Harbeth Audio Ltd. - Period Ending 2022-03-31

HARBETH AUDIO LTD. - Company Information

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Registration number: 03727963

Harbeth Audio Ltd.

Annual Report and Financial Statements

for the Year Ended 31 March 2022

Harbeth Audio Ltd.

Contents

Company Information	1
Balance Sheet	2
Notes to the Financial Statements	3 to 13

Harbeth Audio Ltd.

Company Information

Directors	Mr A Shaw Mr A J W Shaw Mrs R J Shaw Mr D A Shaw Ms L Shaw

Registered office

Unit 4 Lindfield Enterprise Park
Lewes Road
Lindfield
Haywards Heath
West Sussex
RH16 2LX

Auditors

Lucraft Hodgson & Dawes LLP
2/4 Ash Lane
Rustington
Littlehampton
West Sussex
BN16 3BZ

Harbeth Audio Ltd.

(Registration number: 03727963)
Balance Sheet as at 31 March 2022

	Note	2022 £	2021 £
Fixed assets
Tangible assets	5	287,587	283,089
Investment property	6	382,000	348,515
Other financial assets	7	15,639	8,833
		685,226	640,437
Current assets
Stocks	8	495,180	315,678
Debtors	9	161,782	160,257
Cash at bank and in hand		4,909,670	3,904,829
		5,566,632	4,380,764
Creditors: Amounts falling due within one year	10	(358,754)	(262,184)
Net current assets		5,207,878	4,118,580
Total assets less current liabilities		5,893,104	4,759,017
Provisions for liabilities		(14,195)	(6,093)
Net assets		5,878,909	4,752,924
Capital and reserves
Called up share capital	11	120	120
Profit and loss account		5,878,789	4,752,804
Shareholders' funds		5,878,909	4,752,924

These financial statements have been prepared in accordance with the special provisions relating to companies subject to the small companies regime within Part 15 of the Companies Act 2006.

These financial statements have been delivered in accordance with the provisions applicable to companies subject to the small companies regime and the option not to file the Profit and Loss Account has been taken.

Approved and authorised by the Board on 30 November 2022 and signed on its behalf by:

.........................................
Mr A Shaw
Director

Harbeth Audio Ltd.

Notes to the Financial Statements for the Year Ended 31 March 2022

1	General information

The company is a private company limited by share capital, incorporated in England & Wales.

The address of its registered office is:
Unit 4 Lindfield Enterprise Park
Lewes Road
Lindfield
Haywards Heath
West Sussex
RH16 2LX

These financial statements were authorised for issue by the Board on 30 November 2022.

2	Accounting policies

Summary of significant accounting policies and key accounting estimates

The principal accounting policies applied in the preparation of these financial statements are set out below. These policies have been consistently applied to all the years presented, unless otherwise stated.

Statement of compliance

These financial statements have been prepared in accordance with Financial Reporting Standard 102 Section 1A smaller entities - 'The Financial Reporting Standard applicable in the United Kingdom and Republic of Ireland' and the Companies Act 2006 (as applicable to companies subject to the small companies' regime).

Basis of preparation

These financial statements have been prepared using the historical cost convention except that as disclosed in the accounting policies certain items are shown at fair value.

These financial statements are presented in Sterling, which is also the company's functional currency. The financial statements are rounded to the nearest £1.

Audit report

The Independent Auditors' Report was unqualified. The name of the Senior Statutory Auditor who signed the audit report on 30 November 2022 was Adam Hickie FCA CTA, who signed for and on behalf of Lucraft Hodgson & Dawes LLP.

Harbeth Audio Ltd.

Notes to the Financial Statements for the Year Ended 31 March 2022

2	Accounting policies (continued)

Revenue recognition

Turnover comprises the fair value of the consideration received or receivable for the sale of goods and provision of services in the ordinary course of the company’s activities. Turnover is shown net of sales/value added tax, returns, rebates and discounts.

The company recognises revenue when:
The amount of revenue can be reliably measured;
it is probable that future economic benefits will flow to the entity;
and specific criteria have been met for each of the company's activities.

Government grants

Government grants are recognised when the company meets the relevant qualification criteria for the grant.

Foreign currency transactions and balances

Transactions in foreign currencies are initially recorded at the functional currency rate prevailing at the date of the transaction. Monetary assets and liabilities denominated in foreign currencies are retranslated into the respective functional currency of the entity at the rates prevailing on the reporting period date. Non-monetary items carried at fair value that are denominated in foreign currencies are retranslated at the rates prevailing on the initial transaction dates.

Non-monetary items measured in terms of historical cost in a foreign currency are not retranslated.

Tax

The tax expense for the period comprises current and deferred tax. Tax is recognised in profit or loss, except that a change attributable to an item of income or expense recognised as other comprehensive income is also recognised directly in other comprehensive income.

The current income tax charge is calculated on the basis of tax rates and laws that have been enacted or substantively enacted by the reporting date in the countries where the company operates and generates taxable income.

Deferred tax is recognised in respect of all timing differences between taxable profits and profits reported in the financial statements.

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

Deferred tax is measured using the tax rates and laws that have been enacted or substantively enacted by the reporting date and that are expected to apply to the reversal of the timing difference.

Tangible assets

Tangible assets are stated in the balance sheet at cost, less any subsequent accumulated depreciation and subsequent accumulated impairment losses.

The cost of tangible assets includes directly attributable incremental costs incurred in their acquisition and installation.

Harbeth Audio Ltd.

Notes to the Financial Statements for the Year Ended 31 March 2022

2	Accounting policies (continued)

Depreciation

Depreciation is charged so as to write off the cost of assets, other than land and properties under construction over their estimated useful lives, as follows:

Asset class	Depreciation method and rate
Freehold property	2% straight line
Plant and machinery	20% straight line
Fixtures and fittings	20% straight line
Office equipment	25% straight line

Investment property

Investment property is carried at fair value, derived from the current market prices for comparable real estate determined annually by external valuers. The valuers use observable market prices, adjusted if necessary for any difference in the nature, location or condition of the specific asset. Changes in fair value are recognised in profit or loss.

Cash and cash equivalents

Cash and cash equivalents comprise cash on hand and call deposits, and other short-term highly liquid investments that are readily convertible to a known amount of cash and are subject to an insignificant risk of change in value.

Trade debtors

Trade debtors are amounts due from customers for merchandise sold or services performed in the ordinary course of business.

Trade debtors are recognised initially at the transaction price. They are subsequently measured at amortised cost using the effective interest method, less provision for impairment. A provision for the impairment of trade debtors is established when there is objective evidence that the company will not be able to collect all amounts due according to the original terms of the receivables.

Stocks

Stocks are stated at the lower of cost and estimated selling price less costs to complete and sell. Cost is determined using the first-in, first-out (FIFO) method.

The cost of finished goods and work in progress comprises direct materials and, where applicable, direct labour costs and those overheads that have been incurred in bringing the inventories to their present location and condition. At each reporting date, stocks are assessed for impairment. If stocks are impaired, the carrying amount is reduced to its selling price less costs to complete and sell; the impairment loss is recognised immediately in profit or loss.

Harbeth Audio Ltd.

Notes to the Financial Statements for the Year Ended 31 March 2022

2	Accounting policies (continued)

Trade creditors

Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Accounts payable are classified as current liabilities if the company does not have an unconditional right, at the end of the reporting period, to defer settlement of the creditor for at least twelve months after the reporting date. If there is an unconditional right to defer settlement for at least twelve months after the reporting date, they are presented as non-current liabilities.

Trade creditors are recognised initially at the transaction price and subsequently measured at amortised cost using the effective interest method.

Borrowings

Interest-bearing borrowings are initially recorded at fair value, net of transaction costs. Interest-bearing borrowings are subsequently carried at amortised cost, with the difference between the proceeds, net of transaction costs, and the amount due on redemption being recognised as a charge to the profit and loss account over the period of the relevant borrowing.

Interest expense is recognised on the basis of the effective interest method and is included in interest payable and similar charges.

Borrowings are classified as current liabilities unless the company has an unconditional right to defer settlement of the liability for at least twelve months after the reporting date.

Leases

Leases in which substantially all the risks and rewards of ownership are retained by the lessor are classified as operating leases. Payments made under operating leases are charged to profit or loss on a straight-line basis over the period of the lease.

Share capital

Ordinary shares are classified as equity. Equity instruments are measured at the fair value of the cash or other resources received or receivable, net of the direct costs of issuing the equity instruments. If payment is deferred and the time value of money is material, the initial measurement is on a present value basis.

Dividends

Dividend distribution to the company’s shareholders is recognised as a liability in the financial statements in the reporting period in which the dividends are declared.

Defined contribution pension obligation

A defined contribution plan is a pension plan under which fixed contributions are paid into a pension fund and the company has no legal or constructive obligation to pay further contributions even if the fund does not hold sufficient assets to pay all employees the benefits relating to employee service in the current and prior periods.

Contributions to defined contribution plans are recognised as employee benefit expense when they are due. If contribution payments exceed the contribution due for service, the excess is recognised as a prepayment.

Harbeth Audio Ltd.

Notes to the Financial Statements for the Year Ended 31 March 2022

2	Accounting policies (continued)

Financial instruments

Classification
The company only enters into basic financial instruments transactions that result in the recognition of financial assets and liabilities such as trade and other accounts receivable and payable, loans from banks and other third parties, loans to related parties and investments in non-puttable ordinary shares.
Recognition and measurement
Debt instruments (other than those wholly repayable or receivable within one year), including loans and other accounts receivable and payable, are initially measured at the present value of the future cash flows and subsequently at amortised costs using the effective interest method.

Debt instruments that are payable or receivable within one year, typically trade payables or receivables, are measured, initially and subsequently, at the undiscounted amount of the cash or other consideration expected to be paid or received. However, if the arrangements of a short term instrument constitute a financing transaction, such as the payment of a trade debt deferred beyond normal business terms or financed at a rate of interest that is not a market rate or in case off an outright short term loan not at market rate, the financial asset or liability is measured, initially, at the present value of the future cash flow, discounted at a market rate of interest for a similar debt instrument and subsequently at amortised cost.
Impairment
Financial assets that are measured at cost and amortised cost are assessed at the end of each reporting period for objective evidence of impairment. If evidence of impairment is found, an impairment loss is recognised in the income statement.

For financial assets measured at amortised cost, the impairment loss is measured as the difference between an asset's carrying amount and the present value of estimated cash flows discounted at the asset's original effective interest rate. If a financial asset has a variable interest rate, the discount rate for measuring any impairment loss is the current effective interest rate determined under the contract.

For financial assets measured at cost less impairment, the impairment loss is measured as the difference between an asset's carrying value and best estimate, which is an approximation of the amount that the company would receive for the asset if it were to be sold at the reporting date.

Financial assets and liabilities are offset and the net amount reported in the statement of financial position when there is an enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously.

3	Staff numbers

The average number of persons employed by the company (including directors) during the year, was 14 (2021 - 15).

4	Profit before tax

Arrived at after charging/(crediting)

Harbeth Audio Ltd.

Notes to the Financial Statements for the Year Ended 31 March 2022

4	Profit before tax (continued)

	2022 £	2021 £
Depreciation expense	18,109	40,117

5	Tangible assets

	Land and buildings £	Furniture, fittings and equipment £	Other tangible assets £	Total £
Cost or valuation
At 1 April 2021	294,834	59,143	108,530	462,507
Additions	-	1,382	21,226	22,608
At 31 March 2022	294,834	60,525	129,756	485,115
Depreciation
At 1 April 2021	47,357	45,403	86,658	179,418
Charge for the year	5,897	5,778	6,435	18,110
At 31 March 2022	53,254	51,181	93,093	197,528
Carrying amount
At 31 March 2022	241,580	9,344	36,663	287,587
At 31 March 2021	247,477	13,740	21,872	283,089

Included within the net book value of land and buildings above is £241,580 (2021 - £247,477) in respect of freehold land and buildings.

6	Investment properties

	2022 £
At 1 April	348,515
Fair value adjustments	33,485
At 31 March	382,000

The fair value of investment property has been determined using online tools and market datat. The director considers this to be a fair representation of fair value.

There has been no valuation of investment property by an independent valuer.

Harbeth Audio Ltd.

Notes to the Financial Statements for the Year Ended 31 March 2022

7	Other financial assets (current and non-current)

	2022 £	2021 £
Non-current financial assets
Listed investments	15,639	8,833
	15,639	8,833

	Financial assets at fair value through profit and loss £	Total £
Non-current financial assets
Cost or valuation
At 1 April 2021	8,833	8,833
Fair value adjustments	6,806	6,806
At 31 March 2022	15,639	15,639
Impairment
Carrying amount
At 31 March 2022	15,639	15,639
At 31 March 2021	8,833	8,833

Stocks

	2022 £	2021 £
Stocks	495,180	315,678
	495,180	315,678

Harbeth Audio Ltd.

Notes to the Financial Statements for the Year Ended 31 March 2022

Debtors

Current

2022
£

2021
£

Trade debtors

22,821

56,691

Prepayments

101,111

100,959

Other debtors

37,850

2,607

161,782

160,257

Creditors

Creditors: amounts falling due within one year

	Note	2022 £	2021 £
Due within one year
Loans and borrowings	13	686	236
Trade creditors		96,127	74,381
Taxation and social security		220,407	111,952
Accruals and deferred income		20,599	4,728
Other creditors		20,935	70,887
		358,754	262,184

Harbeth Audio Ltd.

Notes to the Financial Statements for the Year Ended 31 March 2022

11	Share capital

Allotted, called up and fully paid shares

2022

2021

No.

Ordinary of £1 each

120

Reserves

Non-distributable reserves

Included within the profit and loss account are non-distributable amounts of £- (2021: £-) which represent increases in the fair value of investment property.

13	Loans and borrowings

	2022 £	2021 £
Current loans and borrowings
Other borrowings	686	236
	686	236

14	Related party transactions

Transactions with directors

Harbeth Audio Ltd.

Notes to the Financial Statements for the Year Ended 31 March 2022

14	Related party transactions (continued)

Directors' remuneration

The directors' remuneration for the year was as follows:

	2022 £	2021 £
Remuneration	51,806	49,450
Contributions paid to money purchase schemes	-	185,903
	51,806	235,353

Loans from related parties

2022	Key management £	Total £
At start of period	241	241
Advanced	445	445
At end of period	686	686

2021	Key management £	Total £
At start of period	95	95
Advanced	28,203	28,203
Repaid	(28,057)	(28,057)
At end of period	241	241

Terms of loans from related parties

Loans to directors are unsecured, non-interest bearing and repayable on demand.

Harbeth Audio Ltd.

Notes to the Financial Statements for the Year Ended 31 March 2022

15	Financial instruments

Categorisation of financial instruments

	2022 £	2021 £
Financial assets measured at fair value through profit or loss	15,639	8,833
	15,639	8,833

Financial assets measured at fair value

Listed investments
Fair value of listed investments is based upon the stated price for those shares at the year end.
The above basis for fair value assumes that the company could achieve the publicly stated selling price on that day.
The fair value is £15,639 (2021 - £8,833) and the change in value included in profit or loss is £6,806 (2021 - £7,357).

Items of income, expense, gains or losses

2022	Income £	Expense £	Net gains £	Net losses £
Financial assets measured at fair value through profit or loss	6,806	-	-	-

2021	Income £	Expense £	Net gains £	Net losses £
Financial assets measured at fair value through profit or loss	7,357	-	-	-

The total interest income for financial assets not measured at fair value through profit or loss is £906 (2021 - £6,941).

Impairment

Other financial assets
The amount of the impairment loss during the year is £Nil (2021 - £Nil).