REGISTERED NUMBER: |
Hi-Wire Limited |
Strategic Report, Report of the Directors and |
Financial Statements |
for the Year Ended 31 December 2022 |
REGISTERED NUMBER: |
Hi-Wire Limited |
Strategic Report, Report of the Directors and |
Financial Statements |
for the Year Ended 31 December 2022 |
Hi-Wire Limited (Registered number: 03512877) |
Contents of the Financial Statements |
for the year ended 31 December 2022 |
Page |
Company Information | 1 |
Strategic Report | 2 |
Report of the Directors | 4 |
Report of the Independent Auditors | 6 |
Income Statement | 10 |
Other Comprehensive Income | 11 |
Balance Sheet | 12 |
Statement of Changes in Equity | 13 |
Notes to the Financial Statements | 14 |
Hi-Wire Limited |
Company Information |
for the year ended 31 December 2022 |
DIRECTORS: |
SECRETARY: |
REGISTERED OFFICE: |
REGISTERED NUMBER: |
AUDITORS: |
Chartered Accountants & Statutory Auditor |
33 George Street |
Wakefield |
West Yorkshire |
WF1 1LX |
BANKERS: |
1 Churchill Place |
Leicester |
LE87 2BB |
Hi-Wire Limited (Registered number: 03512877) |
Strategic Report |
for the year ended 31 December 2022 |
PRINCIPAL ACTIVITY |
The principal activities of the company in the year were the manufacture of covered copper strips, and the distribution of the wider Essex group copper products, and other associated non group ancillary items. |
BUSINESS MODEL |
The business seeks to provide a complete manufacturing and distribution solution to the electro mechanical industry. By holding the largest stock in the industry we can offer next day delivery on a wide range of products and our manufacturing unit allows us to produce bespoke jobs at short notice. |
BUSINESS REVIEW |
A solid customer base and a strong market share means we are well positioned to continue our strategy of maintaining margins and controlling operational costs of the business. The continuing investments in plant and machinery have improved the efficiency of the company's manufacturing facilities |
The business turnover (which includes the price of metal) increased to £14,542K (2021: £11,827K). |
KEY PERFORMANCE INDICATORS |
Being fully vertically integrated in the Essex group relieves certain pressures on local KPI's, and stability of sales margin % to Sales (excluding metal), stock levels and debtor days are the main overall financial indicators. |
2022 | 2021 | 2020 | Measure |
Margin % | 42.7 | 40.1 | 40.1 | Gross margin% against sales value (excluding metal) |
Stock (months) | 4.17 | 3.96 | 4.78 | Copper Inventory turns (months) |
Debtor days | 60.0 | 59.0 | 62.0 | Average debtor payment days |
Whilst supply constraints diminished, cost increases continued throughout the year. Instability primarily came from direct energy costs but also indirectly through its impact on logistics at every level within the supply chain. Price increases to match our cost increases were in the main applied. Overall Sales Margin improved as we also diversified our offerings, focusing on a significant increase in sales of our group's more bespoke products. With this and a level of stability following changes in customs rules driven by Brexit the gross margin % improved overall. Debtor days stayed within the expected range and the change in customer mix had no significant impact. Inventory turns increased slightly overall even though we ran at higher levels due to supply changes and the increase in factory minimum order quantities which were used to counter longer lead times as the group's factories quickly filled as globally the market accelerated despite geopolitical impacts. Our normal levels of service were difficult at times and these aspects of the business were a challenge throughout the year. |
FUTURE PROSPECTS |
With COVID-19 and supply chain constraints behind us and ongoing cost increases and a cost of living crisis (driven mainly by the impacts of the Ukraine conflict) it means that we are forced to monitor every aspect of the business continually. As a result we find we cannot fully predict the effect these events will have on our customer base and the demand for our products. We continue to believe that our best strategy for success is strong price management and continued expansion of our product range into higher value streams, which combined allowed us to yield operational profits in 2022. |
Hi-Wire Limited (Registered number: 03512877) |
Strategic Report |
for the year ended 31 December 2022 |
PRINCIPAL RISKS AND UNCERTAINTIES |
The underlying principal risks to the business remain. With the development of new emerging markets and competitors in relation to our customer base, new technologies and fluctuations in commodity prices. The price of copper is currently high partly due to it being traded in USD and GBP remains toward the lower end of its historic exchange rate range which also adds additional cash flow pressures into the supply chain. The situation in Europe may escalate with Ukraine and Russia, impacting availability and pricing stability yet further, especially in commodities and energy. Also, the added indirect impact on cost of living increases add to the real risk of spiralling wage growth for all companies and resulting in potential difficulty in staff replacement. We continue to mitigate these risks as they arise by addressing any pricing and supply chain issues directly, continuing to seek out new customers and offering a wider range of products and maintaining salary levels in line with the market. |
With our distribution business having operated for 4 decades and our manufacturing business for many more we believe we have the experience to manage changes in commodity prices. The directors do not believe credit risk to be included in the principal risks to the business given that any funding requirements are primarily provided by Group undertakings and trade debtors are insured to acceptable levels. |
The short term geopolitical and economic effects of Energy Costs / Conflict in Europe cannot be forecast however at this time and therefore our performance will ultimately depend on the economic impact on our customer base. The directors continue to monitor the situation closely and review potential risks to the company |
ON BEHALF OF THE BOARD: |
Hi-Wire Limited (Registered number: 03512877) |
Report of the Directors |
for the year ended 31 December 2022 |
The directors present their report with the financial statements of the company for the year ended 31 December 2022. |
DIVIDENDS |
No dividends will be distributed for the year ended 31 December 2022. |
DIRECTORS |
Other changes in directors holding office are as follows: |
DIRECTORS INDEMNITIES |
The company has made qualifying third party indemnity provisions for the benefit of its directors which were made during the year and remain in force at the date of this report. |
GOING CONCERN |
The Company had net assets at the end of 2022 however it has an intercompany cash funding arrangement in place with Superior Essex Inc. which has been used for additional working capital requirements. Superior Essex Inc. indirectly hold 100% of the equity in Hi-Wire Ltd |
When making their assessment of the company's ability to continue as a Going Concern, the directors acknowledge that specific uncertainties exist over profitability and availability of funds. However, after considering the intercompany funding arrangement with Superior Essex Inc. the directors of Hi-Wire Limited have a reasonable expectation that the company has adequate resources to continue in operational existence for the foreseeable future. Thus, they continue to adopt the going concern basis of accounting in preparing the financial statements. |
STATEMENT OF DIRECTORS' RESPONSIBILITIES |
The directors are responsible for preparing the Strategic Report, the 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 United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the company and of the profit or loss of the company for that period. In preparing these financial statements, the directors are required to: |
- | select suitable accounting policies and then apply them consistently; |
- | make judgements and accounting estimates that are reasonable and prudent; |
- | prepare the financial statements on the going concern basis unless it is inappropriate to presume that the company will continue in business. |
The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the company's transactions and disclose with reasonable accuracy at any time the financial position of the company and enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities. |
STATEMENT AS TO DISCLOSURE OF INFORMATION TO AUDITORS |
So far as the directors are aware, there is no relevant audit information (as defined by Section 418 of the Companies Act 2006) of which the company's auditors are unaware, and each director has taken all the steps that he ought to have taken as a director in order to make himself aware of any relevant audit information and to establish that the company's auditors are aware of that information. |
Hi-Wire Limited (Registered number: 03512877) |
Report of the Directors |
for the year ended 31 December 2022 |
AUDITORS |
The auditors, SMH Jolliffe Cork Audit Ltd, will be proposed for re-appointment at the forthcoming Annual General Meeting. |
ON BEHALF OF THE BOARD: |
Report of the Independent Auditors to the Members of |
Hi-Wire Limited |
Opinion |
We have audited the financial statements of Hi-Wire Limited (the 'company') for the year ended 31 December 2022 which comprise the Income Statement, Other Comprehensive Income, Balance Sheet, Statement of Changes in Equity and Notes to the Financial Statements, including a summary of significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland' (United Kingdom Generally Accepted Accounting Practice). |
In our opinion the financial statements: |
- | give a true and fair view of the state of the company's affairs as at 31 December 2022 and of its profit for the year then ended; |
- | have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and |
- | have been prepared in accordance with the requirements of the Companies Act 2006. |
Basis for opinion |
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditors' responsibilities for the audit of the financial statements section of our report. We are independent of the company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC's Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. |
Conclusions relating to going concern |
In auditing the financial statements, we have concluded that the directors' use of the going concern basis of accounting in the preparation of the financial statements is appropriate. |
Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the company's ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue. |
Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report. |
Other information |
The directors are responsible for the other information. The other information comprises the information in the Strategic Report and the Report of the Directors, but does not include the financial statements and our Report of the Auditors 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 this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard. |
Opinions on other matters prescribed by the Companies Act 2006 |
In our opinion, based on the work undertaken in the course of 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. |
Report of the Independent Auditors to the Members of |
Hi-Wire Limited |
Matters on which we are required to report by exception |
In the light of the knowledge and understanding of the company and its environment obtained in the course of the audit, we have not identified material misstatements in the Strategic Report or the Report of the Directors. |
We have nothing to report in respect of the following matters where the Companies Act 2006 requires us to report to you if, in our opinion: |
- | adequate accounting records have not been kept, or returns adequate for our audit have not been received from branches not visited by us; or |
- | the financial statements are not in agreement with the accounting records and returns; or |
- | certain disclosures of directors' remuneration specified by law are not made; or |
- | we have not received all the information and explanations we require for our audit. |
Responsibilities of directors |
As explained more fully in the Statement of Directors' Responsibilities set out on page four, 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 necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. |
In preparing the financial statements, the directors are responsible for assessing the company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the company or to cease operations, or have no realistic alternative but to do so. |
Report of the Independent Auditors to the Members of |
Hi-Wire Limited |
Auditors' 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 a Report of the Auditors 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. |
The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below: |
Our approach to identifying and assessing the risks of material misstatements in respect of irregularities, including fraud and non-compliance with laws and regulations, was as follows: |
- the engagement principal ensured that the engagement team collectively had the appropriate competence, capabilities and skills to identify or recognise non-compliance with applicable laws and regulations; |
- we identified the laws and regulations applicable to the company through discussions with the Directors and other informed management which we considered may have a direct material effect on the financial statements or the operations of the company and thereafter, the audit team remained alert to instances of non-compliance throughout the audit. |
We assessed the susceptibility of the company's financial statements to material misstatement, including obtaining an understanding of how fraud might occur, by: |
- making enquiries of management as to where they considered there was susceptibility to fraud, their knowledge of actual, suspected and alleged fraud and; |
- considering the internal controls in place to mitigate risks of fraud and non-compliance with laws and regulations. |
To address the risk of fraud through management bias and override of controls, we: |
- performed analytical procedures to identify any unusual or unexpected relationships; |
- tested journal entries to identify unusual transactions; |
- assessed whether judgements and assumptions made in determining the accounting estimates were indicative of potential bias; and investigated the rationale behind significant or unusual transactions. |
In response to the risk of irregularities and non-compliance with laws and regulations, we designed procedures which included, but were not limited to: |
- agreeing financial statement disclosures to underlying supporting documentation; |
- enquiring of management as to actual and potential litigation and claims and reviewing correspondence with HMRC and the company's legal and professional advisors. |
There are inherent limitations in our audit procedures described above. The more removed that laws and regulations are from financial transactions, the less likely it is that we would become aware of non-compliance. Auditing standards also limit the audit procedures required to identify non-compliance with laws and regulations to enquiry of the directors and other management and the inspection of regulatory and legal correspondence, if any. |
Material misstatements that arise due to fraud can be harder to detect than those that arise from error as they may involve deliberate concealment or collusion. |
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 Report of the Auditors. |
Report of the Independent Auditors to the Members of |
Hi-Wire Limited |
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 a Report of the Auditors and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company's members as a body, for our audit work, for this report, or for the opinions we have formed. |
for and on behalf of |
Chartered Accountants & Statutory Auditor |
33 George Street |
Wakefield |
West Yorkshire |
WF1 1LX |
Hi-Wire Limited (Registered number: 03512877) |
Income Statement |
for the year ended 31 December 2022 |
2022 | 2021 |
Notes | £ | £ | £ | £ |
TURNOVER | 4 |
Cost of sales |
GROSS PROFIT |
Distribution costs |
Administrative expenses |
2,501,521 | 2,243,946 |
237,628 | 497,800 |
Other operating income |
OPERATING PROFIT | 6 |
Other finance income | 18 |
340,403 | 662,956 |
Interest payable and similar expenses | 8 |
PROFIT BEFORE TAXATION |
Tax on profit | 9 | ( |
) |
PROFIT FOR THE FINANCIAL YEAR |
Hi-Wire Limited (Registered number: 03512877) |
Other Comprehensive Income |
for the year ended 31 December 2022 |
2022 | 2021 |
Notes | £ | £ |
PROFIT FOR THE YEAR |
OTHER COMPREHENSIVE INCOME |
Actuarial (loss)/ gain recognised | ( |
) |
Income tax relating to other comprehensive income |
( |
) |
OTHER COMPREHENSIVE INCOME FOR THE YEAR, NET OF INCOME TAX |
( |
) |
TOTAL COMPREHENSIVE INCOME FOR THE YEAR |
( |
) |
Hi-Wire Limited (Registered number: 03512877) |
Balance Sheet |
31 December 2022 |
2022 | 2021 |
Notes | £ | £ | £ | £ |
FIXED ASSETS |
Intangible assets | 10 |
Tangible assets | 11 |
CURRENT ASSETS |
Stocks | 12 |
Debtors | 13 |
Cash at bank |
CREDITORS |
Amounts falling due within one year | 14 |
NET CURRENT ASSETS |
TOTAL ASSETS LESS CURRENT LIABILITIES |
PENSION ASSET | 18 |
NET ASSETS |
CAPITAL AND RESERVES |
Called up share capital | 16 |
Share premium | 17 |
Capital contribution reserve | 17 |
Retained earnings | 17 | ( |
) | ( |
) |
SHAREHOLDERS' FUNDS |
The financial statements were approved by the Board of Directors and authorised for issue on |
Hi-Wire Limited (Registered number: 03512877) |
Statement of Changes in Equity |
for the year ended 31 December 2022 |
Called up | Capital |
share | Retained | Share | contribution | Total |
capital | earnings | premium | reserve | equity |
£ | £ | £ | £ | £ |
Balance at 1 January 2021 | ( |
) |
Changes in equity |
Total comprehensive income | - | - |
Balance at 31 December 2021 | ( |
) |
Changes in equity |
Total comprehensive income | - | ( |
) | - | ( |
) |
Balance at 31 December 2022 | ( |
) |
Hi-Wire Limited (Registered number: 03512877) |
Notes to the Financial Statements |
for the year ended 31 December 2022 |
1. | STATUTORY INFORMATION |
Hi-Wire Limited is a |
The functional and presentation currency of the financial statements is considered to be whole pounds sterling because that is the currency of the primary economic environment in which the Company operates. |
2. | ACCOUNTING POLICIES |
Basis of preparing the financial statements |
These financial statements are prepared under the historical cost convention, as modified for the valuation of copper stock, and in accordance with Financial Reporting Standard 102 (FRS 102) issued by the Financial Reporting Council. |
Hi-Wire Limited meets the definition of a qualifying entity under FRS 102 paragraph 1.12 and has therefore taken advantage of the disclosure exemptions available to it in respect of its separate financial statements. Hi-Wire Limited is consolidated in the financial statements of its parent, LS Corp, which may be obtained as outlined in note 20. Exemptions have been taken in these separate Company financial statements in relation to presentation of a cash flow statement, related party transactions and remuneration of key management personnel. |
Financial Reporting Standard 102 - reduced disclosure exemptions |
The company has taken advantage of the following disclosure exemptions in preparing these financial statements, as permitted by FRS 102 "The Financial Reporting Standard applicable in the UK and Republic of Ireland": |
• | the requirements of Section 7 Statement of Cash Flows; |
• | the requirements of paragraphs 11.42, 11.44, 11.45, 11.47, 11.48(a)(iii), 11.48(a)(iv), 11.48(b) and 11.48(c); |
• | the requirements of paragraphs 12.26, 12.27, 12.29(a), 12.29(b) and 12.29A; |
• | the requirement of paragraph 33.7. |
Turnover |
Turnover is measured at the fair value of the consideration received or receivable, excluding discounts, rebates, value added tax and other sales taxes. |
Turnover represents the amounts receivable for goods provided in the normal course of business when the significant risks and benefits of ownership of the product have transferred to the buyer which is typically on despatch of goods. |
Intangible assets |
Intangible assets are initially measured at cost. After initial recognition, intangible assets are measured at cost less any accumulated amortisation or impairment losses. |
Intangible assets consist of a distribution agreement with AEV Limited that has now been fully amortised. |
Hi-Wire Limited (Registered number: 03512877) |
Notes to the Financial Statements - continued |
for the year ended 31 December 2022 |
2. | ACCOUNTING POLICIES - continued |
Tangible fixed assets |
Freehold land & buildings | - |
Improvements to property | - |
Plant and machinery | - |
Computer equipment | - |
Land included within Freehold land & buildings is held at cost and is not depreciated. The value of land as at 31 December 2022 was £503,116 (2021: £503,116). |
Residual value is calculated on prices prevailing at the date of acquisition. |
Stocks |
Stocks and work in progress are stated at the lower of cost and net realisable value. Cost incurred in bringing each product to its present location and condition are based on purchase cost including transport, plus a reasonable proportion of production overheads based on normal levels of activity. The majority of stock such as copper is valued at the lower of cost and the published London Metal Exchange (LME) rate. Net realisable value is based on estimated normal selling price, less further costs expected to be incurred to completion and disposal. Provision is made for obsolete, slow- moving or defective items where appropriate. |
Financial assets and liabilities |
All financial assets and liabilities are initially measured at transaction price (including transaction costs), except for those financial assets classified as at fair value through profit or loss, which are initially measured at fair value (which is normally the transaction price excluding transaction costs), unless the arrangement constitutes a financing transaction. If an arrangement constitutes a financing transaction, the financial asset or financial liability is measured at the present value of the future payments discounted at a market rate of interest for a similar debt instrument. |
Financial assets and liabilities are only offset in the balance sheet when and only when there exists a legally enforceable right to set off the recognised amounts and the company intends either to settle on a net basis, or to realise the asset and settle the liability simultaneously. |
Financial assets are derecognised when and only when; a) the contractual rights to the cash flows from the financial asset expire or are settled, b) the company transfers to another party substantially all of the risks and rewards of ownership of the financial asset, or, c) the company, despite having retained some, but not all, significant risks and rewards of ownership, has transferred control of the asset to another party. |
Financial liabilities are derecognised only when the obligation specified in the contract is discharged, cancelled or expires. |
Foreign currencies |
Assets and liabilities in foreign currencies are translated into sterling at the rate of exchange ruling at the balance sheet date. Transactions in foreign currencies are translated into sterling at the rate of exchange ruling at the date of transaction. Exchange rate differences are taken into account in arriving at the operating result. |
Hi-Wire Limited (Registered number: 03512877) |
Notes to the Financial Statements - continued |
for the year ended 31 December 2022 |
2. | ACCOUNTING POLICIES - continued |
Taxation |
Taxation for the year comprises current and deferred tax. Tax is recognised in the Income Statement, except to the extent that it relates to items recognised in other comprehensive income or directly in equity. |
Current or deferred taxation assets and liabilities are not discounted. |
Current tax is recognised at the amount of tax payable using the tax rates and laws that have been enacted or substantively enacted by the balance sheet date. |
Deferred tax |
Deferred tax is recognised in respect of all timing differences that have originated but not reversed at the balance sheet date. |
Timing differences arise from the inclusion of income and expenses in tax assessments in periods different from those in which they are recognised in financial statements. Deferred tax is measured using tax rates and laws that have been enacted or substantively enacted by the year end and that are expected to apply to the reversal of the timing difference. |
Unrelieved tax losses and other deferred tax assets are recognised only to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits. |
Hire purchase and leasing commitments |
Rentals paid under operating leases are charged to profit or loss on a straight line basis over the period of the lease. |
Pensions |
The company operates a defined benefit scheme. Further details are provided in Note 18 to the financial statements. |
The amounts charged to operating profit are the current service costs and gains and losses on settlements and curtailments. They are included as part of staff costs. Past service costs are recognised immediately in the profit and loss account if the benefits have vested. If the benefits have not vested immediately, the costs are recognised over the period until vesting occurs. The interest cost and the expected return on assets are shown as a net amount of other finance costs or credits adjacent to interest. Actuarial gains and losses are recognised immediately in the statement of comprehensive income. |
Defined pension schemes are funded, with the assets of the scheme held separately from those of the company in separate trustee administered funds. Pension scheme assets are measured at fair value and liabilities are measured on an actuarial basis using the projected unit method and discounted at a rate equivalent to the current rate of return on a high quality corporate bond of equivalent currency and term to the scheme liabilities. The actuarial valuations are obtained at least triennially and are updated at each balance sheet date. The resulting defined benefit asset or liability, net of related deferred tax, is presented separately after other net assets on the face of the balance sheet. |
The company also operates a defined contribution pension scheme. Contributions payable to the company's pension scheme are charged to profit or loss in the period to which they relate. |
Provisions |
Provisions are recognised when the company has a present obligation (legal or constructive) as a result of a past event, it is probable that the company will be required to settle that obligation and reliable estimate can be made of the amount of the obligation. The amount recognised as a provision is the best estimate of the consideration required to settle the present obligation at the balance sheet date, taking into account the risks and uncertainties surrounding the obligation. |
Hi-Wire Limited (Registered number: 03512877) |
Notes to the Financial Statements - continued |
for the year ended 31 December 2022 |
3. | CRITICAL ACCOUNTING JUDGEMENTS AND KEY SOURCES OF ESTIMATION UNCERTAINTY |
In the application of the Group's accounting policies, which are described in note 2, the directors are required to make judgements, estimates and assumptions about the carrying amounts of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates. |
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised if the revision affects only that period, or in the period of the revision and future periods if the revision affects both current and future periods. |
Critical judgements in applying the company's accounting policies |
The following are the critical judgements and estimates that the directors have made in the process of applying the Company's accounting policies and that have the most significant effect on the amounts recognised in the financial statements. |
The accounting surplus on the defined benefit pension scheme is calculated based on a number of key assumptions. These assumptions form key judgements and estimates which impact the defined benefit disclosures and the level of surplus recognised. Details of the assumptions are shown in Note 18. |
4. | TURNOVER |
The turnover and profit before taxation are attributable to the principal activities of the company. |
An analysis of turnover by geographical market is given below: |
2022 | 2021 |
£ | £ |
United Kingdom |
Overseas, principally Europe | 2,039,445 | 1,641,064 |
5. | EMPLOYEES AND DIRECTORS |
2022 | 2021 |
£ | £ |
Wages and salaries |
Social security costs |
Other pension costs |
The average number of employees during the year was as follows: |
2022 | 2021 |
Management and directors | 3 | 3 |
Production | 10 | 9 |
Administration | 15 | 17 |
Hi-Wire Limited (Registered number: 03512877) |
Notes to the Financial Statements - continued |
for the year ended 31 December 2022 |
5. | EMPLOYEES AND DIRECTORS - continued |
2022 | 2021 |
£ | £ |
Directors' remuneration |
Directors' pension contributions to money purchase schemes |
The number of directors to whom retirement benefits were accruing was as follows: |
Money purchase schemes |
6. | OPERATING PROFIT |
The operating profit is stated after charging: |
2022 | 2021 |
£ | £ |
Hire of plant and machinery |
Other operating leases |
Depreciation - owned assets |
Foreign exchange differences |
7. | AUDITORS' REMUNERATION |
Fees payable to SMH Jolliffe Cork Audit Ltd for the audit of the company's annual financial statements were £17,950 (2021: £16,995). |
8. | INTEREST PAYABLE AND SIMILAR EXPENSES |
2022 | 2021 |
£ | £ |
On intercompany balance |
9. | TAXATION |
Analysis of the tax charge/(credit) |
The tax charge/(credit) on the profit for the year was as follows: |
2022 | 2021 |
£ | £ |
Deferred tax | ( |
) |
Tax on profit | ( |
) |
UK corporation tax has been charged at 19% . |
Hi-Wire Limited (Registered number: 03512877) |
Notes to the Financial Statements - continued |
for the year ended 31 December 2022 |
9. | TAXATION - continued |
Reconciliation of total tax charge/(credit) included in profit and loss |
The tax assessed for the year is higher than the standard rate of corporation tax in the UK. The difference is explained below: |
2022 | 2021 |
£ | £ |
Profit before tax |
Profit multiplied by the standard rate of corporation tax in the UK of (2021 - |
Effects of: |
Expenses not deductible for tax purposes |
Depreciation in excess of capital allowances |
Movement in deferred tax not provided | ( |
) |
Capital allowances: Super deduction adjustment | - | (2,066 | ) |
Total tax charge/(credit) | 311,410 | (196,840 | ) |
Tax effects relating to effects of other comprehensive income |
2022 |
Gross | Tax | Net |
£ | £ | £ |
Actuarial (loss)/ gain recognised | ( |
) | 311,410 | (1,327,590 | ) |
2021 |
Gross | Tax | Net |
£ | £ | £ |
Actuarial (loss)/ gain recognised | (196,840 | ) | 839,160 |
As at 31 December 2022 the company had tax losses available to carry forward of £20,526,162 (2021: £20,819,676). No deferred tax asset has been recognised in respect of the tax losses. |
Hi-Wire Limited (Registered number: 03512877) |
Notes to the Financial Statements - continued |
for the year ended 31 December 2022 |
10. | INTANGIBLE FIXED ASSETS |
Distribution |
agreement |
£ |
COST |
At 1 January 2022 |
and 31 December 2022 |
AMORTISATION |
At 1 January 2022 |
and 31 December 2022 |
NET BOOK VALUE |
At 31 December 2022 |
At 31 December 2021 |
11. | TANGIBLE FIXED ASSETS |
Freehold |
land & | Improvements | Plant and | Computer |
buildings | to property | machinery | equipment | Totals |
£ | £ | £ | £ | £ |
COST |
At 1 January 2022 |
Additions |
Disposals | ( |
) | ( |
) |
At 31 December 2022 |
DEPRECIATION |
At 1 January 2022 |
Charge for year |
Eliminated on disposal | ( |
) | ( |
) |
At 31 December 2022 |
NET BOOK VALUE |
At 31 December 2022 |
At 31 December 2021 |
12. | STOCKS |
2022 | 2021 |
£ | £ |
Raw materials |
Finished goods |
Hi-Wire Limited (Registered number: 03512877) |
Notes to the Financial Statements - continued |
for the year ended 31 December 2022 |
13. | DEBTORS: AMOUNTS FALLING DUE WITHIN ONE YEAR |
2022 | 2021 |
£ | £ |
Trade debtors |
Other debtors |
Prepayments and accrued income |
14. | CREDITORS: AMOUNTS FALLING DUE WITHIN ONE YEAR |
2022 | 2021 |
£ | £ |
Trade creditors |
Amounts owed to group undertakings |
Social security and other taxes |
VAT | 416,392 | 426,951 |
Accruals and deferred income |
The company is party to an Intercompany Revolver Note via Superior Essex Inc, with a loan facility of up to £15m. Under the terms of the Note, any advances are repayable on the earlier of on demand or on 1 December 2025 or such other date as may be agreed upon in writing by the Parties. Interest is charged and accrued at a rate of 1.5% per annum. |
Included in amounts owed to group undertakings at 31 December 2022 is £2.5m relating to advances made to the company under the terms of the Intercompany Revolver Note. The interest accrued at the balance sheet date amounted to £24,342. |
15. | LEASING AGREEMENTS |
Minimum lease payments under non-cancellable operating leases fall due as follows: |
2022 | 2021 |
£ | £ |
Within one year |
Between one and five years |
In more than five years |
16. | CALLED UP SHARE CAPITAL |
Allotted, issued and fully paid: |
Number: | Class: | Nominal | 2022 | 2021 |
value: | £ | £ |
Ordinary shares | £0.01 | 6,089,400 | 6,089,400 |
The company has one class of ordinary shares which carry no right to fixed income. |
Hi-Wire Limited (Registered number: 03512877) |
Notes to the Financial Statements - continued |
for the year ended 31 December 2022 |
17. | RESERVES |
Capital |
Retained | Share | contribution |
earnings | premium | reserve | Totals |
£ | £ | £ | £ |
At 1 January 2022 | ( |
) | 4,927,395 |
Profit for the year |
Actuarial gain recognised | (1,327,590 | ) | - | - | (1,327,590 | ) |
At 31 December 2022 | ( |
) | 3,605,956 |
Retained earnings represents cumulative profits or losses net of dividends paid and other adjustments. |
The share premium reserve contains the premium arising on issue of equity shares, net of issue expenses. |
The capital contribution reserve represents the conversion of intercompany borrowings, following the transfer on 29 February 2020 of the company's entire issued ordinary share capital from its immediate parent, SE Holding C.V., to another group entity, Essex Brownell LLC. Subsequently, on 31 May 2020 Essex Brownell LLC transferred its 100% holding in Hi-Wire Limited to Superior Essex Global LLC. |
The capital contribution reserve is non-distributable. |
18. | EMPLOYEE BENEFIT OBLIGATIONS |
Defined contribution scheme |
The Company operates a defined contribution pension scheme. The assets of the scheme are held separately in an independently administered pension scheme. Under this scheme, the amount charged to the profit and loss account represents the contribution payable to the scheme in respect of the accounting period. |
Defined benefit scheme |
For certain employees, the company operates a defined benefit pension scheme with assets held in a separately administered fund. The scheme provides retirement benefits on the basis of members' final salary. |
The results of the most recent full actuarial valuation as at 30 April 2021 were updated to the accounting date by Lane Clark & Peacock LLP, independent consulting actuaries. The present value of the defined benefit obligation, the related current service costs and past service cost were measured using the projected unit credit method and adjustments to the valuation at that date have been made based on the principal actuarial assumptions disclosed further in this note. |
Hi-Wire Limited (Registered number: 03512877) |
Notes to the Financial Statements - continued |
for the year ended 31 December 2022 |
18. | EMPLOYEE BENEFIT OBLIGATIONS - continued |
The amounts recognised in the balance sheet are as follows: |
Defined benefit |
pension plans |
2022 | 2021 |
£ | £ |
Present value of funded obligations | ( |
) | ( |
) |
Fair value of plan assets |
2,751,000 | 4,270,000 |
Present value of unfunded obligations |
Surplus |
Net asset |
The amounts recognised in profit or loss are as follows: |
Defined benefit |
pension plans |
2022 | 2021 |
£ | £ |
Current service cost |
Net interest from net defined benefit asset/liability |
(78,000 |
) |
(40,000 |
) |
Past service cost |
Running costs |
130,000 | 156,000 |
Actual return on plan assets | ( |
) |
Changes in the present value of the defined benefit obligation are as follows: |
Defined benefit |
pension plans |
2022 | 2021 |
£ | £ |
Opening defined benefit obligation |
Current service cost |
Contributions by scheme participants |
Interest cost |
Actuarial losses/(gains) | ( |
) | ( |
) |
Benefits paid | ( |
) | ( |
) |
Hi-Wire Limited (Registered number: 03512877) |
Notes to the Financial Statements - continued |
for the year ended 31 December 2022 |
18. | EMPLOYEE BENEFIT OBLIGATIONS - continued |
Changes in the fair value of scheme assets are as follows: |
Defined benefit |
pension plans |
2022 | 2021 |
£ | £ |
Opening fair value of scheme assets |
Contributions by employer |
Contributions by scheme participants |
Expected return | 355,000 | 253,000 |
Actuarial gains/(losses) | ( |
) |
Benefits paid | (602,000 | ) | (588,000 | ) |
Running costs | (172,000 | ) | (159,000 | ) |
The amounts recognised in other comprehensive income are as follows: |
Defined benefit |
pension plans |
2022 | 2021 |
£ | £ |
Actuarial gains/(losses) | ( |
) |
(1,639,000 | ) | 1,036,000 |
The major categories of scheme assets as amounts of total scheme assets are as follows: |
Defined benefit |
pension plans |
2022 | 2021 |
£ | £ |
Equities |
Bonds |
Other | 968,000 | 358,000 |
13,223,000 | 19,968,000 |
Principal actuarial assumptions at the balance sheet date (expressed as weighted averages): |
2022 | 2021 |
Discount rate |
Future salary increases |
Future pension increases |
Inflation - RPI | 3.30% | 3.50% |
Inflation - CPI | 2.70% | 2.90% |
Hi-Wire Limited (Registered number: 03512877) |
Notes to the Financial Statements - continued |
for the year ended 31 December 2022 |
18. | EMPLOYEE BENEFIT OBLIGATIONS - continued |
Mortality assumptions: |
The assumed life expectancy of: |
2022 | 2021 |
Years | Years |
Male aged 65 retiring today | 21.0 | 21.1 |
Male aged 65 retiring in 20 years time | 21.8 | 22.4 |
Female aged 65 retiring today | 23.5 | 23.2 |
Female aged 65 retiring in 20 years time | 24.6 | 24.3 |
Future contributions |
On 26 May 2022, the most recent full actuarial valuation, as at 30 April 2021 was completed. As at the valuation date, there was a surplus of £0.3m between the Scheme's invested assets, technical provisions and long-term funding target. |
Consequently, no deficit contributions are payable and no Recovery Plan is required. On 25 May 2022, the Principal Employer agreed the following schedule of contributions: |
- | £250,000 per annum from 1 January 2022 to 31 December 2024 |
- | Beyond 31 December 2024, the Employer will continue to contribute 59% of contribution earnings, plus £150,000 to cover ongoing Scheme expenses. |
These rates will be reviewed following the next full actuarial valuation which will be due with an effective date no later than 30 April 2024. |
19. | ULTIMATE PARENT COMPANY |
LS Corp (incorporated in Korea ) is regarded by the directors as being the company's ultimate parent company. |
20. | ULTIMATE CONTROLLING PARTY |
At the balance sheet date the company was a wholly owned subsidiary of Superior Essex Global LLC. The consolidated financial statements of this group are available to the public and may be obtained from Superior Essex inc, 5770 Powers Ferry Road, Suite 300, Atlanta GA 30327, U.S.A. |
The ultimate parent company and controlling party is considered to be LS Corp, a company registered in Korea, by virtue of its controlling interest in the immediate parent company Superior Essex Global LLC. LS Corp is the largest company into which these financial statements are consolidated and is therefore considered to be Hi-Wire Limited's ultimate parent company. Copies of LS Corp's financial statements can be obtained from LS Corp, LS Yongsan Tower, 92 Hangang-Daero, Yongsan-Gu, Seoul, Korea. |