Holders Technology plc
Annual Report & Accounts 2014
Specialised PCB Materials, LED Components and Lighting Solutions
Year in brief
Holders Technology supplies special laminates and materials for printed circuit board manufacture
(“PCB”), and operates as a LED solutions provider to the lighting and industrial markets.
The overall results for 2014 were disappointing. The three PCB divisions achieved similar revenue
to 2013 but with reduced margins. The NRGstar and Opteon LED divisions both achieved
improved revenue and recorded results close to breakeven, but results from Holders Components
LED divisions in UK and Germany were behind expectation.
Highlights included:
Group revenue 6% lower than 2013
PCB revenue unchanged from 2013
LED revenue 25% lower than 2013
Operating loss before exceptional costs £290,000
Cash balances £0.63 million. No debt.
Results are summarised below:
2014
2013
£'000
£'000
Continuing Operations
Revenue
PCB
LED
Total
Gross profit
Margins
11,025
2,453
13,478
11,011
3,254
14,265
3,254
24.1%
3,467
24.3%
Operating (loss)/ profit
before exceptional items
(290)
105
(Loss)/ earnings per share
Dividend proposed/ paid
(9.47p)
0.25p
1.85p
1.0p
Total Operations
Total cash
Debt
634
Nil
1,290
nil
Contents
STRATEGIC REPORT
Chairman’s statement
Operating review
Financial review
1
2
4
Page
BOARD REPORTS
Company information
Report of the directors
Directors’ remuneration report
Corporate governance
Independent auditor’s report to the members of Holders Technology plc
FINANCIAL STATEMENTS
Consolidated income statement
Consolidated statement of comprehensive income
Statements of changes in equity
Balance sheets
Statements of cash flows
Notes to the financial statements
AGM
Notice of annual general meeting
Five year summary
6
7
10
11
13
14
14
15
16
17
18
44
47
agreement referred to earlier. We anticipate an
improved second half due to the contribution from
alternative suppliers, with further progress being
made by all the LED divisions in 2015.
R W Weinreich
Executive Chairman
5 February 2015
STRATEGIC REPORT
Chairman’s statement
The year to 30th November 2014 was particularly
challenging for the company. Performance from both
the PCB and LED divisions of our business was below
the levels we had initially expected for the year. The
Group operating result before exceptional items was a
loss of £290,000 (2013: operating profit £105,000).
The PCB market in 2014 continued to be demanding
however the PCB divisions remained profitable. The
German division, comprising 74% of Group PCB sales,
had a good first half and weaker second half. UK
operations were in turn adversely impacted by slower
customer demand and the loss of two customers
which ceased trading. Results from our small Indian
venture were satisfactory.
PCB revenues were
£11.0m; with margins at 23.1% (2013: 24.0%).
In October 2014 we announced the termination of a
major PCB supplier agreement, effective 1st January
2015. Since the announcement the UK PCB division
has been significantly restructured. This resulted in
exceptional costs of £67,000 in 2014.
The LED results overall showed modest progress,
despite revenue overall being lower than 2013. The
NRGstar and Opteon Germany divisions both
improved revenue and operating result. Holders
Components Germany was adversely impacted by
increased sales and marketing costs; however the
order book for 2015
Holders
Components UK revenue was lower than 2013 due to
the
into
loss of a major customer which went
administration. Sales revenue is now more evenly
spread over a number of customers with good sales
prospects being generated. Overall LED revenues
were £2.5m (2013: £3.3m); with margins improved to
28.9% (2013: 25.4%).
is encouraging.
Once again I would like to thank all our staff for their
hard work and support throughout a demanding
financial year.
Given the board’s continuing belief in the Group’s
future we consider it appropriate to recommend a
final dividend for the past year of 0.25p per share.
In the current year we expect overall PCB results in
the first half to be lower than in the preceding year
due to the impact of the termination of the supplier
Holders Technology plc | Annual Report & Accounts 2014 1
STRATEGIC REPORT
Operating review
Corporate strategy
Holders is committed to maintaining and increasing its
position in the PCB industry whilst increasing sales
and profitability in its LED lighting activities.
The board seeks to enhance shareholder value over
the medium to long term, whilst maintaining a
conservative
Where an
opportunity to increase market share is identified, this
internally
is addressed within
generated cash flow and bank facilities.
the bounds of
framework.
financial
Product strategy
Holders has operated for many years as a distributor
of specialised materials and equipment to the printed
circuit board (PCB) industry. The European PCB
industry has strengths in the defence, aerospace,
automotive and medical sectors, while the Far East is
dominant
in the production of consumer-related
electronics.
Holders continues to pursue its PCB strategy based on
dual positioning: both as a
low-cost source of
standard products used throughout the industry; and
as an exclusive supplier of technically sophisticated
products to the PCB sector.
In addition to the PCB industry, Holders operates as a
LED solutions provider to the lighting and industrial
markets. The product offering ranges from single LED
components, through semi assembled light modules,
to finished LED lighting products.
Our LED strategy is to provide a competitive and
complementary product range
for our selected
markets, supported by strong technical support and
industry knowledge. In addition, Holders provides
bespoke solutions
fulfil customer
in order
requirements.
to
Economic Environment
In 2014, the PCB industry faced a challenging year.
Although the market showed a slight improvement in
Germany, it continued to reduce in the UK.
The LED industry in 2014 continued to grow, with the
prices of LEDs continuing to decline. The reduction in
prices coupled with the efficiencies available from
LED technology is expected to lead to an increasing
uptake of LED lighting products across both the
commercial and domestic markets.
PCB operations
UK
UK trading operations are based
in Galashiels,
Scotland. The PCB industry in the UK is oriented
towards the aerospace and defence industries, both
of which require a broad range of products. The UK
market deteriorated in 2014, resulting in a reduction
in revenue to £2.8m. (2013: £3.3m)
Germany
The German PCB industry is particularly driven by
demand from the automotive and industrial sectors.
We believe that the German PCB business benefitted
both from a slight increase in the total market and a
gain in market share leading to an increase in revenue
to £8.1m. (2013: £7.8m)
India
Holders Technology (India) Private Limited provides
materials and services to the local PCB industry. The
company has continued to make satisfactory progress.
LED & Lighting solutions
UK
In addition to its PCB business, Holders Technology UK
has two LED trading divisions.
Holders Components specialises in providing LED
solutions both to the general lighting market and to
other industrial segments. Revenue decreased in the
year due to a major customer entering administration.
However, during the year, the division focussed on
developing bespoke solutions for customers and
building long term strategic partnerships, which has
resulted in promising opportunities for 2015.
NRGstar offers a range of energy efficient lighting
technologies, targeted at the retail and commercial
market segments. Revenue has increased in 2014 and
there are several large projects being pursued for
2015.
Holders Technology plc | Annual Report & Accounts 2014 2
STRATEGIC REPORT
Operating review (continued)
Continental Europe
In Germany, Holders Technology GmbH has two LED
trading divisions.
Holders Components specialises in providing LED
solutions to customers in continental Europe. During
2014, the division invested in marketing the HC brand
and increased revenue compared to 2013. The
division has a strong order book for 2015.
Opteon specialises in selling LED finished lighting
products for commercial LED projects. During 2014,
revenue significantly increased and this is expected to
continue during 2015.
Victoria Blaisdell
Group Managing Director
5 February 2015
Holders Technology plc | Annual Report & Accounts 2014 3
STRATEGIC REPORT
Financial review
Key performance indicators
The directors believe
following key
that
performance indicators are of most significance to
assessment of the Group’s performance and financial
position:
the
level of turnover provides an
Revenue
The
important
indication of the strength of the Group’s product
range and coverage.
Profitability
Profitability is largely a function of the gross margins
achieved and management’s success in containing
administrative expenses in relation to turnover.
Gearing and liquidity
The Group operates in a cyclical industry and the
directors have consistently applied a conservative
approach to financing the Group’s activities. The
key measures are net liquid funds and gearing,
which are described in more detail below.
Revenue
Group revenue from continuing operations decreased
from £14.3m to £13.5m. Overall PCB revenue was
unchanged, whilst LED revenue decreased by 25%.
Profitability
The operating result before exceptional items was a
loss of £290,000 compared to a profit of £105,000 in
2013. The gross profit margin was 24.1% compared to
24.3% in 2013.
Total administrative expenses before exceptional
items increased by £51,000 compared to 2013 so that
the administration cost as a proportion of revenue
increased from 21.4% in 2013 to 23.5% in 2014. This
increase was predominately due to increased sales
and marketing costs in the LED divisions.
Exceptional restructuring costs comprise £67,000 of
exceptional costs from restructuring the UK PCB
division following the
loss of a major supplier
agreement.
Post tax result
The loss for the financial year after tax, attributable to
equity shareholders was £0.4m (2013: loss of £0.2m).
The basic loss per share from continuing business
were 9.47p (2013: earnings 1.85p per share) and the
fully diluted loss per share was 9.47p (2013: loss per
share from total operations 4.98p).
Dividends
The board proposes a final dividend of 0.25p per
share to be paid on 19 May 2015 to shareholders on
the register on 1 May 2015. Including the 1.0p
interim dividend already paid on 7 October 2014 the
total dividend for 2013 would be 1.25p (2013: 2.0p).
Principal risks and uncertainties
The directors believe that the following are the
principal risks and uncertainties faced by the Group:
Competition
Both the PCB and LED sectors are highly competitive
and the Group faces competition from a wide range
of companies. The Group continually seeks the most
cost-effective sources for its products in order to
remain competitive.
Customers
The Group is exposed to the risk of bad debts.
Within the major European markets, the Group uses
credit analysis data to monitor customer risk levels
and maintain appropriate credit
Credit
insurance is used for UK customers where it is
available.
limits.
Suppliers
As with any distribution business, the Group is
dependent on maintaining supply. The Group has
diversified its product range and sources in order
not to be overly dependent on any single supplier.
Cash flow, liquidity and financing
Stock levels were reduced from £2.8m in 2013 to
£2.7m in 2014.
The Group maintains overdraft and trade financing
facilities with its banks to meet short term financing
requirements during the year. At 30 November 2014,
the Group had net cash of £0.6m compared with
£1.3m at the previous year end.
Holders Technology plc | Annual Report & Accounts 2014 4
STRATEGIC REPORT
Financial review (continued)
At 30 November 2014 the Group had net liquid funds
(trade and other receivables plus cash minus current
in the
liabilities) of £1.3m compared to £1.8m
preceding year. Net assets per ordinary share at 30
November 2014 were £1.08 compared with £1.21 in
2013.
Derivatives and other financial instruments
Operations are financed by a mixture of retained
profits and overdrafts. The board’s current policy is to
use variable rate overdraft facilities in order to
maintain short term flexibility. At 30 November 2014,
the Group had gearing, being debt divided by debt
plus shareholders’ funds, of 0.0% (2013: 0.0%).
The Group’s financial instruments, other than forward
currency contracts, comprise borrowings, cash and
items, such as trade receivables and payables that
arise directly from its operations. The main purpose
of these instruments is to raise finance for operations.
It is, and has been throughout the period under
review, the Group’s policy that no trading in financial
instruments shall be undertaken.
Currency risk and exposure
The Group enters into derivatives transactions, in the
form of forward currency contracts that are used to
manage the currency risks arising from purchases
from foreign suppliers where the products are sold in
local currencies.
The overseas sales operations during the year were in
the European Community and India. The Group has
currency exposures primarily in US dollars and Euros.
Although day to day transactional exposures are
regularly covered by forward contracts, the Group has
an underlying exposure, particularly to the euro. At
the year-end forward USD purchase contracts with a
contracted value of £1,262,000 were held as detailed
in note 20.
Conclusion
STRATEGIC REPORT
The Group continues to operate a conservative
financial policy, which leaves it well placed to benefit
from future growth opportunities.
The Strategic Report on pages 1-5 was approved by
the Board on 5 February 2015 and signed on its behalf
by
Paul Geraghty
Group Finance Director
5 February 2015
Paul Geraghty
Group Finance Director
5 February 2015
Holders Technology plc | Annual Report & Accounts 2014 5
BOARD REPORTS
Company information
Directors
R W Weinreich, Executive Chairman
V M Blaisdell, BSc, Group Managing Director
P K I Geraghty BSc, FCA, Group Finance Director
D A Mahony, BA (Econ), MSc, Non-Executive Director
Secretary
P K I Geraghty BSc, FCA
Registered office
Elstree House
Elstree Way
Borehamwood
Hertfordshire WD6 1SD
Website
www.holderstechnology.com
Registered number
1730535
Auditors
Bankers
Registrars
Grant Thornton UK LLP
Grant Thornton House
202 Silbury Boulevard
Milton Keynes MK9 1LW
HSBC
City CBC
60 Queen Victoria Street
London EC4N 4TR
Neville Registrars
Neville House
18 Laurel Lane
Halesowen
West Midlands B63 3DA
Nominated Advisor and
Broker
Northland Capital Partners Limited
131 Finsbury Pavement
London
EC2A 1NT
Holders Technology plc | Annual Report & Accounts 2014 6
BOARD REPORTS
Report of the directors
Business review and future developments
A review of the year and likely developments is contained in the Strategic Report.
Results and dividends
The group made a loss after taxation for the financial year attributable to shareholders of £373,000 (2013: loss
£179,000).
Full details are contained in the consolidated income statement on page 14. The directors have proposed a final
dividend of 0.25p per share payable on 19 May 2015 to shareholders on the register at close of business on 29 April
2015. The total dividend for the year, including the interim dividend of 1.0p (2013: 1.0p) per share paid on 7
October 2014, amounts to £49,000 (2013: £78,000), which is equivalent to 1.25p (2013: 2.0p) per share.
Financial risk management
Details of the group’s financial risk management are contained in note 4 to the financial statements.
Directors
The directors currently holding office are listed on page 6, all of whom served throughout the year. The beneficial
shareholdings of the directors at 30 November 2014 are set out in note 24 to the financial statements.
Rudi Weinreich, aged 68, Chairman and Chief Executive, was born in Austria. He has been responsible for all aspects
of the business since he started it in 1972, particularly the assessment of new products and distributorship
agreements.
Victoria Blaisdell, aged 42, joined the Group in 2004 and is now Group Managing Director. Prior to joining the group
she worked in the IT industry for over 12 years and worked in several countries as a Senior Consultant for American
Management Systems Inc.
Paul Geraghty, aged 54, joined the Group in 2011 as Group Finance Director and Company Secretary. He previously
held senior financial roles in engineering companies, including Elektron Components Limited and Protec plc.
David Mahony, aged 70, is the Senior Non-executive Director, appointed in 1988.
Substantial shareholdings
At 3 February 2015 the company had been informed of the following interests, in addition to the interests of R W
Weinreich, amounting to 3% or more in the issued ordinary share capital of the company, excluding treasury shares:
Andre Marcou
Armstrong Investments Limited
Rath Dhu Limited
Stockinvest Limited
Hugh S Pearson Gregory
Number
%
471,000
275,000
235,000
171,500
138,290
11.96%
6.98%
5.97%
4.35%
3.51%
Holders Technology plc | Annual Report & Accounts 2014 7
BOARD REPORTS
Report of the directors (continued)
Annual General Meeting
The Annual General Meeting of the Company will be held at Elstree House, Elstree Way, Borehamwood,
Hertfordshire WD6 1SD at 11.30 a.m. on 24 April 2015.
Special business at the Annual General Meeting
An ordinary resolution (set out as resolution 6 in the Notice of the Annual General Meeting) will be proposed to give
the directors authority to allot 1,386,517 ordinary shares being approximately 33% of the issued ordinary share
capital of the company as at the date of this report which includes 351,703 ordinary shares being the maximum
number of shares the company may be obliged to issue under its employee share option scheme. The authority,
when given, will expire at the conclusion of next year's annual general meeting. The directors have no present
intention of exercising this authority.
A special resolution (set out as resolution 7 in the Notice of Annual General Meeting) will be proposed to empower
the directors to allot securities of the company up to a specified amount in connection with rights issues without
having to obtain prior approval from shareholders on each occasion and also to allot a smaller number of these for
cash without first being required to offer such shares to existing shareholders. The number of ordinary shares which
may be issued for cash under the latter authority will not exceed 207,978 being approximately 5% of the issued
ordinary share capital of the company as at the date of this report. The proposed power will expire at the conclusion
of next year's Annual General Meeting.
A special resolution (set out as resolution 8 in the Notice of Annual General Meeting) will be proposed to authorise
the company to buy on the open market up to 393,955 ordinary shares of 10p each, representing 10% of the issued
ordinary share capital of the company as at the date of this report, excluding treasury shares. The directors, in
reaching any decision to purchase ordinary shares, will take into account the company’s cash resources, capital
requirements and the effect of any purchase on earnings per share.
Going Concern
The company’s business activities, together with the factors likely to affect its future development, performance and
position are set out in the Strategic Report on pages 1 to 5. The financial position of the company, its cash flows,
liquidity position and borrowing facilities are described in the Financial Review on page 4. In addition, notes 2, 3, 4,
20 and 25 to the financial statements include the company’s objectives, policies and processes for managing its
capital; its financial risk management objectives; details of its financial instruments and foreign exchange risk
mitigation activities; and its exposures to credit risk and liquidity risk. Budgets and forecasts indicate a satisfactory
going concern position.
The company has good financial resources together with a number of customers and suppliers across different
geographic areas and industries. Management have prepared budgets and forecasts covering the period to May
2016. As a consequence, the directors believe that the company is well placed to manage its business risks
successfully despite the current uncertain economic outlook.
Holders Technology plc | Annual Report & Accounts 2014 8
BOARD REPORTS
Report of the directors (continued)
Statement of directors' responsibilities
The directors are responsible for preparing the Strategic Report, Directors’ 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 International Financial Reporting
Standards as adopted by the European Union (IFRSs). 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 and profit or
loss of the company and group for that period. In preparing these financial statements, the directors are required to:
make judgments and accounting estimates that are reasonable and prudent;
state whether applicable IFRSs have been followed, subject to any material departures disclosed and explained
in the financial statements;
prepare the financial statements on the going concern basis unless it is inappropriate to presume that the
company will continue in business.
select suitable accounting policies and then apply them consistently;
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.
The directors confirm that:
so far as each of the directors is aware, there is no relevant audit information of which the company’s auditors
are unaware; and
the directors have taken all steps that they ought to have taken as directors in order to make themselves aware
of any relevant audit information and to establish that the auditors are aware of that information.
The directors are responsible for the maintenance and integrity of the corporate and financial information included
on the company’s website. Legislation in the United Kingdom governing the preparation and dissemination of
financial statements may differ from legislation in other jurisdictions.
Directors’ indemnity arrangements
The company has purchased and maintained throughout the year directors’ and officers’ liability insurance in respect
of its directors. The directors also have the benefit of the indemnity provision contained in the company’s Articles of
Association. These provisions, which are qualifying third party indemnity provisions as defined by the Companies Act,
were in force since 30 April 2007, and are currently in force.
Auditors
The auditors, Grant Thornton UK LLP, are willing to continue in office as auditors of the company and a resolution to
reappoint them will be proposed at the forthcoming Annual General Meeting.
By order of the board
Paul Geraghty
Secretary
5 February 2015
Holders Technology plc | Annual Report & Accounts 2014 9
BOARD REPORTS
Directors’ remuneration report
The directors present the directors’ remuneration report for the financial year ended 30 November 2014. As the
company is listed on AIM, it does not have to comply with the requirements of the remuneration report contained in
the listing rules.
Remuneration policy
The company policy is to design prudent executive remuneration packages to attract, motivate and retain directors
of a high calibre and to reward them for enhancing value to shareholders. The determination of the annual
remuneration packages of the senior executive directors and key members of senior management are undertaken as
set out in the corporate governance report on page 11.
There are three main elements of the remuneration packages of the executive directors:
Basic annual salary and benefits;
Share option incentives; and
Pension arrangements.
The company believes that share option incentives encourage long term commitment to shareholder value and
ensure that rewards for executive directors and senior managers are aligned with the interests of shareholders.
There is no company pension scheme in place, apart from a legacy defined benefit scheme in relation to a former
member of staff in Germany. Contributions are made to the personal pension schemes of certain directors.
Executive directors may accept up to two external non-executive appointments, as long as these are not with
competing companies and are not likely to lead to conflicts of interest. This policy is followed where such
appointments would beneficially broaden experience and knowledge.
Executive directors’ remuneration and terms of appointment
Base salaries are reviewed annually and are set to reflect responsibilities, experience and marketability. Regard is
also given to the level of rewards made in the year to staff. The mechanism for supervising the company share
option scheme and the granting of options under it is as set out in the corporate governance report on page 11.
None of the directors have service contracts with a notice period exceeding one year. Each director is entitled to
contributions to personal pension schemes and benefits in kind, which include car allowance and private health
insurance.
Non-executive directors’ remuneration
The fees paid to non-executive directors are determined by the board. Non-executive directors are normally
appointed for an initial period of three years. Appointments are made subject to retirement by rotation or removal
under the company’s articles of association. Non-executive directors do not participate in the company's option
scheme.
Details of the directors’ remuneration, pension entitlements, shareholdings and share options are included in note
24 to the financial statements.
Holders Technology plc | Annual Report & Accounts 2014 10
BOARD REPORTS
Corporate governance
UK Corporate Governance Code
We do not comply with the UK Corporate Governance
Code. Instead, we have reported on our Corporate
Governance arrangements drawing on best practice
available, including those aspects of the UK Corporate
Governance Code we consider to be relevant to the
Group and best practice.
Board composition and responsibility
During the year the board comprised three executive
directors and one non-executive director. None of
the directors are independent. The appointment of
another non-executive director will be considered
when it is judged appropriate. All directors are
required to retire and submit themselves for re-
election at three yearly intervals. No director has a
service agreement requiring more than twelve
months’ notice of termination to be given.
information
All directors receive management
in
advance of board meetings, which are held monthly,
and
the board visits subsidiary companies as
appropriate. There is a schedule of matters requiring
board approval,
strategy,
acquisitions and disposals, key appointments and
group funding strategy. All directors have access to
the advice and services of the Company Secretary
(and there are processes in place enabling directors to
legal advice at the company’s
take independent
expense in the furtherance of their duties).
corporate
including
The following table shows the number of scheduled
board and board committee meetings held during the
year ended 30 November 2014 and details of each
director’s attendance.
Number held
R Weinreich
V Blaisdell
D Mahony
P Geraghty
Board
12
12
12
12
12
Audit
2
1
1
2
1
Remuneration
1
-
-
1
-
Audit Committee
The Group Finance Director and the Non-executive
Director act as the audit committee which
is
responsible for reviewing a range of financial matters,
including
final accounts, and
monitoring the controls which are in force to ensure
the integrity of the financial information reported to
the shareholders. The committee reviews the need
interim and
the
for internal audit on an annual basis and, due to the
size of the company; the committee believes that the
cost of introducing this function would outweigh any
perceived benefits. The audit committee has met
twice in the year. The Non-executive Director meets
separately with the auditors as part of such meetings.
Remuneration Committee
During the year, the Non-executive Director has acted
as the sole member of the remuneration committee.
The principal function of the remuneration committee
is to determine on behalf of the board the
remuneration and other benefits of the executive
directors, including pensions, share options, service
contracts and compensation payments.
The
remuneration policy and key elements of the
remuneration packages of the executive directors are
included in the Directors’ Remuneration Report on
page 10.
the
The principal objectives of
remuneration
committee in respect of executive directors and the
board in respect of the company as a whole are to
ensure that the company's senior management
remuneration policies and practice facilitate the
recruitment, retention and motivation of top quality
personnel and to ensure that senior management
remuneration operates on a best-practice basis,
aligning, where practicable, the remuneration of
executives with the interests of shareholders.
Each of the company's executive directors is subject
to an annual appraisal of their performance as
executives which is conducted by the Non-executive
Director.
Board nominations
The company has formal procedures for making
appointments to the board and these would be
applied to ensure that any new appointments that
might be made meet the desired criteria.
Shareholder relationships
The objective of the board is to create increased
shareholder value by growing the business in a
manner that delivers sustainable improvement in
earnings over the medium and long term.
Holders Technology plc | Annual Report & Accounts 2014 11
BOARD REPORTS
Corporate governance (continued)
The board regards the annual general meeting as an
important opportunity to communicate with private
investors in particular. Directors make themselves
available to shareholders both before and after the
annual general meeting and at other times.
Internal Control
The system of internal controls established by the
directors is intended to be comprehensive, although
the limitations of any system of control is such that it
is designed to manage rather than eliminate the risk
of failure to achieve business objectives and to
provide a reasonable, rather than absolute, level of
assurance against material misstatement or loss. The
directors acknowledge their responsibilities for the
group’s system of internal control and for reviewing
its effectiveness.
The principal features of the system of internal
financial controls are:
budgetary control over all operating units,
measuring performance against pre-determined
targets on at least a monthly basis;
regular forecasting and reviews covering trading
performance, assets, liabilities and cash flows;
delegated
financial
expenditure and recruitment;
limits of authority covering key
capital
commitments
including
identification and management of key business
risks.
The board continually reviews the effectiveness of
financial,
other
operational,
risk
management.
compliance
including
controls,
controls
internal
and
Financial reporting
A detailed formal budgeting process for all group
businesses culminates in an annual group budget
which is approved by the board. Results for the
company and for its main constituent businesses
are reported monthly to the board against this
budget and revised forecasts for the year are
prepared each quarter.
Financial and accounting principles
A comprehensive
financial and accounting
controls manual sets out the principles of and
minimum standards required by the board for
effective financial control. The manual sets out
the
financial and accounting policies and
procedures to be applied throughout the group.
Compliance with the policies and procedures set
out in the manual is reviewed on a regular basis.
Internal financial controls assurance
In addition to the existing procedures, during the
year senior executives have prepared detailed
reports on the operation of those elements of the
system for which they are responsible.
Capital investment
The group has clearly defined guidelines for
include annual
capital expenditure.
budgets,
review
procedures, levels of authority and due diligence
requirements where businesses are being
acquired.
These
appraisals
detailed
and
Risk assessment
The group has
implemented a process for
identifying, reporting and assessing risk at each
subsidiary.
The board regularly reviews the
subsidiaries’ risk assessments.
The directors confirm that they have reviewed the
effectiveness of the system of internal controls in
operation during the year and the period to the date
of the approval of the annual report and accounts.
The board is committed to the principles of openness,
integrity and accountability in dealing with the
company's affairs. It believes it has always acted with
probity in the best interests of the company, its
employees and shareholders and fully intends to
continue to do so in the future.
Holders Technology plc | Annual Report & Accounts 2014 12
Independent auditor's report to the members of Holders Technology plc
We have audited the financial statements of Holders Technology plc for the year ended 30 November 2014 which
comprise the Consolidated income statement, the Consolidated statement of comprehensive income, Group and
Company statements of changes in equity, group and company balance sheets, the group and company statements of
cash flow, and the related notes. The financial reporting framework that has been applied in their preparation is
applicable law and International Financial Reporting Standards (IFRSs) as adopted by the European Union and, as regards
the parent company financial statements, as applied in accordance with the provisions of the Companies Act 2006.
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.
Respective Responsibilities of Directors and Auditors
As explained more fully in the Directors’ Responsibilities Statement set out on page 9, the directors are responsible for the
preparation of the financial statements and for being satisfied that they give a true and fair view. Our responsibility is to
audit and express an opinion on the financial statements in accordance with applicable law and International Standards on
Auditing (UK and Ireland). Those standards require us to comply with the Auditing Practices Board’s (APB’s) Ethical
Standards for Auditors.
Scope of the Audit of the Financial Statements
A description of the scope of an audit of financial statements is provided on the Financial Reporting Council's website at
www.frc.org.uk/auditscopeukprivate.
Opinion on Financial Statements
In our opinion:
the financial statements give a true and fair view of the state of the group's and of the parent company's affairs as at
30 November 2014 and of the group's loss for the year then ended;
the group financial statements have been properly prepared in accordance with IFRSs as adopted by the European
Union;
the parent company financial statements have been properly prepared in accordance with IFRSs as adopted by the
European Union; and
the financial statements have been prepared in accordance with the requirements of the Companies Act 2006.
Opinion on other matters prescribed by the Companies Act 2006
In our opinion 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.
Matters on which we are required to report by exception
We have nothing to report in respect of the following matters where the Companies Act 2006 requires us to report to you
if, in our opinion:
adequate accounting records have not been kept 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.
Jeremy Read
Senior Statutory Auditor
for and on behalf of Grant Thornton UK LLP
Statutory Auditor, Chartered Accountants
Milton Keynes
5 February 2015
Holders Technology plc | Annual Report & Accounts 2014 13
FINANCIAL STATEMENTS
Consolidated income statement for the year ended 30 November 2014
Continuing operations
Revenue
Cost of sales
Gross profit
Distribution costs
Administrative expenses
Restructuring costs
Other operating income
Operating (loss)/ profit
Finance income
Finance expenses
(Loss)/ profit before taxation
Tax expense
(Loss)/ profit for the year from continuing operations
Loss for the year from discontinued operations
(Loss)/ profit for the year
(Loss)/ profit for the year attributable to:
Owners of the parent
Non-controlling interest
(Loss)/ profit for the financial year
Basic (loss)/ earnings per share – continuing operations
Diluted (loss)/ earnings per share – continuing operations
Basic and diluted loss per share – discontinued operations
Total loss per share
Note
5
7
6
6
8
10
11
11
11
11
2014
£’000
13,478
(10,224)
3,254
(414)
(3,167)
(67)
37
(357)
2
(7)
(362)
(11)
(373)
-
(373)
(373)
-
(373)
(9.47p)
(9.47p)
-
(9.47p)
2013
£’000
14,265
(10,798)
3,467
(381)
(3,049)
-
68
105
4
(12)
97
(24)
73
(269)
(196)
(179)
(17)
(196)
1.85p
1.78p
(6.83p)
(4.98p)
Consolidated statement of comprehensive income for the year ended 30 November 2014
(Loss) for the year
Items that will not be reclassified subsequently to profit or loss:
Change in actuarial assumption re pension liability
Items that may be reclassified subsequently to profit or loss:
Exchange differences on translating foreign operations
Total comprehensive income and expense for the year
Total comprehensive income and expense for the year attributable to:
Owners of the parent
Non-controlling interests
2014
£’000
(373)
-
(112)
(485)
(485)
-
(485)
2013
£’000
(196)
-
114
(82)
(70)
(12)
(82)
Holders Technology plc | Annual Report & Accounts 2014 14
FINANCIAL STATEMENTS
Statements of changes in equity for the year ended 30 November 2014
Group
Share
capital
Share
premium
Capital
redemption
reserve
Translation
reserve
Retained
earnings
Balance at 30 November 2012
416
1,531
1
105
3,139
£'000
£'000
£'000
£'000
£'000
Total
attribut-
able to
owners of
parent
£'000
5,192
(78)
9
(69)
(179)
-
Total equity
Non-
controlling
interest
£'000
8
-
-
-
(17)
-
£'000
5,200
(78)
9
(69)
(196)
-
-
-
-
-
(45)
(78)
9
(69)
(179)
45
109
-
109
5
114
64
(134)
(70)
(12)
(82)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
416
1,531
1
169
2,936
5,053
(4)
5,049
-
-
-
-
-
-
-
-
-
-
-
-
-
-
416
1,531
-
-
-
-
-
-
-
1
-
-
-
-
(23)
(79)
9
(70)
(373)
19
(79)
9
(70)
(373)
(4)
(112)
-
(112)
(135)
(354)
(489)
34
2,512
4,494
-
-
-
-
4
-
4
-
(79)
9
(70)
(373)
-
(112)
(485)
4,494
Dividends
Employee share-based
payment options
Transactions with owners
(Loss) for the year
Reclassification adjustment
related to terminated foreign
operations
Exchange differences on
translating foreign operations
Total comprehensive income
for the year
Balance at 30 November 2013
Dividends
Employee share-based
payment options
Transactions with owners
(Loss) for the year
Reclassification adjustment
related to terminated foreign
operations
Exchange differences on
translating foreign operations
Total comprehensive income
for the year
Balance at 30 November 2014
Company
Balance at 1 December 2012
(Loss) and total comprehensive income for the
year
Dividends
Share-based payment charge
Balance at 30 November 2013
Profit and total comprehensive income for the
year
Dividends
Share-based payment charge
Balance at 30 November 2014
Share
capital
Share
premium
£'000
416
-
-
-
416
-
-
-
416
£'000
1,531
-
-
-
1,531
-
-
-
1,531
Capital
redemption
reserve
£'000
1
-
-
-
1
-
-
-
1
Retained
earnings
Total equity
£'000
395
(284)
(78)
9
42
79
(79)
9
51
£'000
2,343
(284)
(78)
9
1,990
79
(79)
9
1,999
Holders Technology plc | Annual Report & Accounts 2014 15
FINANCIAL STATEMENTS
Balance sheets at 30 November 2014
Company number: 1730535
Assets
Non-current assets
Goodwill
Property, plant and equipment
Investments in subsidiaries
Investment in joint venture
Deferred tax assets
Current assets
Inventories
Trade and other receivables
Current tax assets
Cash and cash equivalents
Liabilities
Current liabilities
Trade and other payables
Current tax liabilities
Net current assets
Non-current liabilities
Retirement benefit liability
Deferred tax liabilities
Shareholders’ equity
Share capital
Share premium account
Capital redemption reserve
Retained earnings
Cumulative translation adjustment reserve
Equity attributable to the shareholders of the
parent
Non-controlling interest
Note
Group
2014
£’000
2013
£’000
Company
2014
£’000
13
14
15
16
22
17
18
19
21
22
23
318
274
-
-
35
627
2,742
1,945
72
634
5,393
(1,257)
(48)
(1,305)
4,088
(201)
(20)
(221)
4,494
416
1,531
1
2,512
34
4,494
-
4,494
320
320
-
-
41
681
2,799
1,927
26
1,290
6,042
(1,413)
(34)
(1,447)
4,595
(205)
(22)
(227)
5,049
416
1,531
1
2,936
169
5,053
(4)
5,049
-
8
2,291
15
-
2,314
-
250
-
45
295
(562)
(47)
(609)
(314)
-
(1)
(1)
1,999
416
1,531
1
51
1,999
-
1,999
2013
£’000
-
16
2,308
15
-
2,339
-
225
-
480
705
(1,019)
(32)
(1,051)
(346)
-
(3)
(3)
1,990
416
1,531
1
42
-
1,990
-
1,990
The financial statements were approved by the Board on 5 February 2015 and signed on its behalf by:
R W Weinreich
Director
Holders Technology plc | Annual Report & Accounts 2014 16
FINANCIAL STATEMENTS
Statements of cash flows for the year ended 30 November 2014
Group
Company
2014
£’000
2013
£’000
2014
£’000
2013
£’000
Cash flows from operating activities
Operating (loss)/ profit
Share-based payment credit
Depreciation
Impairment costs
(Gain)/ Loss on sale of property, plant and equipment
Decrease in inventories
(Increase)/decrease in trade and other
receivables
(Decrease)/ increase in trade and other
payables
Cash (used in)/generated from operations
Corporation tax (paid)/received
Net cash (used in)/generated from operations
Cash flows from investing activities
Purchase of property, plant and equipment
Proceeds from sale of property, plant and equipment
Proceeds from sale of subsidiary
Dividends received from group undertakings
Interest received
Net cash (used in)/generated from investing activities
Cash flows from financing activities
Interest paid
Loan repayments
Settlement of contingent consideration
Equity dividends paid
Net cash used in financing activities
Net change in cash and cash equivalents
Cash and cash equivalents at start of period
Effect of foreign exchange rates
Cash and cash equivalents at end of period
(357)
9
108
(32)
-
5
(36)
(188)
(491)
(39)
(530)
(74)
3
32
-
2
(37)
(7)
-
-
(79)
(86)
(653)
1,290
(3)
634
(148)
9
110
213
1
348
322
(87)
768
(18)
750
(48)
1
-
-
4
(43)
(14)
-
(29)
(78)
(121)
586
700
4
1,290
76
9
8
17
-
-
(25)
(457)
(372)
-
(372)
-
-
-
13
3
16
-
-
-
(79)
(79)
(435)
480
-
45
(369)
9
8
472
-
-
162
219
501
72
573
(3)
-
-
-
13
10
(2)
-
(29)
(78)
(109)
474
6
-
480
Holders Technology plc | Annual Report & Accounts 2014 17
FINANCIAL STATEMENTS
Notes to the financial statements
1. General information
Holders Technology plc is incorporated in the United Kingdom under the Companies Act.
These consolidated financial statements are presented in pounds sterling and all information has been rounded
to the nearest thousand. Foreign operations are consolidated in accordance with the policies set out in note 2
below.
2. Accounting policies
Basis of preparation
The group and parent company financial statements have been prepared in accordance with EU endorsed
International Financial Reporting Standards (IFRS), International Financial Reporting Interpretations Committee
(IFRIC) interpretations and with those parts of the Companies Act applicable to companies reporting under IFRS.
All accounting standards and interpretations issued and adopted by the EU by the International Accounting
Standards Board and the International Financial Reporting Interpretations Committee effective at the time of
preparing these financial statements have been applied.
The group and parent company financial statements have been prepared under the historical cost convention
with the exception of forward currency contracts which are carried at fair value. A summary of the significant
group accounting policies adopted in the preparation of the financial statements is set out below. These
policies have been consistently applied to all the years presented, unless otherwise stated.
Going concern
The company’s business activities, together with the factors likely to affect its future development, performance
and position are set out in the Strategic Report on pages 1 to 5. The financial position of the company, its cash
flows, liquidity position and borrowing facilities are described in the Financial Review on page 4. In addition,
notes 2, 3, 4, 20 and 25 to the financial statements include the company’s objectives, policies and processes for
managing its capital; its financial risk management objectives; details of its financial instruments and foreign
exchange risk mitigation activities; and its exposures to credit risk and liquidity risk.
The company has strong financial resources together with a number of customers and suppliers across different
geographic areas and industries. The Board pursues a cautious strategy, combined with effective cost control in
order to maintain a strong working capital position. Budgets and forecasts indicate a satisfactory going concern
position. As a consequence, the directors believe that the company is well placed to manage its business risks
successfully despite the current uncertain economic outlook.
Standards and Interpretations to Standards not yet effective
The following Standards and Interpretations have been issued, but are not yet effective and have not been early
adopted by the group:
IFRS 10; Consolidated Financial Statements (Effective 1 January 2014)
IFRS 11: Joint Arrangements (Effective 1 January 2014)
IFRS12: Disclosure of Interests in Other Entities (Effective 1 January 2014)
IAS27: revised Separate Financial Statements (Effective 1 January 2014)
IAS28 Revised: Investments in Associates and Joint Ventures (Effective 1 January 2014)
Holders Technology plc | Annual Report & Accounts 2014 18
FINANCIAL STATEMENTS
Notes to the financial statements (continued)
2. Accounting policies (continued)
The directors anticipate that the adoption of these standards and interpretations in future periods will have no
material impact on the financial statements of the group except for additional disclosures when the relevant
standard comes into effect.
Use of estimates
The preparation of financial statements in conformity with IFRS requires management to make judgements,
estimates and assumptions that affect the application of policies and reported amounts of assets and liabilities,
income and expenses. The estimates and associated assumptions are based on historical experience and various
other factors that are believed to be reasonable under the circumstances, the results of which form the basis of
making the judgements about carrying values of assets and liabilities that are not readily apparent from other
sources. Actual results may differ from these estimates. Critical judgements and key estimates and assumptions
are disclosed in note 3.
Principles of consolidation
The consolidated financial statements incorporate the financial statements of the company and all its
subsidiaries. Intra-group transactions, including sales, profits, receivables and payables, have been eliminated in
the group consolidation.
Subsidiaries
Subsidiaries are entities controlled by the company. Control exists when the company has the power, directly or
indirectly, to govern the financial and operating policies of an entity so as to obtain benefits from its activities.
In assessing control, potential voting rights that presently are exercisable are taken into account. The financial
statements of subsidiaries are included from the date that control commences until the date that control
ceases.
In the parent company accounts investments and long term loans to subsidiaries are initially recorded at cost.
The investment value is subsequently recorded at cost less any impairment value.
Goodwill and business combinations
The results of subsidiaries acquired in the period are included in the income statement from the date they are
acquired. On acquisition, all of the subsidiaries’ assets and liabilities that exist at the date of acquisition are
recorded at their fair values reflecting their condition at that date. For business combinations occurring since 1
December 2009, the requirements of IFRS 3R have been applied. The consideration transferred by the group to
obtain control of a subsidiary is calculated as the sum of the acquisition-date fair values of assets transferred,
liabilities incurred and the equity interests issued by the group, which includes the fair value of any asset or
liability arising from a contingent consideration arrangement. Acquisition costs are expensed as incurred.
The group recognises identifiable assets acquired and liabilities assumed in a business combination regardless of
whether they have been previously recognised in the acquiree's financial statements prior to the acquisition.
Assets acquired and liabilities assumed are measured at their acquisition-date fair values. Goodwill is stated
after separate recognition of identifiable intangible assets. It is calculated as the excess of the sum of a) fair
value of consideration transferred, b) the recognised amount of any non-controlling interest in the acquiree and
c) acquisition-date fair value of any existing equity interest in the acquiree, over the acquisition-date fair values
of identifiable net assets. If the fair values of identifiable net assets exceed the sum calculated above, the excess
amount (i.e. gain on a bargain purchase) is recognised in profit or loss immediately. As permitted by IFRS 1,
goodwill arising on acquisitions before 1 December 2005 (date of transition to IFRS) has been frozen at the UK
GAAP amounts subject to being tested for impairment at that date.
Holders Technology plc | Annual Report & Accounts 2014 19
FINANCIAL STATEMENTS
Notes to the financial statements (continued)
2. Accounting policies (continued)
Impairment charges
The company considers at each reporting date whether there is any indication that assets are impaired. If there
is such an indication, the company carries out an impairment test by measuring an asset’s recoverable amount,
which is the higher of its fair value less costs to sell and its value in use. Goodwill, which is allocated to
individual cash generating units, is reviewed annually for impairment. Value in use represents the present value
of the future cash flows expected to be derived from the cash generating unit. The present value is discounted
using a pre-tax rate that reflects current market assessments of the time value of money and of the risks specific
to the cash generating unit for which future cash flow estimates have not been adjusted. If the recoverable
amount is less than the carrying amount an impairment loss is recognised, and the asset is written down to its
recoverable amount.
Revenue recognition
Revenue comprises the value of sales of goods and services to third party customers occurring in the period,
stated exclusive of value added tax and net of trade discounts and rebates. Revenue is measured at the fair
value of the consideration received or receivable.Revenue on the sale of goods is recognised when substantially
all of the risks and rewards in the product have passed to the customer, which is usually upon delivery to the
customer. Revenue is recognised to the extent that it is probable that the economic benefits associated with
the transaction will flow into the company.
Exceptional Items
Exceptional items are those significant items which are separately disclosed by virtue of their size or incidence
to enable a full understanding of the financial performance.
Cash and cash equivalents
Cash and cash equivalents comprise cash balances and call deposits. The company considers all highly liquid
investments with original maturity dates of three months or less to be cash equivalents. Bank overdrafts that
are repayable on demand and form an integral part of the group’s cash management system are included as a
component of cash and cash equivalents for the purpose of the statement of cash flows.
Trade and other receivables
Trade and other receivables do not carry interest and are initially stated at fair value and subsequently
measured at amortised cost using the effective interest rate, as reduced by appropriate allowances for
estimated irrecoverable amounts. A provision for impairment of trade receivables is established when there is
evidence that the group will not be able to collect all amounts due according to the original terms of these
receivables. The amount of the provision is the difference between the carrying value and the present value of
estimated future cash flows, discounted at the effective interest rate. Impairment losses are recognised in the
income statement.
Trade and other payables
Trade and other payables are not interest bearing and are initially stated at fair value and subsequently
measured at amortised cost using the effective interest rate.
Holders Technology plc | Annual Report & Accounts 2014 20
FINANCIAL STATEMENTS
Notes to the financial statements (continued)
2. Accounting policies (continued)
Inventory
Inventory is stated at the lower of cost and net realisable value. Cost is determined on a first-in-first-out basis.
Net realisable value is based on the estimated sales price after allowing for all further costs of completion and
disposal. Where necessary, provision is made for obsolete, slow-moving and defective inventory.
Property, plant and equipment
The cost of items of property, plant and equipment is its purchase cost, together with any incidental costs of
acquisition.
Depreciation is calculated to write off assets over their expected useful lives. Where there is evidence of
impairment, property, plant and equipment is written down to the recoverable amount. Depreciation is
calculated at the following rates:
Leasehold building improvements
Motor vehicles
Plant and machinery
Office equipment
Over the period of the lease
20% on either cost or written down value
20% - 33% on either cost or written down value
25% on cost
Methods of depreciation, recoverable amounts and useful lives are reviewed and adjusted, if appropriate, at
each balance sheet date. Provision is made against the carrying value of items of property, plant and
equipment where impairment in value is deemed to have occurred.
Leased assets
Leases are classified as operating leases when a significant portion of the risks and rewards of ownership are
retained by the lessor. Rentals payable under operating leases are charged to the income statement on a
straight line basis over the periods of the leases.
Foreign currencies
Transactions in foreign currencies are translated at the exchange rate ruling at the date of each transaction.
Foreign currency monetary assets and liabilities are retranslated using the exchange rates at the balance sheet
date. Gains and losses arising from changes in exchange rates after the date of the transaction are recognised
in the income statement. Non-monetary assets and liabilities that are measured in terms of historical cost in a
foreign currency are translated at the exchange rate at the date of the original transaction.
In the consolidated financial statements, the net assets of the group’s foreign operations are translated at the
rate of exchange at the balance sheet date. Income and expense items are translated at the average rates for
the period where these rates approximate to actual rates. Otherwise actual rates are used. The resulting
exchange differences are charged/ credited to other comprehensive income and recognised in the currency
translation reserve in equity. Such translation differences are recognised in the income statement on the
disposal of the foreign operation. All other currency differences are taken to the income statement. Profit and
losses on holding foreign currency balances are treated as a finance cost.
Derivative financial instruments
The group uses derivative financial instruments to mitigate its exposure to foreign exchange risks arising from
operational, financing and investment activities. In accordance with its treasury policy, the group does not hold
or issue derivative financial instruments for trading purposes.
Holders Technology plc | Annual Report & Accounts 2014 21
FINANCIAL STATEMENTS
Notes to the financial statements (continued)
2. Accounting policies (continued)
Derivative financial instruments are recognised initially at cost. Subsequent to initial recognition, derivative
financial instruments are stated at fair value. The gain or loss on re-measurement to fair value is recognised
immediately in the income statement.
Equity instruments
An equity instrument is any contract that evidences a residual interest in the assets of the group after deducting
all its liabilities. Equity instruments issued by the company are recorded at the proceeds received, net of directly
attributable issue costs.
Taxes
Current tax, including UK corporation tax and foreign tax, is provided at amounts expected to be paid (or
recovered) using the tax rates that have been enacted or substantively enacted by the balance sheet date.
Deferred tax is provided using the balance sheet liability method, providing for temporary differences between
the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for taxation
purposes. Deferred tax is measured using the tax rates that have been enacted or substantively enacted by the
balance sheet date and are expected to apply when the asset is realised or the liability settled.
Provision is not made for deferred tax on the unremitted earnings of foreign subsidiaries where such
remittances are not considered probable as the group’s policy is to reinvest profits to fund growth locally.
Provision is made where it is likely that dividends will be remitted within the foreseeable future.
A deferred tax asset is recognised only when it is probable that suitable taxable profits will be available in the
foreseeable future from which the reversal of the temporary differences can be deducted.
Employee share option scheme
The fair value of employee share plans is calculated using an appropriate actuarial model. In accordance with
IFRS 2 the resulting cost is charged to the income statement over the vesting period of the plans, with a
corresponding credit to retained earnings. The value of the charge is adjusted to reflect the expected and the
actual levels of options vesting. IFRS 2 has been applied to all grants of equity instruments after 7 November
2002 that were unvested as of 1 December 2005, in accordance with the transitional arrangements of IFRS 1.
The proceeds received, net of any directly attributable transaction costs, are credited to share capital and share
premium when the options are exercised.
Pension contributions
The group does not operate a pension scheme. Pension costs relate to group contributions to the personal
pension schemes of certain directors and employees. The contributions are recognised as an employee benefit
expense when they are due. There is also a retirement benefit liability arising from an asset purchase of Cimatec
GmbH as disclosed in note 21. The liability in respect of defined benefit pension plans is the present value of
the defined benefit obligation at the end of the accounting period less the fair value of plan assets, together with
adjustments for past-service costs. The defined benefit obligation is calculated annually by independent
actuaries. Actuarial gains and losses arising from experience adjustments and changes in actuarial assumptions
are charged or credited to equity in other comprehensive income in the period in which they arise
Holders Technology plc | Annual Report & Accounts 2014 22
FINANCIAL STATEMENTS
Notes to the financial statements (continued)
2. Accounting policies (continued)
Dividends payable
Distributions to equity holders are disclosed as a component of the movement in shareholders’ equity. A liability
is recorded for a final dividend when the dividend is approved by the company’s shareholders, and, for an
interim dividend, when the dividend is paid.
Provisions
A provision is recognised in the balance sheet when the group has a present legal or constructive obligation as a
result of a past event, and it is probable that an outflow of economic benefits will be required to settle the
obligation.
Treasury shares
When the company purchases its own equity share capital (treasury shares), the consideration paid, including
any directly attributable incremental costs (net of tax), is deducted from equity attributable to the company’s
equity holders until the shares are cancelled, reissued or disposed of. Where such shares are subsequently sold
or reissued, any consideration received, net of any directly attributable incremental transaction costs and the
related tax effects, is included in equity attributable to the company’s equity holders.
Profit or loss from discontinued operations
A discontinued operation is a component of the Group that either has been disposed of, or is classified as held
for sale, and:
represents a separate major line of business or geographical area of operations or
is part of a single co-ordinated plan to dispose of a separate major line of business or geographical area
of operations or
is a subsidiary acquired exclusively with a view to resale.
Profit or loss from discontinued operations, including prior year components of profit or loss, is presented in a
single amount in the statement of profit or loss. This amount, which comprises the post-tax profit or loss of
discontinued operations and the post-tax gain or loss resulting from the measurement and disposal of assets
classified as held for sale, is further analysed in Note 10.
The disclosures for discontinued operations in the prior year relate to all operations that have been discontinued
by the reporting date of the latest period presented.
3. Critical accounting judgements and key sources of estimation uncertainty
Critical judgement in applying the group’s accounting policies
Income taxes
The determination of the group’s tax liabilities requires the interpretation of tax law. The group obtains
appropriate professional advice from its tax advisors in relation to all significant tax matters. The directors
believe that the judgements made in determining the group’s tax liabilities are reasonable and appropriate;
however, actual experience may differ and materially affect future tax charges.
Estimation uncertainty
Impairment testing
Impairment testing of goodwill involves comparing the carrying value of an asset with its value in use, based
upon a discounted cash flow model. This model involves making assumptions involving future revenues and
profits as well as long-term growth rates and the appropriate discount rate. Further details are set out in note
13.
Holders Technology plc | Annual Report & Accounts 2014 23
FINANCIAL STATEMENTS
Notes to the financial statements (continued)
4. Financial risk management
Treasury management
Group treasury policies are reviewed and approved by the board. The objectives of group treasury policies are
to ensure that adequate financial resources are available for development of the business while at the same
time managing financial risks. Derivative financial instruments are used to reduce financial risk exposures arising
from the group’s business activities and not for speculative purposes.
The group’s treasury activities are managed by the Group Finance Director. The Group Finance Director reports
to the board on the implementation of group treasury policy.
The group’s business activities expose it to a variety of financial risks that include:
Liquidity risk;
•
• Credit risk;
• Cash flow interest rate risk; and
• Currency risk.
The policies for managing these risks are described below:
Liquidity risk
The group finances its operations through a combination of bank borrowings, finance leases and cash generated
from operations. The group’s treasury policy aims to ensure that there are sufficient funds available to meet the
projected cash flow requirements in the business plan.
The group’s principal source of funding is cash generated from operations. Liquidity is maintained through
committed bank credit facilities (note 20).
Credit risk
Credit risk on trade receivables is managed by monitoring the amount and duration of exposures to individual
customers depending on their credit rating. Where possible, trade receivables are insured. The amounts of
trade receivables presented in the balance sheet are net of allowances for doubtful accounts estimated by
management based on prior experience and their assessment of the current economic environment.
The credit risk on liquid funds and derivative financial instruments is limited because the counterparties are high
credit quality financial institutions.
The group has no significant concentration of credit risk, with exposure spread over a large number of customers
and counterparties.
Currency risk
The group is exposed to currency risk through movements in exchange rates on its purchases and sales that are
not denominated in the local functional currencies. The group uses forward foreign exchange contracts to
mitigatee the currency risk associated with these transactions, where material exposure exists. The contracts
are denominated primarily in US dollars and Euros. Such contracts are accounted for in accordance with the
policies set out in note 2. At the year-end forward purchase contracts totalling £1,262,000 were held as
described in note 20.
Holders Technology plc | Annual Report & Accounts 2014 24
FINANCIAL STATEMENTS
Notes to the financial statements (continued)
4. Financial risk management (continued)
Cash flow interest rate risk
The group is exposed to cash flow interest rate risk on bank borrowings, which are arranged at floating rates.
The board monitors the overall level of bank debt and interest costs to limit any adverse effects on the financial
performance of the group. The group does not use interest rate swaps to reduce its exposure to interest rate
fluctuations at the present time.
Fair value estimation
The fair values of cash and cash equivalents, receivables, payables and borrowings with a maturity of less than
one year approximate their book values.
5. Segment reporting
Management currently identifies two operating segments:
PCB, which distributes materials, equipment and supplies to the PCB industry. This includes the following
operations: UK PCB, Germany PCB and India PCB.
LED, which distributes LED-related components, lighting products and lighting solutions. This includes
Holders Components UK and Germany, NRGstar UK, and Opteon Germany.
These operating segments are monitored and strategic decisions are made on the basis of segment operating
results. Segment information can be analysed as follows for the reporting periods under review:
PCB
LED
Other
Total
Revenue
Cost of sales
2014
£’000
11,025
(8,479)
2,546
(333)
(2,182)
Gross profit
Distribution costs
Administrative
expenses
Other operating
income/(expenses)
Segment operating
profit
Other segmental information
93
Depreciation
(Note 14)
Segment assets
Segment liabilities
7,314
(1,841)
45
76
2014
£’000
2013
£’000
2014
£’000
2013
£’000
2014
£’000
2013
£’000
11,011
(8,371)
2,640
(301)
(2,154)
2,453
(1,745)
3,254
(2,427)
708
(81)
(980)
827
(80)
(891)
2013
£’000
14,265
(10,798)
3,467
(381)
(3,049)
-
-
-
-
(4)
13,478
(10,224)
3,254
(414)
(3,234)
56
241
(2)
(355)
(3)
(147)
15
11
37
(357)
68
105
(72)
(6)
(78)
99
7
3
8
8
108
110
9,453
(1,919)
1,488
(2,282)
1,743
(2,297)
(2,782)
2,597
(4,473)
2,542
6,020
(1,526)
6,723
(1,674)
“Other” amounts relate to central group activities, which are not identifiable to the operating segments.
Holders Technology plc | Annual Report & Accounts 2014 25
FINANCIAL STATEMENTS
Notes to the financial statements (continued)
5. Segment reporting (continued)
Analysis of external revenue by geographic region
UK
2014
£’000
2013
£’000
Rest of Europe
2014
£’000
2013
£’000
Asia
2014
£’000
2013
£’000
Total
2014
£’000
2013
£’000
Revenue - PCB
- LED
2,843
1,217
4,060
217
3,253
2,142
5,395
287
8,108
1,234
9,342
413
7,739
1,110
8,849
387
74
2
76
(3)
19
2
21
7
11,025
2,453
13,478
627
11,011
3,254
14,265
681
Non-current assets
External revenue is allocated to regions based on where it originates from.
No customer contributed more than 10% of external revenue.
6. Finance income and expenses
Interest on bank deposits
Interest on loans, overdrafts and pension liability
7. Profit for the year
The following items have been included in arriving at the profit for the year:
Costs of inventories recognised as an expense
Write-down of inventory to net realisable value
Depreciation of property, plant and equipment (note 14)
(Gain)/ loss on sale of property, plant and equipment
Fees payable to the company’s auditors for the audit of the
financial statements
Fees payable to the company’s auditors for other services:
- Audit of the financial statements of the company’s subsidiaries
pursuant to legislation
- Other services relating to taxation
Operating leases - land and buildings
Operating leases - plant and machinery
Exchange (profit)/loss
Exceptional costs consist of the following:
Restructuring costs
2014
£’000
2
(7)
2014
£’000
9,127
118
108
2
12
45
20
136
36
(48)
2014
£’000
67
2013
£’000
4
(12)
2013
£’000
10,234
13
110
1
12
44
24
196
15
(25)
2013
£’000
-
Holders Technology plc | Annual Report & Accounts 2014 26
FINANCIAL STATEMENTS
Notes to the financial statements (continued)
8. Taxation
Analysis of the charge in the period
Current tax
- Current period
- Adjustments in respect of prior periods
Deferred tax (note 22)
Total tax
2014
£’000
(1)
14
13
(2)
11
2013
£’000
30
4
34
(10)
24
Tax reconciliation
The tax for the period is higher (2013: higher) than the standard rate of corporation tax in the UK, effectively
20.00% (2013: 23.67%) for the company’s financial year. The differences are explained below:
Profit/(loss) before taxation
Profit/(loss) before taxation multiplied by the rate of corporation
tax in the UK of 20.00% (2013: 23.67%)
Effects of:
Differences between capital allowances and depreciation
Different overseas tax rates
Adjustments in respect of prior years
Taxation losses
Other temporary differences
Taxation
2014
£’000
(362)
(77)
(3)
2
16
-
73
11
2013
£’000
97
23
(2)
-
-
2
1
24
9. Profit/ (loss) of the parent company for the financial year
The result for the financial year dealt with in the accounts of the parent company was a profit of £79,000 (2013
loss: £358,000).
As permitted by Section 408 of the Companies Act 2006, no separate income statement is presented in respect
of the parent company.
10. Discontinued operations
On 3 January 2014, the Group’s 70% shareholding in Topgrow Technologies Ltd was sold for a cash consideration
of 441,000 Hong Kong dollars. The Topgrow Technologies Ltd disposal has been presented as discontinued
operations in the income statement and the Board are of the view that this presentation of information enables
the users of the financial statements to understand the financial effects of these operations no longer being part
of the Group.
In the cash flow statement, the cash flows of the discontinued business have been aggregated with those of
continuing businesses, but are also shown separately in the note below.
The information presented in this note is presented at the lower of cost and fair value less costs to sell as
prescribed in IFRS 5. As a result of this treatment an impairment charge of £213,000 relating to property, plant
and equipment, inventories and receivables was recognised in the income statement in the year 30 November
2013. This, combined with an operating loss of £56,000, resulted in a loss on discontinued operations of
£269,000 for 2013.
Holders Technology plc | Annual Report & Accounts 2014 27
FINANCIAL STATEMENTS
Notes to the financial statements (continued)
10. Discontinued operations (continued)
The results from discontinued operations which have been included in the income statement are as below:
Revenue
Cost of sales
Gross profit
Distribution costs
Administrative expenses
Other operating costs
Operating loss
Impairment costs
Finance expense
Loss before tax
Taxation on discontinued operations
Loss for the period from discontinued operations
A summary of the cash flows from discontinued operations is shown below:
Operating activities
Investing activities
Total cash flows
11. Earnings per share
2014
£‘000
-
-
-
-
-
-
-
-
-
-
-
-
2014
£‘000
-
-
-
2013
£‘000
990
(714)
276
(26)
(266)
(24)
(40)
(213)
(2)
(255)
(14)
(269)
2013
£‘000
(160)
20
(140)
Basic earnings per share is calculated by dividing the earnings attributable to ordinary shareholders by the
weighted average number of ordinary shares outstanding during the period. The weighted average number of
treasury shares is deducted from the number of shares issued in arriving at the weighted average number of
shares outstanding during the period.
For diluted earnings per share the weighted average number of ordinary shares in issue is adjusted to assume
conversion of all potentially dilutive ordinary shares. Potentially dilutive ordinary shares are those share options
granted to employees where the exercise price is less than the average market price of the company’s ordinary
shares during the period, and where exercise would decrease earnings per share or increase loss per share from
continuing operations. There was no earnings dilution calculated in 2014 as a loss was recorded by the group.
Reconciliations of the earnings and weighted average number of shares used in the calculations are set out
below:
Weighted average number of ordinary shares
Dilutive effect of share options
Fully diluted weighted average number of ordinary shares
2014
Number
3,939,551
-
3,939,551
2013
Number
3,939,551
154,721
4,094,272
Holders Technology plc | Annual Report & Accounts 2014 28
FINANCIAL STATEMENTS
Notes to the financial statements (continued)
11. Earnings per share (continued)
Basic (loss)/ earnings per share:
Continuing operations
Discontinued operations
Total operations
Diluted (loss)/ earnings per share:
Continuing operations
Discontinued operations
Total operations
12. Ordinary dividends
Final dividend for the year ended 30 November 2013 of 1.0p
(year ended 30 November 2012 final dividend: 1.0p)
Interim dividend paid in respect of the year of 1.0p (2013: 1.0p)
Amounts recognised as distributions to equity holders
2014
Pence per share
2013
Pence per share
(9.47)
-
(9.47)
(9.47)
-
(9.47)
2014
£’000
39
40
79
1.85
(6.83)
(4.98)
1.78
(6.83)
(4.98)
2013
£’000
39
39
78
The directors propose a final dividend in respect of the year ended 30 November 2014 of 0.25p per share. If
approved by shareholders, it will be paid on 19 May 2015 to shareholders registered on 29 April 2015.
The directors have recently been made aware that there was a technical breach of the Companies Act in respect
of the Interim dividend paid on 7 October 2014. The management accounts made up to 30 September 2014
showed that the Company had sufficient reserves to pay the dividend; however publicly filed accounts made up
to 30 November 2013 did not do so, as is required by the Companies Act for public companies. A resolution will
be put to the AGM on 24 April 2015 seeking members’ approval to rectify the breach.
13. Goodwill
Group
Cost
At 1 December
Currency translation
At 30 November
Analysis by cash generating unit
PCB
LED
2014
£’000
318
-
318
£’000
146
172
318
2013
£’000
318
2
320
£’000
148
172
320
As permitted by IFRS 1, goodwill arising on acquisitions before 1 December 2005 (date of transition to IFRS) has
been frozen at the UK GAAP amounts subject to being tested for impairment at that date, the results of which
assessment indicated no such impairment.
Under UK GAAP, goodwill of £239,000 arising on acquisitions prior to 1 July 1998 was eliminated directly against
reserves. The gain or loss on the disposal of a previously acquired business reflects the attributable amount of
purchased goodwill in respect of that business. As the group has opted not to restate business combinations
Holders Technology plc | Annual Report & Accounts 2014 29
FINANCIAL STATEMENTS
Notes to the financial statements (continued)
13. Goodwill (continued)
prior to the date of transition, the goodwill written off to reserves under UK GAAP has been frozen and remains
in reserves. Goodwill previously written off to reserves is not written back to the income statement on
subsequent disposal.
The recoverable amount of a cash-generating unit is based on its value-in-use. Value-in-use is the present value
of the projected cash flows of the cash-generating unit (CGU). The key assumptions regarding the value-in-use
calculations are those regarding the discount rates and growth rates. Management estimates discount rates
using pre-tax rates that reflect current market assessments of a number of factors that impact on the time value
of money and any risk specific to the CGU. The rate includes management’s assessment of a normal level of
debt: equity ratio within similar companies in its sector and reflects the risks specific to the relevant business
segment. The group prepares cash flow forecasts based on the most recent financial budgets approved by
management, which cover a two year period. Cash flows for 10 years beyond the budgeted periods are
extrapolated using a growth rate approximating the long term average growth rates for the product sectors
concerned. The growth rates were assessed at 1.5% for Holders Technology Germany (PCB) and 2.5% for
Holders Components UK (LED). The discount rate applied for each CGU was 10.0%.
14. Property, plant and equipment
Group
Motor
vehicles,
plant and
machinery
and office
equipment
£’000
Short
leasehold
land and
buildings
£’000
Cost
At 1 December 2012
Currency translation
Additions
Disposals
At 30 November 2013
Currency translation
Additions
Disposals
At 30 November 2014
Depreciation
At 1 December 2012
Currency translation
Provided in year
Impairment provision
Disposals
At 30 November 2013
Currency translation
Provided in year
Disposals
At 30 November 2014
Net book value
At 30 November 2014
At 30 November 2013
94
-
4
-
98
(6)
-
-
92
94
-
-
-
-
94
(2)
-
-
92
-
4
2,407
36
44
(48)
2,439
(32)
74
(475)
2,006
2,009
36
110
14
(46)
2,123
(27)
108
(472)
1,732
274
316
Total
£’000
2,501
36
48
(48)
2,537
(38)
74
(475)
2,098
2,103
36
110
14
(46)
2,217
(29)
108
(472)
1,824
274
320
Company
Office
equipment
£’000
Total
£’000
50
-
3
-
53
-
-
-
53
29
-
8
-
-
37
-
8
-
45
8
16
50
-
3
-
53
-
-
-
53
29
-
8
-
-
37
-
8
-
45
8
16
Holders Technology plc | Annual Report & Accounts 2014 30
FINANCIAL STATEMENTS
Notes to the financial statements (continued)
15. Investments in subsidiaries
Cost
At 1 December 2012
Impairment provision
Disposal
At 1 December 2013
Disposal
At 30 November 2014
Shares
£’000
917
-
(129)
788
(17)
771
Loans
£’000
1,863
(93)
(250)
1,520
-
1,520
Total
£’000
2,780
(93)
(379)
2,308
(17)
2,291
The following were subsidiary undertakings at the end of the year and have all been included in the consolidated
financial statements.
Name
Holders Technology GmbH Germany
Country of incorporation
and operation
Holders Technology UK
Limited
Holders Components
Limited
Opteon Limited
England and Wales
England and Wales
England and Wales
Dormant
Nature of business
Specialised materials and
components
Specialised materials
and components
Dormant
Interest in ordinary shares
and voting rights
100%
100%
100%
100%
16. Investment in Joint Venture
In April 2007, the company formed a joint venture called Holders Technology (India) Private Limited, based in
Mysore, India to service the Indian market. Holders Technology plc owns 60% of the Joint Venture.
Cost
Investment at 30 November
17. Inventories
Raw materials and consumables
Goods for resale
Company
2014
£’000
15
Group
Company
2014
£’000
1,416
1,326
2,742
2013
£’000
1,470
1,329
2,799
2014
£’000
-
-
-
2013
£’000
15
2013
£’000
-
-
-
Holders Technology plc | Annual Report & Accounts 2014 31
FINANCIAL STATEMENTS
Notes to the financial statements (continued)
18. Trade and other receivables
Trade receivables
Less: provision for impairment
Net trade receivables
Amounts due from group undertakings
Other receivables
Prepayments and accrued income
Group
Company
2014
£’000
1,711
(53)
1,658
-
44
243
1,945
2013
£’000
1,987
(209)
1,778
-
39
110
1,927
2014
£’000
-
-
-
215
20
15
250
2013
£’000
-
-
-
194
17
14
225
All trade receivables that are more than 365 days overdue have been provided for except where monies have
been received after the reporting date. The group also provides for all other specifically identified amounts that
are less than 365 days overdue based on known impairment indicators including known trading difficulties. The
table below shows the movements in the provision for impairment of trade receivables:
Group
Impairment at 1 December
Currency translation
Impairment losses recognised
Amounts written off as irrecoverable
Amounts recovered
Impairment losses reversed
Balance 30 November
Ageing of past due unimpaired debt:
Past due 0-30 days
Past due 31-60 days
Past due 61-90 days
Past due 91-365 days
Past due > 365 days
19. Trade and other payables
Trade payables
Amounts due to group undertakings
Other taxation and social security
Other payables
Accruals
2014
£’000
209
(1)
28
(183)
-
-
53
2014
£’000
601
133
-
10
-
744
Group
Company
2014
£’000
623
-
186
69
379
1,257
2013
£’000
838
-
162
34
379
1,413
2014
£’000
11
515
-
-
36
562
2013
£’000
130
-
129
(25)
(3)
(22)
209
2013
£’000
266
20
24
6
-
316
2013
£’000
24
952
-
-
43
1,019
Holders Technology plc | Annual Report & Accounts 2014 32
FINANCIAL STATEMENTS
Notes to the financial statements (continued)
20. Financial instruments
a) The carrying amount and fair value of financial assets and liabilities at 30 November
Financial assets
Cash and cash equivalents
Trade and other receivables
Loans and receivables
Financial liabilities
Trade and other payables
Financial liabilities at amortised cost
Derivatives
Liabilities at fair value through profit and
loss
Total liabilities
Group
2014
£’000
634
1,702
2,336
1,071
1,071
-
-
1,071
2013
£’000
1,290
1,817
3,107
1,211
1,211
40
40
1,251
Company
2014
£’000
2013
£’000
45
235
280
562
562
-
-
562
480
47
527
67
67
-
-
67
The carrying value of the group’s financial assets and liabilities are considered to approximate their respective
fair values.
b) Interest rate and currency profile of financial assets and liabilities
Currency profiles of the group’s financial assets and liabilities are set out below:
Group
Company
Financial
assets
£’000
1,071
1,047
179
39
2,336
1,112
1,229
572
40
47
107
3,107
Financial
liabilities
£’000
248
598
220
5
1,071
262
506
408
5
25
45
1,251
Net financial
assets /
(liabilities)
£’000
823
449
(41)
34
1,265
850
723
164
35
22
62
1,856
Financial
assets
£’000
39
240
1
-
280
242
432
17
-
-
-
691
Net
financial
assets /
(liabilities)
£’000
(523)
240
1
-
(282)
(777)
432
17
-
-
-
(328)
Financial
liabilities
£’000
562
-
-
-
562
1,019
-
-
-
-
-
1,019
Sterling
Euro
US dollar
Indian rupee
At 30 November 2014
Sterling
Euro
US dollar
Indian rupee
Hong Kong dollar
Renminbi
At 30 November 2013
All the group’s financial assets and liabilities are non-interest bearing or have floating interest rates. There are
no fixed rate financial assets. Floating rate financial assets earn interest at rates based on local bank deposit
rates. Floating rate financial liabilities bear interest at rates based on the Bank of England Base Rate or relevant
national equivalents.
Holders Technology plc | Annual Report & Accounts 2014 33
FINANCIAL STATEMENTS
Notes to the financial statements (continued)
20. Financial instruments (continued)
c) Currency profile of net foreign currency monetary assets and liabilities
The table below shows the net monetary assets/(liabilities) of the group that are not denominated in the
functional currency of the operating unit and which therefore give rise to exchange gains and losses in the
income statement.
Group
Company
Euro
US
dollar
Renminbi
Indian
Rupee
Total
Euro
US
dollar
Total
£’000
£’000
£’000
£’000
£’000
£’000
£’000
£’000
Sterling
At 30 November 2014
Sterling
At 30 November 2013
449
449
723
723
(41)
(41)
164
164
-
-
62
62
34
34
-
-
442
442
949
949
240
240
432
432
1
1
17
17
241
241
449
449
d) Market risk: objectives, policies and strategies
The group’s interest rate risks, liquidity risks and currency risks are managed centrally within policies approved
by the board.
No mitigation of interest rates using interest rate swaps has been undertaken. The net interest receivable for the
year was nil compared to nil receivable last year. No speculative transactions are undertaken. At present there
is no policy to mitigate the group’s currency exposures arising from the profit translation or the effect of
exchange rate movements on the group’s overseas net assets.
e) Market risk: sensitivities
A sensitivity analysis for financial assets and liabilities affected by market risk is set out below. Each risk is
analysed separately and shows the sensitivity of financial assets and liabilities when a certain parameter is
changed. The sensitivity analysis has been performed on balances at 30 November each year and therefore is
not representative of transactions throughout the year. The rates used are based on historical trends and, where
relevant, projected forecasts.
(i) Currencies
The group is exposed to currency risk in relation to the value of its financial assets and liabilities that are
denominated in currencies other than sterling (see note 20(b) above), arising from fluctuations in exchange
rates. The table below shows the impact on the value of the group’s reported net financial assets at 30
November of exchange rates either strengthening or weakening by 10 per cent against sterling and the impact
this would have on the reported profit or loss and equity. The group’s reported profit is not materially impacted
by the effect of changes in exchange rates on the value of its net financial assets, but equity would be £248,000
lower if sterling strengthened by 10 per cent and £248,000 higher if sterling weakened by 10 per cent.
Holders Technology plc | Annual Report & Accounts 2014 34
FINANCIAL STATEMENTS
Notes to the financial statements (continued)
20. Financial instruments (continued)
Group
2014
Net financial
assets/(liabilities)
Effect of sterling strengthening
by 10%
Effect of sterling weakening by
10%
As
reported
Rate
+10%
Profit
Equity
Denominated in sterling
Not denominated in sterling
Net financial assets
£’000
823
442
1,265
£’000
-
(40)
(40)
£’000
-
43
43
£’000
-
(248)
(248)
Rate
-10%
£’000
-
49
49
Profit
Equity
£’000
-
(43)
(43)
£’000
-
248
248
Effect of sterling strengthening by
10%
Effect of sterling weakening by
10%
2013
Net financial assets/(liabilities)
Denominated in sterling
Not denominated in sterling
Net financial assets
As
reported
£’000
850
1,006
1,856
Rate
+10%
£’000
-
(91)
(91)
Profit
£’000
-
8
8
Equity
£’000
-
(324)
(324)
Rate
-10%
£’000
-
112
112
Profit
£’000
-
(8)
(8)
Equity
£’000
-
324
324
Company
2014
Net financial
assets/(liabilities)
Effect of sterling strengthening
by 10%
Effect of sterling weakening by
10%
As
reported
Rate
+10%
Profit
Equity
Rate
-10%
Profit
Equity
£’000
£’000
£’000
£’000
£’000
£’000
£’000
Denominated in sterling
Not denominated in sterling
Net financial assets
(8)
241
233
-
(22)
(22)
-
(22)
(22)
-
-
-
-
27
27
-
27
27
-
-
Effect of sterling strengthening by
Effect of sterling weakening by
2013
Net financial assets/(liabilities)
Denominated in sterling
Not denominated in sterling
Net financial assets
As
reported
£’000
(777)
449
(328)
Rate
+10%
£’000
-
(41)
(41)
10%
Profit
£’000
-
(41)
(41)
Equity
£’000
-
-
-
Rate
-10%
£’000
-
50
50
10%
Profit
£’000
-
50
50
Equity
£’000
-
-
-
Holders Technology plc | Annual Report & Accounts 2014 35
FINANCIAL STATEMENTS
Notes to the financial statements (continued)
20. Financial instruments (continued)
(ii) Interest rates
Changes in market interest rates expose the group to the risk of fluctuations in the cash flow relating to its
financial assets and liabilities that attract interest at floating rates (see note 20(b)). Based upon the interest rate
profile of the group’s financial assets and liabilities as at both 30 November 2014 and 30 November 2013, there
would be no material impact of a one percentage point change in the market interest rates on the group’s profit
and equity.
f) Liquidity risk
The group monitors its liquidity to maintain a sufficient level of undrawn debt facilities together with central
management of the group’s cash resources to minimise liquidity risk. All the trade and other payables at 30
November 2014 amounting to £1,071,000 (2013: £1,251,000) are payable within three months.
Borrowing facilities
The group has various borrowing facilities available to it. The unutilised portion of the facilities at 30 November
2014 amounted to £150,000 (2013: £250,000).
g) Credit risk
Group policies are aimed at minimising losses due to customer payment default. Deferred payment terms are
only granted to those customers who satisfy creditworthiness criteria and individual exposures to customers are
monitored. Where possible, operations purchase credit insurance.
The maximum exposure to credit risk for trade and other receivables at the reporting date by geographic region
is as follows:
UK
Rest of Europe
Asia
At 30 November
Group
Company
2014
£’000
954
730
18
1,702
2013
£’000
939
720
158
1,817
2014
£’000
235
-
-
235
2013
£’000
67
-
-
67
Holders Technology plc | Annual Report & Accounts 2014 36
FINANCIAL STATEMENTS
Notes to the financial statements (continued)
20. Financial instruments (continued)
h) Capital risk
The group’s primary objective is to ensure its continued ability to provide a consistent return for its equity
shareholders through a combination of capital growth and proposed dividend policy. It aims to minimise any
capital risk by maintaining a conservative financing structure. The board’s current policy is to use the group’s
cash resources for any capital requirements and, where necessary, by adjustment to the amount of dividends
paid to shareholders.
i) Exchange rate instruments
The group held forward exchange contracts with a contracted value of £1,262,000 at 30 November 2014 (2013:
£856,000). When appropriate during the year, contracts were taken out to mitigate trade payables
denominated in foreign currencies. The fair value of these instruments was a £31,000 asset.
21. Retirement benefit liability
Group
At 1 December 2012
Currency translation
Charged to the income statement
Utilised
At 1 December 2013
Currency translation
Change in actuarial assumptions
Utilised
At 30 November 2014
Retirement benefit liability
£’000
199
15
-
(9)
205
4
4
(12)
201
The retirement benefit liability arose from the 2002 acquisition of assets by Holders Technology GmbH from
Cimatec GmbH. Following the bankruptcy of Cimatec GmbH, a German court determined that Cimatec’s pension
obligation to one former Cimatec employee must be met by Holders Technology GmbH. The provision
represents the estimated net present value of the liability to pay an annuity to that employee upon retirement,
which began in 2008. No other Holders Technology employees have any retirement benefit rights from their
previous employment at Cimatec.
Holders Technology plc | Annual Report & Accounts 2014 37
FINANCIAL STATEMENTS
Notes to the financial statements (continued)
22. Deferred tax
Deferred tax is calculated in full on temporary differences under the liability method using tax rates of 20.00% to
30% (2013: 23.67% to 30%).
The movement on the deferred tax asset account is as shown below:
At 1 December – deferred tax assets
Income statement credit/(charge)
Transfer to deferred tax liabilities
At 30 November
Group
Company
2014
£’000
19
(4)
-
15
2013
£’000
9
10
-
19
2014
£’000
-
-
-
-
2013
£’000
-
-
-
-
The movements in deferred tax assets and liabilities (prior to the offsetting of balances within the same
jurisdiction as permitted by IAS 12) during the period are shown below:
Deferred tax assets
Group
At 1 December 2012
(Charged)/credited to income statement
Transfer to deferred tax liabilities
At 30 November 2013
(Charged)/credited to income statement
Transfer to deferred tax liabilities
At 30 November 2014
Accelerated
capital
allowances
£’000
-
-
-
-
-
-
-
Pension
liability
£’000
41
-
-
41
(6)
-
35
Total
£’000
41
-
-
41
(6)
-
35
At the year end the amount of temporary differences associated with the undistributed earnings of overseas
subsidiaries for which deferred tax liabilities had not been recognised was insignificant.
Deferred tax assets are only recognised where in the Directors’ opinion there is a reasonable expectation of the
tax asset being realised. Assets are recognised based on business forecasts and the local tax environment.
Holders Technology plc | Annual Report & Accounts 2014 38
FINANCIAL STATEMENTS
Notes to the financial statements (continued)
22. Deferred tax (continued)
Deferred tax liabilities
Group
At 1 December 2012
Transfer from income statement
Transfer from deferred tax assets
At 30 November 2013
Transfer from income statement
Transfer from deferred tax assets
At 30 November 2014
Deferred tax liabilities
Company
At 1 December 2012
Credited to income statement
At 30 November 2013
Charged to income statement
At 30 November 2014
The Company had no deferred tax assets.
23. Share Capital
Accelerated
capital
allowances
£’000
32
(10)
-
22
(2)
-
20
Accelerated
capital
allowances
£’000
5
(2)
3
(2)
1
Authorised
6,000,000 ordinary shares of 10p each (2013: 6,000,000)
Allotted and fully paid ordinary shares of 10p each
At 30 November 2013 and 30 November 2014
2014
£’000
600
2013
£’000
600
Number
of shares
Number
of shares
4,159,551
4,159,551
220,000 (2013: 220,000) 10p ordinary shares with an aggregate nominal value of £22,000 (2013: £22,000) are
held in treasury and are available for issue upon the exercise of options under the company’s employee share
option scheme.
Holders Technology plc | Annual Report & Accounts 2014 39
FINANCIAL STATEMENTS
Notes to the financial statements (continued)
24. Employees and staff costs
Group
Company
Wages and salaries
Social security costs
Other pension costs
Share based payments
2014
£’000
2,206
315
70
9
2,600
2013
£’000
2,112
290
48
9
2,459
Average monthly number of permanent employees, including executive directors:
Group
Administration and sales
Service and fabrication
Part-time
2014
£’000
350
31
44
9
434
2014
Number
41
36
77
7
84
2013
£’000
340
26
29
9
404
2013
Number
51
44
95
3
98
Directors’ remuneration
Directors’ remuneration for the year was as follows:
Company
Basic salary fees, bonuses
and expenses
R W Weinreich (Chairman)
V M Blaisdell
D A Mahony
P Geraghty
£’000
25
100
26
94
245
Benefits in
kind
£’000
4
-
-
1
5
Total emoluments
2013
£’000
18
87
23
87
215
2014
£’000
29
100
26
95
250
Pension entitlement
Directors are entitled to receive their remuneration either as salary or as pension contributions.
Pension contributions to directors’ personal pension schemes are as follows:
Pension Contributions
V M Blaisdell
P K I Geraghty
2014
£’000
23
9
32
2013
£’000
21
9
30
Holders Technology plc | Annual Report & Accounts 2014 40
FINANCIAL STATEMENTS
Notes to the financial statements (continued)
24. Employees and staff costs (continued)
Directors’ shareholdings
The shareholdings of those serving at the end of the year were as follows:
R W Weinreich
D A Mahony
V M Blaisdell
Ordinary shares
2014
1,851,202
20,000
34,102
2013
1,851,202
20,000
34,102
The shareholdings are all beneficial and have not changed between 30 November 2014 and 5 February 2015.
Directors’ interests in share options
At start of year
or on date of
appointment
12,500
12,500
25,000
46,598
38,444
47,000
37,500
No. of options
granted /
(exercised)
during year
-
-
-
-
-
-
-
V M Blaisdell
V M Blaisdell
V M Blaisdell
V M Blaisdell
P K Geraghty
V M Blaisdell
P K Geraghty
At end of year
Exercise price
12,500
12,500
25,000
46,598
38,444
47,000
37,500
68.5p
93.5p
123.18p
10.0p
10.0p
10.0p
10.0p
Date from
which
exercisable
28/07/12
28/05/13
21/07/14
26/03/15
26/03/15
02/05/16
02/05/16
Expiry date
27/07/15
27/05/16
21/07/17
26/03/16
26/03/16
02/05/17
02/05/17
The share price at 30 November 2014 was 41.50p (2013: 62.00p) whilst during the year the high and low prices
were 64.00p and 35.00p.
In respect of the options first exercisable up to 21 July 2014, no option may be exercised unless there is (as
shown by the audited accounts) an increase in the fully diluted earnings per share for the financial year
immediately prior to the date of exercise compared with the highest earnings per share figure for the three
preceding years unless the board in its absolute discretion decides otherwise.
For options first exercisable on 26 March 2015, no option may be exercised unless the share price exceeds 70.0p
after 3 years. For options first exercisable on 2 May 2016, no option may be exercised unless the share price
exceeds 127.0p after 3 years.
Key management compensation
Group
Short-term employee benefits
Post-employment benefits
Termination benefits
Share-based payments
Key management includes Directors and senior executives.
2014
£’000
611
46
-
9
666
2013
£’000
512
30
-
9
551
Holders Technology plc | Annual Report & Accounts 2014 41
FINANCIAL STATEMENTS
Notes to the financial statements (continued)
24. Employees and staff costs (continued)
Total share options in issue
Total options in issue 1 December 2013
Issued during year
Lapsed
Forfeited
Leavers
Total options in issue 30 November 2014
2014
No
349,203
17,500
(15,000)
-
-
351,703
2013
No
264,703
84,500
-
-
-
349,203
At the year-end 70,000 share options were exercisable and 281,703 share options were outstanding.
25. Financial commitments
Capital commitments
There were no capital expenditure commitments at 30 November 2014 (2013: nil).
Operating lease commitments
The group leases various offices and warehouses under non-cancellable operating lease agreements. The lease
terms are between 1 and 5 years. The majority of lease agreements are renewable at the end of the lease period
at market rate. Total aggregate minimum lease payments under non-cancellable operating leases were:
Land and buildings
- No later than one year
- Later than one year and no later than five years
- Later than 5 years
Motor vehicles, plant and machinery
- No later than one year
- Later than one year and no later than five years
Other equipment
- No later than one year
- Later than one year and no later than five years
26. Share based payments
2014
£’000
2013
£’000
197
36
-
26
31
-
-
228
586
280
19
4
-
-
The Company operates a share option scheme under which options are exercisable at a price equal to the
average quotation of a share as derived from the AIM appendix of the Daily Official List of the London Stock
Exchange for the five dealing days immediately preceding the date of grant, subject to relevant performance
criteria, as described in note 24, being satisfied. The normal minimum vesting period is three years.
Options to subscribe for ordinary shares of 10p each are as follows:
Subscription
Price
116.5
68.5p
93.5p
123.18p
117.15p
70.0p
63.8p
14 March 2012 to 13 March 2014
28 July 2012 to 27 July 2015
28 May 2013 to 27 May 2016
21 July 2014 to 20 July 2017
26 Mar 2015 to 25 Mar 2016
2 May 2016 to 1 May 2017
28 March 2017 to 27 March 2018
2013
15,000
32,500
12,500
25,000
179,703
84,500
-
2014
-
32,500
12,500
25,000
179,703
84,500
17,500
Dates when exercisable
Number of shares
Holders Technology plc | Annual Report & Accounts 2014 42
FINANCIAL STATEMENTS
Notes to the financial statements (continued)
26. Share based payments (continued)
The estimated fair values were calculated using the option pricing model with the following inputs:
Grant date
Share price at date of grant
Exercise price
No. of employees
Shares under option
Vesting period (years)
Expected volatility
Option life (years)
Expected life (years)
Risk free rates
Expected dividends
Possibility of ceasing employment before vesting
Expectations of meeting performance criteria
Fair value of option
28 March
2014
58.00
63.80
1
17,500
3
22%
3
3.5
0.62%
4.0%
27.0%
75%
7p
2 May
2013
70.00
77.00
2
84,500
3
22%
3
3.5
1.03%
4.8%
25.0%
75%
13p
26 March
2012
106.50
117.15
8
179,703
3
22%
1
3.5
0.76%
4.0%
11.0%
75%
13p
21 July
2011
123.18
135.50
1
25,000
3
22%
3
3.5
1.03%
4.8%
25.0%
75%
13p
The expected volatility is based on historical volatility over the expected life period. The expected life is the
average expected period to exercise based on historical experience and the terms of the scheme. The risk free
return is the yield on zero-coupon UK government bonds of a term consistent with the assumed option life.
The group recognised a total cost of £9,000 (2013: £9,000) related to equity-settled share-based payment
transactions during the year.
27. Related party transactions
Group
Transactions between the company and its subsidiaries, which are related parties, have been eliminated on
consolidation and are not disclosed.
Dividends were paid to directors as follows:
R W Weinreich
D A Mahony
V M Blaisdell
2014
£’000
37
1
1
39
Company
The company carried out the following transactions with its subsidiaries and joint venture:
Consultancy fees charged to subsidiaries and joint venture
Interest on short term loans
2014
£’000
515
13
2013
£’000
37
1
1
39
2013
£’000
441
13
Holders Technology plc | Annual Report & Accounts 2014 43
AGM
Notice of annual general meeting
Notice is hereby given that the Annual General Meeting of Holders Technology plc (the "Company") will be held at
Elstree House, Elstree Way, Borehamwood, Hertfordshire WD6 1SD on 24 April 2015 at 11.30 a.m. for the following
purposes:
Ordinary business
1.
2.
3.
4.
To receive and adopt the accounts of the Company together with the directors’ and auditors’ reports
thereon for the year ended 30 November 2014.
To declare a final dividend in respect of the year ended 30 November 2014.
To re-elect P Geraghty as a director.
To re-appoint Grant Thornton UK LLP as auditors and to authorise the directors to fix their remuneration.
Special business
To consider and, if thought fit, pass the following resolution as an Ordinary Resolution:
5.
That, in substitution for any equivalent authorities and powers granted to the directors prior to the passing
of this resolution, the directors be and they are generally and unconditionally authorised pursuant to Section
551 of the Act to exercise all powers of the Company to allot shares in the Company, and grant rights to
subscribe for or to convert any security into shares of the Company (such shares, and rights to subscribe for
or to convert any security into shares of the Company being "relevant securities") up to an aggregate
nominal amount of £138,651.70, provided that, unless previously revoked, varied or extended, this authority
shall expire on the conclusion of the Annual General Meeting of the Company to be held in 2016, except that
the Company may at any time before such expiry make an offer or agreement which would or might require
relevant securities to be allotted after such expiry and the directors may allot relevant securities in
pursuance of such an offer or agreement as if this authority had not expired.
To consider and, if thought fit, pass the following resolutions as Special Resolutions:
6.
That the directors be and they are empowered pursuant to Section 570(1) of the Act to allot equity securities
(as defined in Section 560(1) of the Act) of the Company wholly for cash pursuant to the authority of the
directors under Section 551 of the Act conferred by resolution 6 above, and/or by way of a sale of treasury
shares (by virtue of Section 573 of the Act), in each case as if Section 561(1) of the Act did not apply to such
allotment, provided that:
(a)
the power conferred by this resolution shall be limited to:
(i)
the allotment of equity securities in connection with an offer of equity securities to the
holders of ordinary shares in the capital of the Company in proportion as nearly as
practicable to their respective holdings of such shares, but subject to such exclusions or
other arrangements as the directors may deem necessary or expedient to deal with
fractional entitlements or legal or practical problems arising under the laws or requirements
of any overseas territory or by virtue of shares being represented by depository receipts or
the requirements of any regulatory body or stock exchange or any other matter whatsoever;
and
Holders Technology plc | Annual Report & Accounts 2014 44
AGM
Notice of annual general meeting (continued)
(ii)
the allotment, otherwise than pursuant to sub-paragraph (i) above, of equity securities up to
an aggregate nominal value equal to £20,797.80; and
(b)
unless previously revoked, varied or extended, this power shall expire on the conclusion of the
Annual General Meeting of the Company to be held in 2016 except that the Company may before
the expiry of this power make an offer or agreement which would or might require equity securities
to be allotted after such expiry and the directors may allot equity securities in pursuance of such an
offer or agreement as if this power had not expired.
7.
That the Company be and it is hereby generally and unconditionally authorised to make market purchases
(within the meaning of Section 693(4) of the Act) of Ordinary Shares of 10p each in the capital of the
Company (“Ordinary Shares”) provided that:
(a)
the maximum number of Ordinary Shares hereby authorised to be purchased is 393,955
(representing 10 per cent of the issued share capital of the Company, excluding treasury shares);
(b)
the minimum price which may be paid for each Ordinary Share is 10p (nominal value);
(c)
(d)
(e)
the maximum price which may be paid for each ordinary share is an amount equal to 105 per cent of
the average of the middle market quotations for an ordinary share as derived from The London Stock
Exchange for the five business days immediately preceding the day on which the Ordinary Shares are
purchased;
the authority hereby conferred shall expire at the conclusion of the next Annual General Meeting of
the Company to be held in 2016, unless such authority is renewed prior to such time; and
the Company may make a contract to purchase its ordinary shares under the authority hereby
conferred prior to the expiry of such authority, which will or may be executed wholly or partially
after the expiry of such authority, and may purchase its Ordinary Shares in pursuance of any such
contract.
8.
That in respect of the interim dividend paid on 7 October 2014 (the “Dividend”):
(a)
payment of the Dividend is hereby ratified and confirmed;
(b)
any and all claims which the Company may have in respect of the Dividend against its shareholders
who appeared on the relevant record date of 12 September 2014 be released, and a deed of release
in favour of such shareholders be entered into by the Company in the form of the deed produced to
the meeting and signed by the Chairman for the purposes of identification and thereafter be
retained by the company on behalf of said shareholders;
(c)
any distribution involved in the giving of the release in relation to the Dividend be made out of the
profits available to the final dividend by reference to the record date of 12 September 2014; and
(d)
any and all claims which the Company may have against its Directors (whether past, present and
future) arising in connection with the Dividend be released and a deed of release in favour of such
Directors be entered into by the Company in the form of the deed produced to the meeting and
signed by the Chairman for the purposes of identification and thereafter be retained by the Company
Secretary on behalf of said shareholders
Holders Technology plc | Annual Report & Accounts 2014 45
AGM
Notice of annual general meeting (continued)
By order of the board
Paul Geraghty
Secretary
5 February 2015
Registered Office:
Elstree House, Elstree Way, Borehamwood, Hertfordshire WD61SD
Notes
1.
2.
3.
4.
5.
6.
A member who is entitled to attend, speak and vote may appoint a proxy to attend, speak and vote instead
of him.
A proxy need not also be a member of the Company but must attend the meeting in order to represent his
appointer. A member may appoint more than one proxy provided each proxy is appointed to exercise rights
attached to different shares (so a member must have more than one share to be able to appoint more than
one proxy). A form of proxy will shortly be sent to all members. The notes to the form of proxy include
instructions on how to appoint the Chairman of the meeting or another person as proxy. To be effective,
forms of proxy must be duly completed and returned so as to reach Neville Registrars, New Issue
Department, Neville House, 18 Laurel Lane, Halesowen, West Midlands, B63 3DA not less than 48 hours
before the time appointed for the meeting, or adjourned meeting, as the case may be.
Only those shareholders registered in the register of members of the Company as at 6 p.m. on Wednesday
22 April 2015 shall be entitled to attend and vote at the meeting in respect of the number of shares
registered in their name at that time. Changes to entries on the relevant register of securities after 6 p.m. on
Wednesday 22 April 2015 shall be disregarded in determining the rights of any person to attend and vote at
the meeting.
As at 4 February 2015 (being the latest practicable date prior to the publication of this notice of annual
general meeting) the Company’s issued share capital consists of 4,159,551 ordinary shares carrying one vote
each. There are currently 220,000 ordinary shares held in treasury which currently do not carry the right to
vote. Therefore the total voting rights in the Company as at 4 February 2015 are 3,939,551.
To appoint a proxy or to amend an instruction to a previously appointed proxy via the CREST system, the
CREST message must be received by the issuer's agent (ID 7RA11) by 11.30 a.m. on Wednesday 22 April
2015. For this purpose, the time of receipt will be taken to be the time (as determined by the timestamp
applied to the message by the CREST Applications Host) from which the issuer's agent is able to retrieve the
message. After this time any change of instructions to a proxy appointed through CREST should be
communicated to the proxy by other means. CREST should be communicated to the proxy by other means.
CREST Personal Members or other CREST sponsor or voting service provider(s) should contact their CREST
sponsor or voting service provider(s) for assistance with appointing proxies via CREST. For further
information on CREST procedures, limitations and system timings, please refer to the CREST Manual. We
may treat as invalid a proxy appointment sent by CREST in the circumstances set out in Regulation 35(5)(a)
of the Uncertificated Securities Regulations 2001.
The following documents are available for inspection at the registered office of the Company during the
usual business hours on any weekday (Saturday, Sunday or public holidays excluded) from the date of this
notice until the conclusion of the annual general meeting and will also be available for inspection at the
place of the meeting from 11.15 a.m. on the day of the meeting until its conclusion:
copies of the executive directors' service contracts with the Company and any of its subsidiary
undertakings and letters of appointment of the non-executive directors.
Holders Technology plc | Annual Report & Accounts 2014 46
AGM
Five year summary
Group revenue - continuing
Group revenue – discontinued
Gross profit
Distribution costs
Administrative expenses
Exceptional items
Other operating income/(expense)
Group operating profit/ (loss)
Finance income
Finance expenses
2014
2013
£’000
13,478
3,254
(414)
(3,167)
(67)
37
(357)
2
(7)
£’000
14,265
990
3,467
(381)
(3,049)
-
68
105
4
(12)
2012
Restated
£’000
13,631
1,974
2011
2010
£'000
19,636
£'000
16,314
3,584
(376)
(3,275)
-
11
4,509
(404)
(3,828)
-
98
4,198
(390)
(3,273)
(83)
39
(56)
1
(13)
375
-
(12)
491
-
(1)
Profit before taxation
(362)
97
(68)
363
490
Taxation
(11)
(24)
(43)
(123)
(59)
Profit after tax
(373)
73
(111)
240
431
Earnings per share – continuing
business
Earnings per share – basic
Earnings per share - diluted
Dividends per share in respect of
each year
Equity attributable to shareholders of
the parent
(9.47p)
(9.47p)
1.85p
1.78p
(2.82p)
(2.82p)
6.70p
6.63p
12.87p
12.87p
1.25p
2.0p
2.0p
5.35p
5.35p
4,494
5,053
5,192
5,941
5,841
Holders Technology plc | Annual Report & Accounts 2014 47