreign exchange (gains)/losses |
( |
|
Other interest receivable and similar income |
2022 |
2021 |
|
Interest income on bank deposits |
|
|
Interest payable and similar expenses |
2022 |
2021 |
|
Interest on bank overdrafts and borrowings |
|
|
Interest expense on other finance liabilities |
|
- |
|
|
Staff costs |
The aggregate payroll costs (including directors' remuneration) were as follows:
2022 |
2021 |
|
Wages and salaries |
|
|
Social security costs |
|
|
Pension costs, defined contribution scheme |
|
|
Redundancy costs |
|
- |
|
|
The average number of persons employed by the company (including directors) during the year, analysed by category was as follows:
H.V.R. International Limited
Notes to the Financial Statements for the Year Ended 31 May 2022 (continued)
8 |
Staff costs (continued) |
2022 |
2021 |
|
Production |
|
|
Administration |
|
|
|
|
Auditor's remuneration |
2022 |
2021 |
|
Audit of the financial statements |
|
|
Taxation |
Tax charged/(credited) in the income statement
2022 |
2021 |
|
Current taxation |
||
UK corporation tax |
|
|
UK corporation tax adjustment to prior periods |
( |
|
4,569 |
203,661 |
|
Deferred taxation |
||
Arising from origination and reversal of timing differences |
( |
( |
Arising from changes in tax rates and laws |
( |
|
Arising from previously unrecognised tax loss, tax credit or temporary difference of prior periods |
(1,355) |
- |
Total deferred taxation |
( |
|
Tax (receipt)/expense in the income statement |
( |
|
H.V.R. International Limited
Notes to the Financial Statements for the Year Ended 31 May 2022 (continued)
10 |
Taxation (continued) |
The tax on profit before tax for the year is lower than the standard rate of corporation tax in the UK (2021 - lower than the standard rate of corporation tax in the UK) of
The differences are reconciled below:
2022 |
2021 |
|
(Loss)/profit before tax |
( |
|
Corporation tax at standard rate |
( |
|
Effect of revenues exempt from taxation |
- |
( |
Effect of expense not deductible in determining taxable profit (tax loss) |
|
|
UK deferred tax (credit)/expense relating to changes in tax rates or laws |
( |
|
(Decrease)/increase in UK and foreign current tax from unrecognised temporary difference from a prior period |
( |
|
Tax increase from effect of capital allowances and depreciation |
|
|
Tax decrease arising from group relief |
- |
( |
Tax decrease from effect of adjustment in research and development tax credit |
( |
- |
Other tax effects for reconciliation between accounting profit and tax expense (income) |
( |
- |
Total tax (credit)/charge |
( |
|
Deferred tax
Deferred tax assets and liabilities
2022 |
Asset |
Liability |
Short term timing differences - trading |
|
- |
Fixed asset timing differences |
- |
82,508 |
|
|
2021 |
Asset |
Liability |
Short term timing differences - trading |
|
- |
Fixed asset timing differences |
- |
112,388 |
|
|
H.V.R. International Limited
Notes to the Financial Statements for the Year Ended 31 May 2022 (continued)
Intangible assets |
Goodwill |
|
Cost or valuation |
|
At 1 June 2021 |
|
At 31 May 2022 |
|
Amortisation |
|
At 1 June 2021 |
|
At 31 May 2022 |
|
Carrying amount |
|
At 31 May 2022 |
- |
At 31 May 2021 |
- |
Tangible assets |
Leasehold property |
Property improvements |
Fixtures and fittings |
Plant and machinery |
Motor vehicles |
Total |
|
Cost or valuation |
||||||
At 1 June 2021 |
|
|
|
|
|
|
Additions |
- |
|
|
|
- |
|
At 31 May 2022 |
|
|
|
|
|
|
Depreciation |
||||||
At 1 June 2021 |
|
|
|
|
|
|
Charge for the year |
|
|
|
|
|
|
At 31 May 2022 |
|
|
|
|
|
|
Carrying amount |
||||||
At 31 May 2022 |
|
|
|
|
|
|
At 31 May 2021 |
|
|
|
|
|
|
H.V.R. International Limited
Notes to the Financial Statements for the Year Ended 31 May 2022 (continued)
12 |
Tangible assets (continued) |
Assets held under finance leases and hire purchase contracts
The net carrying amount of tangible assets includes the following amounts in respect of assets held under finance leases and hire purchase contracts:
2022 |
2021 |
|
Motor vehicles |
33,930 |
57,332 |
Investments in subsidiaries, joint ventures and associates |
2022 |
2021 |
|
Investments in subsidiaries |
|
|
Subsidiaries |
£ |
Cost or valuation |
|
At 1 June 2021 |
|
At 31 May 2022 |
|
Provision |
|
At 1 June 2021 |
- |
At 31 May 2022 |
- |
Carrying amount |
|
At 31 May 2022 |
|
At 31 May 2021 |
|
Details of undertakings
Details of the investments in which the company holds 20% or more of the nominal value of any class of share capital are as follows:
Undertaking |
Registered office |
Holding |
Proportion of voting rights and shares held |
|
2022 |
2021 |
|||
Subsidiary undertakings |
||||
|
2090 Old Union Rd, Cheektowaga, NY 14227 |
Ordinary |
|
|
United States of America |
H.V.R. International Limited
Notes to the Financial Statements for the Year Ended 31 May 2022 (continued)
13 |
Investments in subsidiaries, joint ventures and associates (continued) |
Subsidiary undertakings |
HVR Advanced Power Components Inc The principal activity of HVR Advanced Power Components Inc is |
Stocks |
2022 |
2021 |
|
Raw materials and consumables |
|
|
Work in progress |
|
|
|
|
Debtors |
Current |
Note |
2022 |
2021 |
Trade debtors |
|
|
|
Amounts owed by related parties |
|
|
|
Other debtors |
|
|
|
Prepayments |
|
|
|
Directors loan accounts |
117,500 |
235,000 |
|
|
|
Creditors |
Note |
2022 |
2021 |
|
Due within one year |
|||
Loans and borrowings |
|
|
|
Trade creditors |
|
|
|
Social security and other taxes |
|
|
|
Other creditors |
|
|
|
Accrued expenses and deferred income |
|
|
|
Corporation tax liability |
6,933 |
203,662 |
|
Government grant |
|
|
|
|
|
||
Due after one year |
|||
Loans and borrowings |
- |
|
|
Government grant |
|
|
|
105,438 |
153,653 |
H.V.R. International Limited
Notes to the Financial Statements for the Year Ended 31 May 2022 (continued)
Loans and borrowings |
2022 |
2021 |
|
Current loans and borrowings |
||
Hire purchase and finance lease liabilities |
|
|
2022 |
2021 |
|
Non-current loans and borrowings |
||
Hire purchase and finance lease liabilities |
- |
|
Provisions for liabilities |
Deferred tax |
Total |
|
At 1 June 2021 |
|
|
Increase (decrease) in existing provisions |
( |
( |
At 31 May 2022 |
|
|
|
Pension and other schemes |
Defined contribution pension scheme
The company operates a defined contribution pension scheme. The pension cost charge for the year represents contributions payable by the company to the scheme and amounted to £
Contributions totalling £Nil (2021 - £
Share capital |
Allotted, called up and fully paid shares
2022 |
2021 |
|||
No. |
£ |
No. |
£ |
|
|
|
32,000 |
|
32,000 |
H.V.R. International Limited
Notes to the Financial Statements for the Year Ended 31 May 2022 (continued)
Reserves |
Called up share capital
This represents the nominal value of shares that have been issued.
Capital redemption reserve
This reserve records the nominal value of shares repurchased by the company.
Profit and loss
This reserve records retained earnings and accumulated losses.
Obligations under leases and hire purchase contracts |
Finance leases
The total of future minimum lease payments is as follows:
2022 |
2021 |
|
Not later than one year |
|
|
Later than one year and not later than five years |
- |
|
|
|
The obligations under finance leases and hire purchase contracts are secured on the assets to which they relate.
H.V.R. International Limited
Notes to the Financial Statements for the Year Ended 31 May 2022 (continued)
Related party transactions |
Transactions with directors |
2022 |
At 1 June 2021 |
Repayments by director |
At 31 May 2022 |
S. M. Elliott |
|||
Directors loan |
|
- |
|
K. S. McLaughlin |
|||
Directors loan |
|
( |
- |
2021 |
At 1 June 2020 |
At 31 May 2021 |
S. M. Elliott |
||
Directors loan |
|
|
K. S. McLaughlin |
||
Directors loan |
|
|
Parent and ultimate parent undertaking |
The company's immediate parent is
The ultimate parent is
The most senior parent entity producing publicly available financial statements is
The ultimate controlling party is