Holders Technology plc
Annual Report & Accounts 2018
Specialised PCB Materials, LED Components and Smart Lighting
Holders Technology plc | Annual Report & Accounts 2018
Year in Brief
Holders Technology supplies specialty laminates and materials for printed circuit board manufacture (“PCB”)
and operates as an LED solutions provider to the lighting market.
The Group made further progress during the year, with overall revenue growth and improved profitability.
The Group comprises two PCB divisions based in the UK and Germany, and two LED divisions also based in
the UK and Germany. In the opinion of the directors, all divisions made satisfactory progress during the year.
The directors will recommend payment of a final dividend of 0.50p per share, a total of 0.75p for the year
(2017 total: 0.50p).
The results are summarised below.
Holders Technology plc | Annual Report & Accounts 2018
STRATEGIC REPORT
Page
Chairman’s statement
Operating and business review
Financial review
BOARD REPORTS
Company information
Report of the directors
Directors’ remuneration report
Corporate governance
AUDITOR’S REPORT
Independent auditor’s report to the members of Holders Technology plc
FINANCIAL STATEMENTS
Group income statement
Group 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
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Holders Technology plc | Annual Report & Accounts 2018
STRATEGIC REPORT
Chairman’s Statement
Given our continuing commitment to achieving
satisfactory levels of profitability I am pleased to be
able to report that the Group has made further
progress over the year. Group revenue for the year
was £12.5m (2017: £12.2m), with gross margins of
26.2% (2017: 26.3%). The operating profit for the year
from continuing operations was £184,000 (2017:
operating profit of £65,000), and the profit after tax
from continuing operations was £169,000 (2017: profit
£59,000).
The Group comprises two PCB divisions, based in the
UK and Germany, and two LED divisions, also based in
the UK and Germany.
The PCB divisions together had revenue of £9.4m
(2017: £9.5m) and achieved an operating profit of
£280,000 (2017: profit £214,000). Margins reduced
from 24.2% to 23.5%.
Our German PCB operations, the largest single element
of the Group, achieved similar revenue to 2017, but
improved operating profit therefrom. Investments
were made in machinery and improved systems during
the year, and in Q1 2019 an upgraded aluminium coil
cutting machine will be installed in our Germany
premises. This investment will enable both further
efficiency improvements and will increase capacity.
UK PCB operations achieved satisfactory revenue in the
year despite a lower level of market demand than
2017.
LED revenues overall amounted to £3.1m (2017:
£2.8m) with gross margins increasing from 33.4% to
34.1% and operating losses reducing from £92,000 in
2017 to £13,000 in 2018. The product range continues
to develop with smart lighting controls a key focus for
the future. Both divisions were profitable in the
second half of the year.
The Cross-Border Corporation Tax liability reported in
2015 is nearing settlement: £88,000 was paid during
2018 which leaves a potential liability of up to £43,000
remaining which has been fully provided for.
We believe the Group is well positioned to deliver
further
in the current year but
recognise that the market conditions that we face
remain unpredictable.
improvements
On behalf of the Board I would like to record our thanks
to all of our staff for their hard work during 2018 which
resulted in a profitable year for the Group. Given the
improved results, the Board considers it appropriate to
recommend an increased final dividend of 0.50p in
respect of the 2018 year.
R W Weinreich
Executive Chairman
21 February 2019
Holders Technology plc | Annual Report & Accounts 2018
1
STRATEGIC REPORT
Operating and Business Review
Corporate strategy
The board seeks to enhance shareholder value over the
medium to long term. Our strategy to achieve this is to
focus resources on business activities which can
generate profitable and sustainable growth.
In doing so, we ensure that risk is carefully managed,
and that high standards of corporate governance and
transparency are maintained.
Where a suitable
investment opportunity is identified, we invest within
the bounds of internally generated cash flow and bank
facilities.
Business strategy
Holders Technology plc (“Holders”) has operated for
many years as a distributor of specialised and
consumable materials to the PCB industry in the UK
and continental Europe. The European PCB industry
has strengths in the defence, aerospace, automotive
and medical sectors.
Holders continues to pursue a 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 and smart control solutions provider to the lighting
market. The product offering ranges from distribution
of a full range of LED components, to supporting our
customers with the design and assembly of light
engines and integration of smart control lighting
solutions.
Our LED strategy is to provide a competitive and
complementary premium product range for our
selected markets, supported by strong technical
support and industry knowledge. In addition, Holders
provides bespoke solutions
fulfil customer
requirements.
to
Overall, PCB operations provide a steady profitable
revenue stream, and LED operations offer the
opportunity for higher growth/ higher margin returns.
In combination they also allow certain efficiency gains.
Market Overview
The first half of 2018 saw stability for the European PCB
manufacturers. However, the second half saw weaker
revenue. This was caused by global component
shortages, and the slowdown in the automotive
industry caused by additional emissions testing
requirements.
With the acceptance of LEDs in the marketplace and an
understanding of the energy saving benefits, the
market has moved to developing solutions for Smart
Lighting and incorporating lighting within the ‘Internet
of Things’. Holders is well placed in offering solutions
which incorporate this smart, wireless technology and
is working with key suppliers in this sector.
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. During the
year the division benefitted from a wider product
range, and improved product availability.
Continental Europe
The German PCB industry is dominated by demand
from the automotive and industrial sectors. In 2018,
further
in machinery and systems
continued, and the PCB product offering was extended.
We have seen more business uncertainty at the start of
2019 due to the overall economic environment and the
continuing challenges in the automotive industry.
investment
LED & Lighting solutions
UK
Holders Components UK specialises in providing LED
solutions to original equipment manufacturers (OEMs)
in the general lighting market. During 2018, the
division benefited from an extended product range and
a strengthened sales team.
Sales for the first half of 2018 were below expectations,
however marked progress was made in the second half
with good growth and profitability. The division has
seen strong interest in smart lighting control solutions
during the first quarter of 2019.
Holders Technology plc | Annual Report & Accounts 2018
2
STRATEGIC REPORT
Operating and Business Review
(continued)
Continental Europe
Holders Components Germany specialises in providing
LED solutions to customers in continental Europe. The
division also had a slower start in 2018 but saw
improving sales and profitability in the second half.
The division enters 2019 with a strong order book in
smart lighting control solutions, as well as customised
components.
Conclusion
We have made good progress in 2018 across all four
divisions, investing in new products, equipment, and
strong technical sales people, as well as focussing on
improving our processes to become more efficient. We
look forward to achieving further progress in 2019.
Victoria Blaisdell
Group Managing Director
21 February 2019
Holders Technology plc | Annual Report & Accounts 2018
3
STRATEGIC REPORT
Financial Review
Key performance indicators
The board believes that the following key performance
indicators are of most significance to assessment of the
Group’s performance and financial position:
• Revenue
The turnover level is an 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.
• Liquidity
The Group operates in a cyclical industry and the
directors have consistently adopted a conservative
approach to financing the Group’s activities. The key
measure is net liquid funds, which is described in
more detail below.
• Efficiency
Production efficiency is important in a competitive
PCB market.
Revenue
Group revenue from continuing operations increased
from £12.2m to £12.5m.
Overall PCB revenue
decreased by 0.8%, and LED revenue increased by
13.0%.
Profitability
The result
from continuing operations was an
operating profit of £184,000 compared to an operating
profit of £65,000 in 2017. The gross profit margin was
26.2% compared to 26.3% in 2017. Administration
costs as a proportion of revenue decreased from 22.1%
in 2017 to 21.6% in 2018.
Taxation
The Group has a potential UK tax liability in respect of
EU Cross Border Group Relief claims relating to its
former Swedish and Dutch operations. During 2018,
£88,000 was paid against this liability, which leaves a
remaining liability of up to £43,000.
The full liability was provided for in the 2018 accounts,
although the board believes a lower amount may be
payable when the final settlement is agreed.
Post tax result
The profit for the financial year after tax, attributable
to equity shareholders was £169,000 (2017: profit of
£17,000). The basic earnings per share was 4.06p
(2017: 1.42p per share) and the fully diluted profit per
share was 4.03p (2017: 1.34p).
Dividends
The board proposes a final dividend of 0.50p per share
to be paid on 21 May 2019 to shareholders on the
register on 3 May 2019. Including the 0.25p interim
dividend already paid on 9 October 2018 the total
dividend for 2018 would be 0.75p (2017: 0.50p).
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 limits. Credit insurance
is used for UK and European customers whenever it
is economically available.
• 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.
• EU Withdrawal Agreement
The Group has insignificant revenue arising from
sales between the UK and mainland EU, and
therefore the Board does not anticipate a significant
impact on revenue arising from the EU Withdrawal
process. In the event of a “No-Deal” outcome,
however, the Group would potentially face additional
WTO duties of c. £30,000 on purchases from the EU
into the UK.
Holders Technology plc | Annual Report & Accounts 2018
4
STRATEGIC REPORT
Financial Review (continued)
Cash flow, liquidity and financing
The Group’s cash position has remained satisfactory
during the year. Cash balances reduced from £579,000
to £403,000.
In the second half of the 2018, the German PCB division
began stockpiling aluminium sheets and panels to
ensure continuity of supply to customers whilst the
upgraded coil machine is installed in Q1 2019. The
value of this additional stock is c. £380,000, most of
which is expected to be sold and thereby converted to
cash during 2019. Group inventory increased by
£450,000 over the year, most of which increase is
caused by this additional aluminium stock plus overall
volume growth.
Given the need to finance this increased stockholding
and the £88,000 tax payment reported above, cash
balances have remained satisfactory.
The Group maintains overdraft and trade financing
facilities with its banks to meet short term financing
requirements during the year. An overdraft facility of
£300,000 is in place, however this has not been needed
nor used during the period under review. The trade
financing facility is used for occasional letters of credit
and duty deferment.
At 30 November 2018 the Group had net liquid funds
(trade and other receivables plus cash minus current
liabilities) of £0.8m (2017: £1.2m). Net assets per
ordinary share at 30 November 2018 were £0.99
compared with £0.95 in 2017.
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.
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 if
necessary.
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
predominantly in the European Union. 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 £605,000 were held as detailed in
note 19.
Unlike previous years, the key sterling/ Euro exchange
rate has remained relatively stable at around 1.13 up
to the financial year end.
Net assets
Net assets at the 2018 year-end were £4,099,000
(2017: £3,932,000). In addition to the net profit of
£169,000, the Group benefited from £15,000 of
exchange differences
foreign
operations.
from Euro-based
Conclusion
The Group continues to operate a conservative
financial policy, which leaves it well placed to benefit
from future growth opportunities.
Paul Geraghty
Group Finance Director
21 February 2019
STRATEGIC REPORT
The Strategic Report on pages 1-5 was approved by the
Board on 21 February 2019 and signed on its behalf by
Paul Geraghty
Group Finance Director
21 February 2019
Holders Technology plc | Annual Report & Accounts 2018
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
T G Bray MEng, Executive Director
D A Mahony, BA (Econ), MSc, Non-Executive Director
Secretary
P K I Geraghty BSc, FCA
Registered office
27-28 Eastcastle Street
London W1W 8DH
Website
www.holderstechnology.com
Registered number
1730535
Auditors
Bankers
Registrars
Grant Thornton UK LLP
Victoria House
199 Avebury Boulevard
Milton Keynes MK9 1AU
HSBC
North London Corporate Centre
1 Old Street
London EC1V 9HL
Neville Registrars
Neville House
Steelpark Road
Halesowen
West Midlands B62 8HD
Nominated Adviser and
Broker
SP Angel Corporate Finance LLP
Prince Frederick House
35-39 Maddox Street
London
W1S 2PP
Holders Technology plc | Annual Report & Accounts 2018
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 profit after taxation for the financial year attributable to shareholders of £169,000 (2017: profit
£17,000).
Full details are contained in the Group income statement on page 21. The directors have proposed a final dividend of
0.50p per share payable on 21 May 2019 to shareholders on the register at close of business on 3 May 2019. The total
dividend for the year, including the interim dividend of 0.25p (2017: 0.25p) per share paid on 9 October 2018, amounts
to £31,000 (2017: £20,000), which is equivalent to 0.75p (2017: 0.50p) 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, all of whom served throughout the year, are listed on page 6. The beneficial shareholdings of the
directors at 30 November 2018 are set out in note 23 to the financial statements.
Rudi Weinreich, aged 72, 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 46, 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 a large
American telecom consulting company.
Paul Geraghty, aged 58, 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.
Thomas Bray, aged 37, joined the Group in 2013 as Holders Components Sales Director, and is now LED Business
Development Director. Thomas was previously Technical Director of ACDC Lighting.
David Mahony, aged 75, is the Senior Non-Executive Director, appointed in 1988.
Substantial shareholdings
At 15 February 2019 the company had been informed of the following interests, in addition to the interests of R W
Weinreich and T G Bray, amounting to 3% or more in the issued ordinary share capital of the company:
Andre Marcou
Armstrong Investments Limited
Rath Dhu Limited
Stockinvest Limited
Hugh S Pearson Gregory
Number
%
520,000
275,000
235,000
171,500
161,290
12.50%
6.61%
5.65%
4.12%
3.88%
Holders Technology plc | Annual Report & Accounts 2018
7
BOARD REPORTS
Report of the Directors (continued)
Annual General Meeting
The Annual General Meeting of the Company will be held at the Fairfax Suite, Cromwell Hotel, Old Stevenage,
Hertfordshire SG1 3AZ at 11.30 a.m. on 29 April 2019.
Special business at the Annual General Meeting
An ordinary resolution (set out as resolution 5 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 150,000 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 6 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 7 in the Notice of Annual General Meeting) will be proposed to authorise
the company to buy on the open market up to 415,955 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,
19 and 24 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 enjoys a positive cash position, and benefits from a number of customers and suppliers across different
geographic areas and industries. Management have prepared budgets and forecasts covering the period to May 2020.
As a consequence, the directors believe that the company is well placed to manage its business risks successfully
despite the current uncertain economic outlook and therefore conclude it is appropriate to prepare the financial
statements on a going concern basis.
Holders Technology plc | Annual Report & Accounts 2018
8
BOARD REPORTS
Report of the Directors (continued)
Statement of directors' responsibilities
The directors are responsible for preparing the Strategic Report, Report of the Directors 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
21 February 2019
Holders Technology plc | Annual Report & Accounts 2018
9
BOARD REPORTS
Directors’ Remuneration Report
The directors present the directors’ remuneration report for the financial year ended 30 November 2018. 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.
Contributions are made to the 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 certain 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 23
to the financial statements.
Holders Technology plc | Annual Report & Accounts 2018 10
BOARD REPORTS
Corporate Governance
CORPORATE GOVERNANCE REPORT
The QCA Code sets out 10 principles which it advocates
should be applied. These are listed below together with
a short explanation of how the Group applies each of
the principles. Where the Group does not fully apply a
principle, an explanation as to why has been provided.
Principle One: Business Model and Strategy
For each business unit the Board has adopted a
strategy to promote long-term value for shareholders
as outlined in the Operating and Business Review on
pages 2 to 3.
Principle Two: Understanding Shareholder Needs and
Expectations
is committed
The Board
to maintaining good
communications and constructive dialogue with its
shareholders. Institutional shareholders and analysts
are welcome to discuss issues and provide feedback at
meetings with
In addition, all
the Company.
shareholders are encouraged to attend the Company’s
Annual General Meeting. Investors also have access to
current
its
website, www.holderstechnology.com. Paul Geraghty,
Group Finance Director is available in the first instance
to respond to investor enquiries.
information on the Company though
Principle
Responsibilities
Three:
Stakeholder
and
Social
The Board recognises that the long-term success of the
Group is reliant upon the efforts of the employees,
customers and suppliers to the Group. The Board has
put in place a range of processes and systems to ensure
close contact with
is
maintained.
The Board also ensures that key
relationships with customers and suppliers are the
responsibility of one of the directors or the Divisional
Managing Directors.
these key stakeholders
The Board at all times seeks to act in a legally compliant
and socially responsible manner and also seeks to
ensure that senior management act in a similar
fashion.
procedures are in place, and that these are being
effectively implemented so as to identify, evaluate and
manage the risks faced by the Group. The nature of the
risks and degree of exposure are reviewed periodically.
The following principal risks, and controls to mitigate
them, have been identified:
Activity
Risk
Impact
Control(s)
Customers
and
Suppliers
Loss of major
customer/
supplier
Reduction
in
profitability
Key
Manage-
ment
Recruitment/
retention of
key
management
Reduced
perfor-
mance
Business
Interruption
Loss of
operating
capability.
Potential
loss of
business
Financial
Control
Fraud or
misstatement
of accounts
Financial
loss
Multiple-level
contact.
Reduce
dependence on
any one
customer/
supplier.
Regular review.
Competitive
short term and
long-term
remuneration
and incentives.
Stimulating
environment
with clear two-
way
communication.
Business
interruption
insurance. Dual
capacity UK and
Germany.
Ongoing
renewal and
maintenance of
machinery.
Multiple
authorisation
levels and
internal
controls.
Segregation of
duties.
Monthly review
of operating
results and
cash.
Principle Four: Risk Management
The Board and Divisional Managing Directors are
responsible to the Board for ensuring both that
There are a range of Group policies which cover
matters such as share dealing. The current Board takes
the view that an internal audit function is not necessary
or practical due to the size of the Group and the close
day to day control exercised by the executive directors.
Holders Technology plc | Annual Report & Accounts 2018 11
BOARD REPORTS
Corporate Governance (continued)
However, the Board will continue to monitor the need
for an internal audit function.
Principle Five: A Well-Functioning Board of Directors
The Board comprises:
Executive Chairman
•
Rudi Weinreich
• Group Managing Director Victoria Blaisdell
• Group Finance Director
•
Executive Director
• Non-executive Director
Paul Geraghty
Thomas Bray
David Mahony*
Currently the Group Managing Director and Group
Finance Director are full time employees.
The
Executive Chairman and Executive Director are part
time employees, and the non-Executive Director David
Mahony is a part time consultant. Biographical details
of the current directors are set out within Principle Six
below. At each Annual General Meeting, one-third of
the Board members retire by rotation and offer
themselves for re-election.
*David Mahony is deemed by the Board to be
independent even though he has served on the Board
since the company was floated on the Unlisted
Securities Market in 1988. The Board believes that Mr
Mahony’s broad senior level experience enables him to
be classed as independent.
The letters of appointment of all directors are available
for inspection at the Company’s Tweedbank office
during normal business hours.
The Executive and Non-Executive Directors are bound
by contracts which require no more than one year’s
notice. The Non-executive Director receives a fee for
his services as a director which is approved by the
Board, based upon the time commitment and
responsibilities of his roles, of current market rates for
comparable appointments, and within any constraints
imposed by the current financial position of the Group.
The Non-executive Director is also reimbursed for
travelling and other incidental expenses incurred on
Group business.
Directors’ emoluments, including Directors’ interest in
share options over the Group’s share capital, are set
out in Note 23 of the 2018 Annual Report.
The Board meets each month. It has an established
Audit Committee and a Remuneration Committee,
particulars of which appear hereafter. The Board has
resolved that any appointments to the Board are made
by the Board as a whole and therefore a Nominations
Committee has not been created.
Attendance at Board and Committee Meetings
The Board retains full control of the Group with day-to-
day operational control delegated to Executive
Directors. The full Board meets monthly and on other
occasions as it considers necessary. During 2018 there
were twelve Board meetings, one Remuneration
Committee meeting and two Audit Committee
meetings. All meetings were fully attended by their
constituent directors apart from one board meeting
where apologies were received from David Mahony.
Principle Six: Appropriate Skills and Experience of the
Directors
The Board currently consists of five directors. The
Board believes that the Board composition
is
appropriate to provide the necessary skills, balance
and experience for the needs of the company.
Board biographies:
• Rudi Weinreich, Executive Chairman, born in
1946 in Austria, was sole executive director of
Holders Technology until 1987. He has been
responsible for all aspects of the business since
the business commenced
in 1972 and
continues to be closely involved with all
aspects of the Group.
• Victoria Blaisdell BSc, born in 1972, joined the
Group in 2004 and is now the Group Managing
Director. She previously worked in the IT
industry and has worked in several countries as
a Senior Consultant for one of the largest
global IT consultancies.
• Paul Geraghty BSc, FCA, born in 1960, joined
the Group in 2011 as Group Finance Director
and Company Secretary. He previously held
senior
engineering
roles
companies, including Elektron Components
Limited and Protec plc.
financial
in
Holders Technology plc | Annual Report & Accounts 2018 12
BOARD REPORTS
Corporate Governance (continued)
Principle Six: Appropriate Skills and Experience of the
Directors (continued)
• Thomas Bray MEng (Electronic Engineering),
born in 1981, is the LED Business Development
Director and joined the Board in 2017 as an
Executive Director. Thomas was previously the
Technical Director of ACDC Lighting Ltd.
• David Mahony BA (Economics), MSc, born in
1944, is the Senior Non-executive Director,
appointed in 1988. He is also a Director of
Tower Mint Limited. David spent thirty-five
years with Hambros Bank in Corporate Finance
and as an Industrial Advisor, during which time
he was Chairman or Director of various PLC,
Aim and Private companies.
Principle Seven: Evaluation of Board Performance
In 2019 the Board will strengthen its hitherto informal
monitoring of individual directors’ performance by
instituting a formal system whereby the Chairman and
non-executive director will formally meet to evaluate
and record the performance of the executive directors
whilst the executive directors will perform the same
exercise in regard to the Chairman and any non-
executive directors. This process of board evaluation
will also examine issues relating to succession planning
as necessary.
Principle Eight: Corporate Culture
The Board recognises the importance of appropriate
ethical values and behaviour in relation to the Group’s
activities and encourages suitable behaviour and
principles from employees and suppliers. These
principles are set out in the company’s Ethics Policy
its
and the Board keeps a watching brief over
application.
The Company has adopted, for the Board and Senior
Management, a Share Dealing Code in accordance with
Aim Rule 21.
Principle Nine:
Structures and Processes
Maintenance of Governance
Ultimate authority for all aspects of the Group’s
activities rests with the Board. Rudi Weinreich is
Executive Chairman of the Board, which sets the
overall business strategy. Victoria Blaisdell is Group
Managing Director responsible for the performance of
the Group in line with its agreed business strategy.
The following matters are reserved for the Board:
• Senior appointments and remuneration
• Budget approval
• Acquisitions
• Major capital expenditure
• Major sales quotations and purchase orders
• Foreign exchange policy
• Significant legal, health and safety matters
• Stock exchange
compliance and other
corporate governance issues
Principle Nine:
Structures and Processes (continued)
Maintenance of Governance
Mr Weinreich when required acts in an Executive
capacity, for example by deputising for the German
Managing Director when necessary.
The board
recognises that his role
is therefore not 100%
it believes that, given Mr
independent however
Weinreich’s unique skills and experience, this is a cost-
effective beneficial arrangement for the size of the
company.
In accordance with the Companies Act 2006, the Board
complies with its duties: to act within its powers; to
promote the success of the Company; to exercise
independent judgement; to exercise reasonable care,
skill and diligence; to avoid conflicts of interest; not to
accept benefits from third parties and always to
declare any interest in a proposed transaction or
arrangement.
Audit Committee
For the period under review the Audit Committee
comprised David Mahony. Paul Geraghty as Group
Finance Director is invited to attend Audit Committee
meetings when appropriate. The Audit Committee
meets as required and specifically to review the Interim
Report and Annual Report. There were two meetings
of the Audit Committee during 2018. The Audit
Committee also reviews the findings of the external
auditor and reviews accounting policies and material
accounting judgements.
The independence and effectiveness of the external
auditor is reviewed annually. The possibility of
Holders Technology plc | Annual Report & Accounts 2018 13
BOARD REPORTS
Corporate Governance (continued)
undertaking an audit tender process is considered on a
regular basis. The Audit Committee meets at least once
per year with the auditor to discuss their independence
and objectivity, the Annual Report, any audit issues
arising, internal control processes, appointment and
fee levels and any other appropriate matters. As well
as providing audit related services, the auditor also
provides taxation and other advice. The fees in respect
of audit and tax services are set out in Note 8 of the
Annual Report. Fees for non-audit services paid to the
auditor are not deemed to be of such significance to
them as to impair their independence and therefore
the Audit Committee considers that the objectivity and
independence of the auditor is safeguarded.
Remuneration Committee
For the period under review the Remuneration
Committee comprised David Mahony. The purpose of
the Remuneration Committee is to ensure that the
Executive Directors and other employees are fairly
rewarded for their individual contribution to the
overall performance of the Group. The Committee
considers and recommends
the
remuneration of the Executive Directors and is kept
informed of the remuneration packages of senior staff
and invited to comment on these. There was one
Remuneration Committee meeting during 2018.
the Board
to
recommends
The Board retains responsibility for remuneration
policy. Executive remuneration packages are designed
to attract and retain executives of the necessary skill
and calibre to run the Group. The Remuneration
Committee
the
remuneration packages by reference to individual
performance, general market changes and any
constraints imposed by the then financial position of
the Group. The Remuneration Committee has
responsibility for recommending the adoption of any
long-term incentive schemes.
the Board
to
Principle Nine:
Structures and Processes (continued)
Maintenance of Governance
There are three main elements of the remuneration
packages for Executive Directors and staff:
1. Basic salaries and benefits in kind: Basic salaries are
recommended to the Board by the Remuneration
Committee, considering the performance of the
in
individual and the rates for similar positions
comparable companies. Certain benefits in kind are
available to senior staff and Executive Directors.
2. Share options: The Company operates an approved
share option scheme for Executive Directors and
certain other employees both to motivate those
individuals through equity participation, and to align
the interests of senior employees with those of
shareholders. Exercise of share options under the
schemes is subject to specified exercise periods and
compliance with the AIM Rules. The schemes are
overseen by the Remuneration Committee which
recommends to the Board all grants of share options
specifying the terms under which eligible individuals
may be invited to participate.
3. Bonus Scheme: The Group has a discretionary bonus
scheme for staff and Executive Directors which is
specific to each individual and the role performed by
that individual within the Group. Salaries and benefits
were reviewed in November 2018 to cover the period
to 30 November 2019. Future reviews will be held in
November/ December each year for implementation
from 1 December.
Principle Ten: Shareholder Communication
is committed
to maintaining good
The Board
communication with its shareholders. All shareholders
are encouraged to attend the Company’s Annual
General Meeting. Investors also have access to current
information on the Company though its website,
www.holderstechnology.com, and via Paul Geraghty,
Group Finance Director, who is available to answer
investor queries.
Holders Technology plc | Annual Report & Accounts 2018 14
AUDITOR’S REPORT
Independent auditor’s report to the members of Holders Technology plc
Opinion
Our opinion on the financial statements is unmodified
We have audited the financial statements of Holders Technology plc (the ‘parent company’) and its subsidiaries
(the ‘group’) for the year ended 30 November 2018 which comprise the Group Income Statement, the Group
Statement of Comprehensive Income, the Group and Company Statements of Changes in Equity, the Group and
Company Balance Sheets, the Group and Company Statements of Cash Flow and the notes to the financial
statements, including a summary of significant accounting policies. The financial reporting framework that has
been applied in the preparation of the group financial statements 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.
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 2018 and of the group's profit 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 as applied in accordance with the provisions of the Companies Act
2006; and
the financial statements have been prepared in accordance with the requirements of the Companies Act
2006.
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law.
Our responsibilities under those standards are further described in the Auditor’s responsibilities for the audit of
financial statements section of our report. We are independent of the group and the parent company in accordance
with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC’s
Ethical Standard as applied to listed entities, and we have fulfilled our other ethical responsibilities in accordance with
these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a
basis for our opinion.
Conclusions relating to going concern
We have nothing to report in respect of the following matters in relation to which the ISAs (UK) require us to report
to you where:
•
•
the directors’ use of the going concern basis of accounting in the preparation of the financial statements is
not appropriate; or
the directors have not disclosed in the financial statements any identified material uncertainties that may cast
significant doubt about the group’s or the parent company’s ability to continue to adopt the going concern
basis of accounting for a period of at least twelve months from the date when the financial statements are
authorised for issue.
Holders Technology plc | Annual Report & Accounts 2018 15
AUDITOR’S REPORT
Independent auditor’s report (continued)
Overview of our audit approach
• Overall group materiality: £62,000, which represents 0.5% of the
group's revenue;
• Key audit matters were identified as impairment of investments; and
• We performed full scope audit procedures on the financial statements
of Holders Technology plc, and on the financial information of Holders
Technology UK Limited and Holders Technology GmbH
Key audit matters
Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the
financial statements of the current period and include the most significant assessed risks of material misstatement
(whether or not due to fraud) that we identified. These matters included those that had the greatest effect on: the
overall audit strategy; the allocation of resources in the audit; and directing the efforts of the engagement team. These
matters were addressed in the context of our audit of the financial statements as a whole, and in forming our opinion
thereon, and we do not provide a separate opinion on these matters.
Key Audit Matter – parent
How the matter was addressed in
the audit
Impairment of investments
At the year end Holders Technology plc
had an investment of £2,291,000 in
subsidiary undertakings.
International Accounting Standard (IAS)
36 ‘Impairment of assets’ requires
management to test assets other than
goodwill and indefinite life intangibles for
impairment where potential triggers for
impairment are identified. Such triggers
include declining performance or losses
at individual cash generating units
(CGUs), which are identified as being
each division.
Our audit work included, but was not
restricted to:
• Assessing whether the company’s
accounting policy for impairment of
investments is in accordance with IAS
36;
• checking the appropriateness of the
methodology applied by management
in their assessment of the carrying
value of investments in accordance
with the accounting policy;
• comparing historical forecasts against
actual results to test the accuracy of
management’s forecasting;
• applying sensitivity analysis to future
forecast assumptions; and
• evaluating the reasonableness of
inputs including the assumptions
contained in the impairment models
through our knowledge of the business
and future forecasts.
Holders Technology plc | Annual Report & Accounts 2018 16
AUDITOR’S REPORT
Independent auditor’s report (continued)
Key Audit Matter – parent
How the matter was addressed in
the audit
Impairment of investments
(continued)
The performance of the impairment
review requires management to make
key judgements and assumptions. We
therefore identified the impairment of
investments as a significant risk, which
was one of the most significant assessed
risks of material misstatement.
The company's accounting policy on
investments, note 2 to the financial
statements and related disclosures are
included in note 15.
Key observations
Our testing did not identify any material
deviations in the Company’s impairment
review from IAS 36 Impairment of Assets.
We have no key audit matters to report in relation to the Group.
Our application of materiality
We define materiality as the magnitude of misstatement in the financial statements that makes it probable that the
economic decisions of a reasonably knowledgeable person would be changed or influenced. We use materiality in
determining the nature, timing and extent of our audit work and in evaluating the results of that work.
Materiality was determined as follows:
Materiality measure Group
Parent
Financial statements
as a whole
£62,000, which is 0.5% of the
group’s total revenue. This
benchmark is considered the
most appropriate because
revenue is a primary measure
used by shareholders in
assessing the performance of
the business and is a KPI for
the Group.
£44,000 which is 1.5% of
parent company’s total assets.
This benchmark is considered
the most appropriate because
it is a non-trading company,
holding investments in group
companies.
Materiality for the current
year is higher than the level
that we determined for the
year ended 30 November
2017 to reflect the increase in
revenue over the year.
Materiality for the current
year is consistent with the
level that we determined for
the year ended 30 November
2017 as there were no
significant changes in total
assets at year end.
Holders Technology plc | Annual Report & Accounts 2018 17
AUDITOR’S REPORT
Independent auditor’s report (continued)
Materiality measure Group
Parent
Performance
materiality used to
drive the extent of
our testing
75% of financial statement
materiality
75% of financial statement
materiality
Specific materiality We also determine a lower
level of specific materiality for
certain areas such as
directors' remuneration and
related party transactions
We also determine a lower
level of specific materiality for
certain areas such as
directors' remuneration and
related party transactions
Communication of
misstatements to
the audit committee
£3,100 and misstatements
below that threshold that, in
our view, warrant reporting
on qualitative grounds.
£2,200 and misstatements
below that threshold that, in
our view, warrant reporting
on qualitative grounds.
The graph below illustrates how performance materiality interacts with our overall materiality and the tolerance for
potential uncorrected misstatements.
Overall materiality - group
Overall materiality - parent
25%
75%
Tolerance for
potential uncorrected
misstatements
Performance
materiality
25%
75%
An overview of the scope of our audit
Our audit approach was a risk-based approach founded on a thorough understanding of the group's business. We
took into account the size and risk profile of each entity, any changes in the business and other factors when
determining the level of work to be performed at each entity, which in particular included the following
considerations:
• The group operates from three locations with accounting functions at each location. All accounting is conducted
locally for each entity within the group and we have tailored our audit response accordingly. Audit work for
Holders Technology plc and Holders Technology UK Limited was undertaken by the group audit team. Audit
work for Holders Technology GmbH was undertaken by Warth & Klein Grant Thornton under direction from the
group audit team, with the group audit team reviewing the audit work completed. We performed full scope
audit procedures on the financial statements of Holders Technology plc, and on the financial information of
Holders Technology UK Limited and Holders Technology GmbH. All other entities in the group are dormant. In
assessing the risks of material misstatement to the group financial statements we considered the transactions
undertaken by each entity and therefore where the focus of our work was required;
• The total percentage coverage of procedures over revenue was 100%;
• The total percentage coverage of procedures over total assets was 100%;
• Our audit approach was fully substantive in nature and consistent with 2017.
Holders Technology plc | Annual Report & Accounts 2018 18
AUDITOR’S REPORT
Independent auditor’s report (continued)
Other information
The directors are responsible for the other information. The other information comprises the information included in
the annual report other than the financial statements and our auditor’s report thereon. Our opinion on the financial
statements does not cover the other information and, except to the extent otherwise explicitly stated in our report,
we do not express any form of assurance conclusion thereon.
In connection with our audit of the financial statements, our responsibility is to read the other information and, in
doing so, consider whether the other information is materially inconsistent with the financial statements or our
knowledge obtained in the audit or otherwise appears to be materially misstated. If we identify such material
inconsistencies or apparent material misstatements, we are required to determine whether there is a material
misstatement in the financial statements or a material misstatement of the other information. If, based on the work
we have performed, we conclude that there is a material misstatement of this other information, we are required to
report that fact.
We have nothing to report in this regard.
Our opinion on other matters prescribed by the Companies Act 2006 is unmodified
In our opinion, based on the work undertaken in the course of the audit:
•
the information given in the Strategic Report and the Report of the directors for the financial year for which
the financial statements are prepared is consistent with the financial statements; and
the Strategic Report and the Report of the directors have been prepared in accordance with applicable legal
requirements with applicable legal requirements.
•
Matters on which we are required to report under the Companies Act 2006
In the light of the knowledge and understanding of the group and the parent company and its environment obtained
in the course of the audit, we have not identified material misstatements in the Strategic report or the Report of the
directors.
Matters on which we are required to report by exception
We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires
us to report to you if, in our opinion:
• adequate accounting records have not been kept by the parent company, or returns adequate for our audit have
not been received from branches not visited by us; or
the parent company financial statements are not in agreement with the accounting records and returns; or
•
• certain disclosures of directors’ remuneration specified by law are not made; or
• we have not received all the information and explanations we require for our audit.
Holders Technology plc | Annual Report & Accounts 2018 19
AUDITOR’S REPORT
Independent auditor’s report (continued)
Responsibilities of directors for the financial statements
As explained more fully in the Statement of directors’ responsibilities 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, and for such
internal control as the directors determine is necessary to enable the preparation of financial statements that are free
from material misstatement, whether due to fraud or error.
In preparing the financial statements, the directors are responsible for assessing the group’s and the parent company’s
ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going
concern basis of accounting unless the directors either intend to liquidate the group or the parent company or to cease
operations, or have no realistic alternative but to do so.
Auditor’s responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from
material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion.
Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with
ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and
are considered material if, individually or in the aggregate, they could reasonably be expected to influence the
economic decisions of users taken on the basis of these financial statements.
A further description of our responsibilities for the audit of the financial statements is located on the Financial
Reporting Council’s website at: www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor’s
report.
Use of our report
This report is made solely to the company’s members, as a body, in accordance with Chapter 3 of Part 16 of the
Companies Act 2006. Our audit work has been undertaken so that we might state to the company’s members those
matters we are required to state to them in an auditor’s report and for no other purpose. To the fullest extent
permitted by law, we do not accept or assume responsibility to anyone other than the company and the company’s
members as a body, for our audit work, for this report, or for the opinions we have formed.
Jeremy Read
Senior Statutory Auditor
for and on behalf of Grant Thornton UK LLP
Statutory Auditor, Chartered Accountants
Milton Keynes
21 February 2019
Holders Technology plc | Annual Report & Accounts 2018 20
FINANCIAL STATEMENTS
Group Income Statement for the year ended 30 November 2018
Revenue - continuing operations
Cost of sales
Gross profit
Distribution costs
Administrative expenses
Other operating income/ (expenses)
Operating profit from continuing operations
Finance expenses
Profit before taxation from continuing operations
Tax credit/ (expense)
Profit after taxation from continuing operations
Loss from discontinued operations
Profit for the year attributable to equity shareholders
Basic earnings per share – continuing operations
Diluted earnings per share – continuing operations
Basic and diluted loss per share – discontinued operations
Total earnings per share
Note
5
7
6
8
9
11
11
11
11
2018
£’000
12,486
(9,220)
3,266
(422)
(2,696)
36
184
(7)
177
(8)
169
-
169
4.06p
4.03p
-
4.06p
2017
£’000
12,208
(9,003)
3,205
(438)
(2,695)
(7)
65
(11)
54
5
59
(42)
17
1.42p
1.34p
(1.01p)
0.41p
Group statement of comprehensive income for the year ended 30 November 2018
Profit for the year
Items that may be reclassified subsequently to profit or loss:
Exchange differences on translating foreign operations
Total comprehensive income for the year
2018
£’000
169
15
184
2017
£’000
17
73
90
Holders Technology plc | Annual Report & Accounts 2018 21
FINANCIAL STATEMENTS
Statements of Changes in Equity for the year ended 30 November 2018
Group
Balance at 30 November 2016
Dividends
Share based payments
Transactions with owners
Profit for the year
Other comprehensive income
Total comprehensive income for the
year
Balance at 30 November 2017
Dividends
Share based payments
Transactions with owners
Profit for the year
Other comprehensive income
Total comprehensive income for the
year
Balance at 30 November 2018
Share
capital
Share
premium
Capital
redemption
reserve
Translation
reserve
Retained
earnings
Total
equity
£'000
416
£'000
1,590
£'000
1
£'000
134
£'000
1,719
£'000
3,860
-
-
-
-
-
-
-
-
-
-
-
-
416
1,590
-
-
-
-
-
-
-
-
-
-
-
-
416
1,590
-
-
-
-
-
-
1
-
-
-
-
-
-
1
-
-
-
-
73
73
(21)
3
(18)
17
-
(21)
3
(18)
17
73
17
90
207
1,718
3,932
-
-
-
-
15
15
(21)
4
(17)
169
-
(21)
4
(17)
169
15
169
184
222
1,870
4,099
Company
Balance at 30 November 2016
Dividends
Share based payments
Transactions with owners
Loss and total comprehensive
income for the year
Balance at 30 November 2017
Dividends
Share based payments
Transactions with owners
Loss and total comprehensive
income for the year
Balance at 30 November 2018
Share
capital
Share
premium
£'000
416
£'000
1,590
Capital
redemption
reserve
£'000
1
-
-
-
-
416
-
-
-
-
-
-
-
-
1,590
-
-
-
-
416
1,590
-
-
-
-
1
-
-
-
-
1
Retained
earnings
£'000
589
(21)
3
(18)
(42)
529
(21)
4
(17)
(92)
Total
equity
£'000
2,596
(21)
3
(18)
(42)
2,536
(21)
4
(17)
(92)
420
2,427
Holders Technology plc | Annual Report & Accounts 2018 22
FINANCIAL STATEMENTS
Balance Sheets at 30 November 2018
Company number: 1730535
Assets
Non-current assets
Goodwill
Property, plant and equipment
Investments in subsidiaries
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
Note
Group
2018
£’000
2017
£’000
13
14
15
21
16
17
18
20
21
22
318
357
-
10
685
2,849
1,791
-
403
5,043
(1,373)
(43)
(1,416)
3,627
(204)
(9)
(213)
4,099
416
1,590
1
1,870
222
4,099
318
369
-
16
703
2,408
2,272
-
579
5,259
(1,675)
(122)
(1,797)
3,462
(226)
(7)
(233)
3,932
416
1,590
1
1,718
207
3,932
Company
2018
£’000
-
2
2,291
-
2,293
-
628
-
11
639
(505)
-
(505)
134
-
-
-
2,427
416
1,590
1
420
-
2,427
2017
£’000
-
2
2,291
-
2,293
-
611
-
4
615
(372)
-
(372)
243
-
-
-
2,536
416
1,590
1
529
-
2,536
Parent Company Income Statement
As permitted by Section 408 of the Companies Act 2006, the income statement of the parent company is not
presented as part of these financial statements. The parent company’s loss for the financial year was £92,000 (2017:
loss £42,000).
The financial statements were approved by the Board on 21 February 2019 and signed on its behalf by:
R W Weinreich
Director
Holders Technology plc | Annual Report & Accounts 2018 23
FINANCIAL STATEMENTS
Statements of Cash Flows for the year ended 30 November 2018
Cash flows from operating activities
Profit/ (loss) before tax from continuing
operations
Share-based payment charge
Depreciation
Increase in inventories
Increase in trade and other receivables
Increase)/ (decrease) in trade and other
payables
Interest expense
Cash (used in)/ generated from operations
Interest paid
Corporation tax paid
Loss from discontinued operations
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
Dividends received from Group undertakings
Interest received
Net cash (used in)/generated from investing activities
Cash flows from financing activities
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
Group
2018
£’000
2017
£’000
Company
2018
£’000
2017
£’000
177
4
71
(427)
(407)
571
8
(3)
(8)
(88)
-
(99)
(58)
-
-
-
(58)
(21)
(21)
(178)
579
2
403
54
3
72
(34)
(368)
128
11
(134)
(11)
-
(9)
(154)
(41)
4
-
-
(37)
(21)
(21)
(212)
781
10
579
(92)
4
-
-
(17)
133
(18)
10
-
-
-
10
-
-
-
18
18
(21)
(21)
7
4
-
11
(54)
-
4
-
(419)
(239)
-
(708)
-
-
-
(708)
-
-
400
15
415
(21)
(21)
(314)
318
-
4
Holders Technology plc | Annual Report & Accounts 2018 24
FINANCIAL STATEMENTS
Notes to the Financial Statements
1. General information
Holders Technology plc, a public company limited by shares, 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.
Change in accounting policies
The Group has not adopted any new standards or amendments that have a significant impact on the Group’s
results or financial position.
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, 19 and 24 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 numerous financial resources, as shown in the financial statements, 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 and therefore
conclude it is appropriate to prepare the financial statements on a going concern basis.
Holders Technology plc | Annual Report & Accounts 2018 25
FINANCIAL STATEMENTS
Notes to the Financial Statements (continued)
2. Accounting policies (continued)
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 9 Financial Instruments (EU effective date 1 January 2018)
IFRS 15 Revenue from contracts with customers including amendments to IFRS 15 (EU effective date
1 January 2018)
IFRS 16 Leases (EU effective date 1 January 2019)
Amendments to IAS 40: Recognition of Deferred Tax Assets for Unrealised Losses (EU effective date
1 January 2018)
Amendments to IFRS 2: Classification and Measurement of Share-Based Payments Transactions (EU
effective date 1 January 2018)
Annual improvements to IFRS Standards 2014 – 2017 cycle (EU effective date 1 January 2018)
IFRIC Interpretation 22 Foreign currency transactions and advance consideration (EU effective date 1
January 2018)
Clarifications to IFRS 15: Revenue from Contracts with Customers (EU effective date 1 January 2018)
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. The group’s revenues normally comprise items where parties, products, prices and
ownership transfers are very unambiguous and although we do not anticipate a significant impact arising from
IFRS 15, a full assessment has not yet been done.
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. Control is achieved where the Group is exposed or has rights to variable returns from its
involvement with the investee and has the ability to affect those returns through the power over the investee.
Subsidiaries
Subsidiaries are entities controlled by the company. Control is achieved where the Group is exposed or has rights
to variable returns from its involvement with the investee and has the ability to affect those returns through the
power over the investee. 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.
Holders Technology plc | Annual Report & Accounts 2018 26
FINANCIAL STATEMENTS
Notes to the Financial Statements (continued)
2. Accounting policies (continued)
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.
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 to third party customers occurring in the period, stated exclusive
of value added tax and net of trade discounts and rebates. Revenue is earned from sale of PCB raw and processed
materials; and LED components, assemblies and finished goods. 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.
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.
Holders Technology plc | Annual Report & Accounts 2018 27
FINANCIAL STATEMENTS
Notes to the Financial Statements (continued)
2. Accounting policies (continued)
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.
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.
Holders Technology plc | Annual Report & Accounts 2018 28
FINANCIAL STATEMENTS
Notes to the Financial Statements (continued)
2. Accounting policies (continued)
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.
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. Deferred tax is not
discounted.
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.
Holders Technology plc | Annual Report & Accounts 2018 29
FINANCIAL STATEMENTS
Notes to the Financial Statements (continued)
2. Accounting policies (continued)
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 20. 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. Independent actuaries annually calculate the defined benefit obligation.
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.
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 re-sale.
•
Holders Technology plc | Annual Report & Accounts 2018 30
FINANCIAL STATEMENTS
Notes to the Financial Statements (continued)
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. The key current judgement relates to the
liability for Cross Border tax. The full potential liability, of up to £43,000, has been provided within current tax
liabilities and accruals. The final outturn depends upon an ongoing court case decision. The company is not a
party to the court case and the timing of its conclusion is currently uncertain.
Estimation uncertainty
Impairment testing
Impairment testing of goodwill and investment in subsidiaries 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. Management is not aware of any probable scenarios that would require changes in its key
estimates, and lead to impairment. The key assumption impacting the value in use is the revenue forecast.
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 Finance Director manages the Group’s treasury activities. 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 19).
Holders Technology plc | Annual Report & Accounts 2018 31
FINANCIAL STATEMENTS
Notes to the Financial Statements (continued)
4. Financial risk management (continued)
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
mitigate 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 $800,000 were held as described in note
19.
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
The group has four continuing operating divisions: PCB UK, PCB Germany, LED UK and LED Germany. Only the two
PCB divisions qualify to be reported as operating segments. Both PCB divisions however have very similar
products, processes, customers, distribution means and margins, and therefore in the Board’s view they qualify
to be aggregated as one “PCB” reportable segment.
In the Board’s view, it is important for readers to be provided with a meaningful picture of the Group’s
performance and therefore the non-reportable LED divisions have also been aggregated and reported below. The
two reported segments are therefore:
• PCB, which distributes materials, equipment and supplies to the PCB industry. This comprises UK PCB and
Germany PCB.
• LED, which distributes LED-related components, lighting products and lighting solutions. This comprises
Holders Components UK and Germany.
Management information is prepared and monitored, and strategic decisions are made based on all four divisions’
results.
Holders Technology plc | Annual Report & Accounts 2018 32
FINANCIAL STATEMENTS
Notes to the Financial Statements (continued)
5. Segment reporting (continued)
PCB
LED
Other
Total
2018
£’000
9,374
(7,168)
2,206
(331)
(1,625)
Revenue - Continuing
Cost of sales
Gross profit
Distribution costs
Administrative
expenses
Other operating
income/(expenses)
Segment operating
profit/ (loss)
Discontinued loss
Total operating
profit/ (loss)
Other segmental information
Depreciation
(Note 14)
Segment assets
Segment liabilities
280
-
280
73
2017
£’000
9,453
(7,169)
2,284
(335)
2018
£’000
3,112
(2,052)
1,060
(91)
2017
£’000
2,755
(1,834)
921
(103)
2018
£’000
2017
£’000
-
-
-
-
-
-
-
-
2018
£’000
12,486
(9,220)
3,266
(422)
2017
£’000
12,208
(9,003)
3,205
(438)
(1,693)
(985)
(917)
(86)
(85)
(2,696)
(2,695)
30
(42)
3
7
3
28
214
-
214
70
(13)
-
(92)
(42)
(83)
-
(57)
-
(13)
(134)
(83)
(57)
2
7
1
3
76
36
184
-
184
(7)
65
(42)
23
80
7,282
(2,136)
7,501
(2,633)
1,807
(3,306)
2,617
(4,093)
(3,361)
3,813
(4,163)
4,703
5,728
(1,629)
5,955
(2,023)
“Other” amounts relate to central Group activities, which are not identifiable to the operating segments.
Analysis of external revenue by geographic region
UK
EU
Rest of World
Total
2018
£’000
2017
£’000
2018
£’000
Revenue - PCB
- LED
Non-current assets
1,341
1,628
2,969
489
1,458
1,474
2,932
519
6,582
1,369
7,951
184
2017
£’000
6,558
1,034
7,592
175
2018
£’000
2017
£’000
2018
£’000
2017
£’000
1,451
115
1,566
12
1,437
247
1,684
2
9,374
3,112
12,486
685
9,453
2,755
12,208
696
UK revenues originate from UK which is where the UK segments are domiciled. EU and Rest of World revenues
originate from Germany which is where the operating segments are domiciled. Over 90% of Rest of World
revenues are from European countries outside the EU.
No customer contributed more than 10% of external revenue.
Holders Technology plc | Annual Report & Accounts 2018 33
FINANCIAL STATEMENTS
Notes to the Financial Statements (continued)
6. Finance income and expenses
Interest on bank deposits
Interest on tax liability 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)
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
- Audit related assurance services
- Tax compliance services
- Tax advisory services
Operating leases - land and buildings
Operating leases – motor vehicles
Exchange profit
Restructuring costs
8. Taxation
Analysis of the charge in the period
Current tax
- Current period
- Adjustments in respect of prior periods
Deferred tax charge/ (credit) (note 21)
Total tax
2018
£’000
-
(7)
2018
£’000
8,950
76
76
24
27
2
8
-
148
-
(30)
-
2018
£’000
-
-
-
8
8
2017
£’000
-
(11)
2017
£’000
8,911
(34)
81
24
27
2
8
-
147
-
(6)
-
2017
£’000
-
-
-
(5)
(5)
Tax reconciliation
The tax for the period is lower (2017: lower) than the standard rate of corporation tax in the UK, effectively 19.0%
(2017: 19.3%) for the company’s financial year. The differences are explained below:
Profit before taxation
Profit/ (loss) before taxation multiplied by the rate of corporation
tax in the UK of 19.0% (2017: 19.3%)
Effects of:
Accelerated capital allowances
Taxation losses
Taxation
2018
£’000
177
34
2
(28)
8
2017
£’000
54
10
-
(15)
(5)
Holders Technology plc | Annual Report & Accounts 2018 34
FINANCIAL STATEMENTS
Notes to the Financial Statements (continued)
9. Discontinued operations
In March 2017 the LED finished goods activity in UK, branded as NRGstar, was discontinued. This point marked
the Group’s cessation of this type of LED operation, and a re-focus on sales of LED components, lighting solutions
and smart lighting systems.
Accordingly, this change has been presented as discontinued operations in the 2017 income statement, and in the
cash flow statement. The Board are of the view that this presentation of information enables users of the financial
statements to understand the financial effects of these operations no longer being part of the Group.
10. Profit 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 loss of £92,000 (2017
loss: £42,000).
As permitted by Section 408 of the Companies Act 2006, no separate income statement is presented in respect
of the parent company.
11. Earnings per share
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 2017 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
Basic earnings/ (loss) per share:
Continuing operations
Discontinued operations
Total operations
Diluted earnings/ (loss) per share:
Continuing operations
Discontinued operations
Total operations
2018
Number
4,159,551
31,043
4,190,594
2017
Number
4,159,551
254,868
4,414,419
2018
Pence per share
2017
Pence per share
4.06
-
4.06
4.03
-
4.03
1.42
(1.01)
0.41
1.34
(1.01)
0.33
Holders Technology plc | Annual Report & Accounts 2018 35
FINANCIAL STATEMENTS
Notes to the Financial Statements (continued)
12. Ordinary dividends
Final dividend for the year ended 30 November 2017 of 0.25p
(year ended 30 November 2016 final dividend: 0.25p)
Interim dividend paid in respect of the year of 0.25p (2017:
0.25p)
Amounts recognised as distributions to equity holders
2018
£’000
10
11
21
2017
£’000
10
11
21
The directors propose a final dividend in respect of the year ended 30 November 2018 of 0.50p per share. If
approved by shareholders, it will be paid on 21 May 2019 to shareholders registered on 3 May 2019.
13. Goodwill
Group
Cost
At 1 December
Currency translation
At 30 November
Analysis by cash generating unit
PCB
LED
2018
£’000
318
-
318
£’000
146
172
318
2017
£’000
316
2
318
£’000
146
172
318
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 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.
Holders Technology plc | Annual Report & Accounts 2018 36
FINANCIAL STATEMENTS
Notes to the Financial Statements (continued)
13. Goodwill (continued)
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 three-year period. The model includes the impact of expected changes in stock levels, anticipated
capital expenditure, tax costs, and dividends. Terminal values are calculated 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
PCB was 10%, and the discount rate for LED was 15.0%.
14. Property, plant, and equipment
Short leasehold
land and
buildings
£’000
Group
Motor vehicles,
plant and machinery,
office equipment
£’000
Company
Total
Office
equipment
Total
£’000
£’000
£’000
Cost
At 30 November 2017
Currency translation
Additions
Disposals
At 30 November 2018
Depreciation
At 30 November 2017
Currency translation
Provided in year
Disposals
At 30 November 2018
Net book value
At 30 November 2018
At 30 November 2017
92
-
-
-
92
92
-
-
-
92
-
-
2,303
9
70
(111)
2,271
1,934
(48)
76
(48)
1,914
357
369
2,395
9
70
(111)
2,363
2,026
(48)
76
(48)
2,006
357
369
61
-
1
-
62
59
-
1
-
60
2
2
61
-
1
-
62
59
-
1
-
60
2
2
Holders Technology plc | Annual Report & Accounts 2018 37
FINANCIAL STATEMENTS
Notes to the Financial Statements (continued)
15. Investments in subsidiaries
Cost
At 1 December 2016
At 1 December 2017
At 30 November 2018
Investments
at Cost
£’000
2,291
2,291
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
Country of incorporation
and operation
Germany
Holders Technology UK Limited England and Wales
Holders Components Limited
Opteon Limited
England and Wales
England and Wales
Nature of business
Specialised materials
and components
Specialised materials
and components
Dormant
Dormant
Interest in ordinary
shares & voting rights
100%
100%
100%
100%
16. Inventories
Raw materials and consumables
Goods for resale
17. 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
2018
£’000
1,474
1,375
2,849
2017
£’000
1,048
1,360
2,408
2018
£’000
-
-
-
Group
Company
2018
£’000
1,559
(31)
1,528
-
50
213
1,791
2017
£’000
1,799
(21)
1,778
-
102
392
2,272
2018
£’000
-
-
-
601
15
12
628
2017
£’000
-
-
-
2017
£’000
1
-
1
583
17
10
611
Holders Technology plc | Annual Report & Accounts 2018 38
FINANCIAL STATEMENTS
Notes to the Financial Statements (continued)
17. Trade and other receivables (continued)
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
18. Trade and other payables
Trade payables
Amounts due to Group undertakings
Other taxation and social security
Other payables
Accruals
2018
£’000
21
-
20
(5)
-
(5)
31
2018
£’000
224
33
3
-
-
260
Group
Company
2018
£’000
529
-
132
115
597
1,373
2017
£’000
755
-
319
159
442
1,675
2018
£’000
15
428
-
5
57
505
2017
£’000
9
-
17
(4)
(1)
-
21
2017
£’000
291
65
54
70
-
480
2017
£’000
18
318
-
-
36
372
Holders Technology plc | Annual Report & Accounts 2018 39
FINANCIAL STATEMENTS
Notes to the Financial Statements (continued)
19. 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 at amortised
cost
Financial liabilities
Trade and other payables
Financial liabilities at amortised cost
Derivatives
Liabilities at fair value through profit
and loss
Net financial assets
Group
2018
£’000
403
1,578
1,981
1,241
1,241
-
-
740
2017
£’000
579
1,880
2,459
1,356
1,356
-
-
1,103
Company
2018
£’000
2017
£’000
11
616
627
77
77
-
-
550
4
601
605
54
54
-
-
551
The carrying value of the Group’s financial assets and liabilities are considered to approximate their respective fair
values. The value of foreign exchange forward contracts has not been included as it is considered to be not
material.
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
Financial
liabilities
£’000
258
835
148
1,241
350
701
305
1,356
Net financial
assets /
(liabilities)
£’000
526
288
(74)
740
603
412
88
1,103
Company
Financial
liabilities
£’000
65
12
-
77
47
7
-
54
Net financial
assets /
(liabilities)
£’000
(50)
600
-
550
(41)
592
-
551
Financial
assets
£’000
15
612
-
627
6
599
-
605
Financial
assets
£’000
784
1,123
74
1,981
953
1,113
393
2,459
Sterling
Euro
US dollar
At 30 November 2018
Sterling
Euro
US dollar
At 30 November 2017
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 2018 40
FINANCIAL STATEMENTS
Notes to the Financial Statements (continued)
19. 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
US
dollar
£’000
Euro
£’000
Total
£’000
Euro
£’000
Company
US
dollar
£’000
-
-
Total
£’000
600
592
Sterling
At 30 November 2018
Sterling
304
(74)
230
600
At 30 November 2017
412
88
500
592
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, forward
foreign exchange contracts are only used to hedge the value of anticipated purchase orders to be placed in foreign
currencies.
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 19(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 £209,000 lower if sterling
strengthened by 10 per cent and £256,000 higher if sterling weakened by 10 per cent.
Holders Technology plc | Annual Report & Accounts 2018 41
FINANCIAL STATEMENTS
Notes to the Financial Statements (continued)
19. Financial instruments (continued)
Group
2018
Effect of sterling strengthening
by 10%
Effect of sterling weakening by
10%
Net financial assets/(liabilities)
As
reported
Rate
+10%
Profit
Equity
Rate
-10%
Profit
£’000
£’000
£’000
£’000
£’000
£’000
£’000
Equity
Denominated in sterling
Not denominated in sterling
Net financial assets
510
230
740
-
(21)
(21)
-
(27)
(27)
-
(209)
(209)
-
26
26
-
33
33
-
256
256
Effect of sterling strengthening by
10%
Effect of sterling weakening by
10%
2017
Net financial assets/(liabilities)
Denominated in sterling
Not denominated in sterling
Net financial assets
As
reported
£’000
603
500
1,103
Rate
+10%
£’000
-
(45)
(45)
Profit
£’000
-
(11)
(11)
Equity
£’000
-
(205)
(205)
Rate
-10%
£’000
-
56
56
Profit
£’000
-
11
11
Equity
£’000
-
205
205
Company
2018
Effect of sterling strengthening
Effect of sterling weakening by
by 10%
10%
Net financial assets/(liabilities)
As
reported
£’000
Rate
+10%
£’000
Profit
£’000
Equity
£’000
Rate
-10%
£’000
Profit
£’000
Equity
£’000
Denominated in sterling
Not denominated in sterling
Net financial assets
(50)
600
550
-
(55)
(55)
-
(55)
(55)
-
-
-
-
67
67
-
67
67
-
-
-
Effect of sterling strengthening
by 10%
Effect of sterling weakening by
2017
Net financial assets/(liabilities)
Denominated in sterling
Not denominated in sterling
Net financial assets
As
reported
£’000
(41)
592
551
Rate
+10%
£’000
-
(54)
(54)
Profit
£’000
-
(54)
(54)
Equity
£’000
-
-
-
Rate
-10%
£’000
-
66
66
10%
Profit
£’000
-
66
66
Equity
£’000
-
-
-
Holders Technology plc | Annual Report & Accounts 2018 42
FINANCIAL STATEMENTS
Notes to the Financial Statements (continued)
19. 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 19(b)). Based upon the interest rate profile of
the Group’s financial assets and liabilities as at both 30 November 2018 and 30 November 2017, 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 2018 amounting to £776,000 (2017: £1,373,000) 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
2018 amounted to £300,000 (2017: £100,000).
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
At 30 November
h) Capital risk
Group
Company
2018
£’000
717
861
1,578
2017
£’000
976
904
1,880
2018
£’000
15
601
616
2017
£’000
18
583
601
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 £605,000 at 30 November 2018 (2017:
£298,000). When appropriate during the year, contracts were taken out to mitigate trade payables denominated
in foreign currencies. The fair value of these instruments was £20,000 (2017: minus £2,000).
Holders Technology plc | Annual Report & Accounts 2018 43
FINANCIAL STATEMENTS
Notes to the Financial Statements (continued)
20. Retirement benefit liability
Group
At 1 December 2016
Currency translation
Change in actuarial assumptions
Utilised
At 1 December 2017
Currency translation
Change in actuarial assumptions
Utilised
At 30 November 2018
Retirement benefit liability
£’000
219
5
(2)
4
226
1
(27)
4
204
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. The assumptions are: discount rate 1.74%, salary increase 0.0%, rate of pension increase (every 3 years
5.25%).
No other Holders Technology employees have any retirement benefit rights from their previous employment at
Cimatec.
21. Deferred tax
Deferred tax is calculated in full on temporary differences under the liability method using tax rates of 19.0% to
30.0% (2017: 20.0% to 30.0%). The movement on the deferred tax asset account is as shown below:
At 1 December – net deferred tax assets
Income statement credit/(charge)
At 30 November
Group
Company
2018
£’000
9
(8)
1
2017
£’000
4
5
9
2018
£’000
-
-
-
2017
£’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 2016
Credited to income statement
At 30 November 2017
Charged to income statement
At 30 November 2018
Pension
liability
£’000
9
7
16
(6)
10
Total
£’000
9
7
16
(6)
10
Holders Technology plc | Annual Report & Accounts 2018 44
FINANCIAL STATEMENTS
Notes to the Financial Statements (continued)
21. Deferred tax (continued)
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.
Deferred tax liabilities
Group
At 1 December 2016
Transfer from income statement
At 30 November 2017
Transfer from income statement
At 30 November 2018
Deferred tax liabilities
Company
At 1 December 2016
Credited to income statement
At 30 November 2017
At 30 November 2018
The Company had no deferred tax assets.
22. Share Capital
Authorised
6,000,000 ordinary shares of 10p each (2017: 6,000,000)
Allotted and fully paid ordinary shares of 10p each
At 30 November 2017 and 30 November 2018
Accelerated
capital
allowances
£’000
5
2
7
2
9
Accelerated
capital
allowances
£’000
-
-
-
-
2018
£’000
600
2017
£’000
600
Number
of shares
Number
of shares
4,159,551
4,159,551
Holders Technology plc | Annual Report & Accounts 2018 45
FINANCIAL STATEMENTS
Notes to the Financial Statements (continued)
23. Employees and staff costs
Group
Company
Wages and salaries
Social security costs
Other pension costs
Share based payments
2018
£’000
1,875
321
119
-
2,315
2017
£’000
1,850
339
75
-
2,264
Average monthly number of permanent employees, including executive directors:
Group
Administration and sales
Service and fabrication
Part-time
Directors’ remuneration
2018
£’000
175
17
84
-
276
2018
Number
30
29
59
3
62
2017
£’000
157
21
48
-
226
2017
Number
31
29
60
3
63
Directors’ remuneration for the year was as follows:
Company
Basic salary fees, bonuses
and expenses
Benefits in
kind
Total emoluments
R W Weinreich (Chairman)
V M Blaisdell
P K I Geraghty
T G Bray
D A Mahony
£’000
15
95
56
95
18
279
£’000
4
-
2
-
-
6
2018
£’000
19
95
58
95
18
285
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
T G Bray
2018
£’000
22
63
2
87
2017
£’000
19
83
77
59
17
255
2017
£’000
22
26
2
50
Holders Technology plc | Annual Report & Accounts 2018 46
FINANCIAL STATEMENTS
Notes to the Financial Statements (continued)
23 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
T G Bray
The shareholdings are all beneficial.
Directors’ interests in share options
At start of
year or on
date of
appointment
30,172
100,000
120,000
100,000
350,172
No. of options
granted /
(exercised)
during year
-
-
-
-
-
T G Bray
T G Bray
V M Blaisdell
P K I Geraghty
Ordinary shares
2018
1,871,202
20,000
34,102
200,000
2017
1,871,202
20,000
34,102
200,000
No. of options
lapsed during
the year
At end of
year
Exercise
price
Date from
which
exercisable
Expiry
date
30,172
-
-
-
30,172
-
100,000
120,000
100,000
320,000
63.80p
30.00p
41.25p
41.25p
28/03/17
23/03/19
27/03/20
27/03/20
28/03/18
23/03/20
27/03/21
27/03/21
The share price at 30 November 2018 was 39.0p (2017: 32.0p) whilst during the year the high and low prices were
49.0p and 31.5p.
Key management compensation
Group
Short-term employee benefits
Post-employment benefits
Termination benefits
Share-based payments
Key management includes Directors and senior executives.
2018
£’000
481
89
-
-
570
2017
£’000
463
52
-
-
515
Holders Technology plc | Annual Report & Accounts 2018 47
FINANCIAL STATEMENTS
Notes to the Financial Statements (continued)
23 Employees and staff costs (continued)
Total share options in issue
Total options in issue 1 December
Issued during year
Lapsed
Forfeited
Leavers
Total options in issue 30 November
At the year-end no share options were exercisable.
24. Financial commitments
2018
No
400,172
-
(30,172)
-
-
370,000
2017
No
139,672
370,000
(109,500)
-
-
400,172
Capital commitments
As at 30 November 2018 the group had capital commitments for plant and machinery totalling £266,000 (2017:
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
2018
£’000
2017
£’000
192
223
-
13
12
-
-
190
559
-
15
17
-
-
25. Share based payments
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 twenty dealing days immediately preceding the date of grant, subject to relevant performance criteria, as
described in note 23, being satisfied.
Options to subscribe for ordinary shares of 10p each are as follows:
Holders Technology plc | Annual Report & Accounts 2018 48
FINANCIAL STATEMENTS
Notes to the Financial Statements (continued)
25. Share based payments (continued)
Subscription
Price
63.8p
30.0p
41.25p
Dates when exercisable
28 March 2017 to 28 March 2018
23 March 2019 to 23 March 2020
27 March 2020 to 27 March 2021
Number of shares
2018
-
150,000
220,000
2017
30,172
150,000
220,000
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
27 March
2017
37.50
41.25
2
220,000
3
13%
3
3.5
0.0%
1.6%
10.0%
75%
3p
23 December
2016
30.00
30.00
2
150,000
3
13%
3
3.5
0.0%
1.4%
10.0%
75%
4p
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 £4,000 charge (2017: £3,000 charge) related to equity-settled share-based payment
transactions during the year.
Holders Technology plc | Annual Report & Accounts 2018 49
AGM
Notes to the Financial Statements (continued)
26. Related party transactions (continued)
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
T G Bray
2018
£’000
9
-
-
1
10
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
2018
£’000
300
15
2017
£’000
9
-
-
1
10
2017
£’000
274
18
Holders Technology plc | Annual Report & Accounts 2018 50
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 the
Fairfax Suite, Cromwell Hotel, High Street, Old Stevenage, Hertfordshire SG1 3AZ on Monday 29 April 2019 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 2018.
To declare a final dividend in respect of the year ended 30 November 2018.
To re-elect R Weinreich 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 2020, 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 5 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 2018 51
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 2020 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 415,955 (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 2020, 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.
By order of the board
Paul Geraghty
Secretary
21 February 2019
Registered Office:
27-28 Eastcastle Street
London W1W 8DH
Holders Technology plc | Annual Report & Accounts 2018 52
AGM
Notice of Annual General Meeting (continued)
Notes
1.
2.
3.
4.
5.
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, Neville House,
Steelpark Road, Halesowen, B62 8HD not less than 48 hours (excluding non-working days) 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 Thursday 25
April 2019 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 Thursday 25
April 2019 shall be disregarded in determining the rights of any person to attend and vote at the meeting.
As at 21 February 2019 (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. The total voting rights in the Company as at 21 February 2019 are 4,159,551.
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 Thursday 25 April 2019. 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.
6.
The following documents are available for inspection at the office of the Company located at Holders
Technology UK Ltd., Unites 1-4, Block 9, Tweedbank Industrial Estate, Galashiels TD1 3RS 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 Director.
Holders Technology plc | Annual Report & Accounts 2018 53
AGM
Five-year summary
Group revenue – continuing
Group revenue – discontinued
2018
2017
2016
2014
2013
£’000
£’000
£’000
£’000
£’000
12,486
12,208
10,698
11,195
13,478
50
682
Gross profit
Distribution costs
3,266
3,205
2,660
2,799
3,254
(422)
(438)
(385)
(364)
(414)
Administrative expenses
(2,696)
(2,695)
(2,539)
(2,652)
(3,167)
Restructuring costs and impairment charges
Other operating income
Group operating profit/ (loss)
Finance income
Finance expenses
-
36
184
-
(7)
-
(7)
(116)
119
(25)
91
(67)
37
65
-
(11)
(261)
(151)
(357)
3
(7)
1
(16)
2
(7)
Profit/ (loss) before taxation from continuing operations
177
54
(265)
(166)
(362)
Tax credit/ (expense)
(8)
5
(17)
(195)
(11)
Profit/ (loss) after tax from continuing operations
Loss from discontinued operations
Profit/ (loss) for the year attributable to equity shareholders
169
59
(282)
(361)
(373)
-
169
(42)
17
(113)
(395)
-
-
(361)
(373)
Earnings per share – continuing business
Earnings per share – basic
Earnings per share - diluted
4.06p
4.03p
1.42p
(9.72p)
(9.16p)
(9.47p)
1.34p
(9.72p)
(9.16p)
(9.47p)
Dividends per share in respect of each year
0.75p
0.50p
0.50p
0.50p
1.25p
Equity attributable to shareholders of the parent
4,099
3,932
3,860
3,870
4,494
Holders Technology plc | Annual Report & Accounts 2018 54