The directors present the strategic report for the year ended 31 December 2022.
The statement of comprehensive income is set out on page 11 and shows turnover for the year of £17,135,806 (2021 - £14,019,823) and a profit for the year after tax of £541,973 (2021 - £285,623).
The board are pleased to welcome Elettronica Progetti to the Group. The company purchased the assets of Elettronica Progetti on 30th November 2022 as part of the Strategic growth plans to expand the product portfolio by offering a wider range of product options to our customers and to increase our customer base.
Promatic International was awarded as an ISSF official partner of Clay Target Machinery in September 2021, to the end of 2024. This partnership allows the group to explore new growth regions whilst continuing to strengthen the brand by offering support to the Individual members throughout the events.
To continue with the strategic plans the company entered into a share buyback during the year. This simplifies the ownership structure of the group, and that of its ultimate parent company RAM (102) Limited.
In 2022 the group delivered sales into new regions in line with the group’s growth strategy generating an increase in turnover of 22.2% and maintaining gross margin of 43.5%, EBITDA of £1,587,780 (2021 - £1,466,706). The acquisition costs of Elettronica Progetti were fully written off in the year of acquisition.
Whilst the impact of the indirect trade effects of Russia’s invasion of Ukraine at the beginning of the year caused inflationary pressure worldwide and contributed to key component increases the group was able to absorb some of the rises with better buying and management of cost overheads. Administrative expenses include foreign exchange losses of £147,033 (2021 £198,010).
The Group continues to generate cash to support the strategy. The net assets decreased in the year following the share buyback, even so the balance sheet is relatively healthy with reserves of £2,435,429. There have been no events since the statement of financial position date which materially affect the position of the company.
The market for the manufacture and distribution of Clay Pigeon Traps and associated products on a worldwide basis is competitive. The company is a market leader and seeks to manage the risk of losing market share to key competitors by the provision of better quality products with a wider range and market leading price competitiveness.
Sales to Europe are made in euros and to the USA in US dollars. The company also purchases products from around the globe in various currencies. The company is therefore exposed to movements in exchange rates. The directors monitor the net exposure and take steps on pricing and sourcing to reduce the impact of currency movements.
The main financial risks arising from the company’s activities are credit risk and exchange rate risk. These are monitored by the board of directors and were not considered to be significant at the statement of financial position date.
The company’s policy in respect of credit risk, is to require appropriate credit checks on potential customers before sales are made.
Other Risks
The threat of a recession towards the end of 2023 is considered to be an uncertainty facing the company with the continuing volatility in raw material pricing and significant increases in labour costs coupled with a continued shortage of skills in the market.
The company will be exposed to higher Interest rate rises for new lending in 2023, nevertheless the risk is low as new expenditure is not deemed significant.
It is the opinion of the management and the Board that the company has a level of resilience which can weather a recession (as supported by the financial modelling of different future states).
The Group understands the importance of a green future and works closely with supply partners and customers to produce minor impacts to the environment by aiming for a zero-reject policy and eliminating as much waste as possible through recycling mechanisms. In addition, the company has introduced a new company car policy to purchase vehicles with low carbon emissions or Hybrid vehicles and encourages employees to participate with company incentives.
The company saw the need to remove the risk of rising utility costs post pandemic due to supply and demand and was able to secure a long-term fixed price contract at 2020 rates in May 2021.
The business plans for the company is being executed according to the respective group growth strategies and opportunities for acquisition and strategic partnerships continue to be sought to complement organic growth.
The key performance indicators for the business which include our EBITDA, order book, gross margin, cash generation and market mix analysis are all very positive for the year ahead.
In 2022, Promatic Holdings Limited has achieved a gross margin of 43.5% (2021 – 43.5%), an EBITDA of £1,587,780 (2021 - £1,466,706) and a cash outflow of £1,651,731 (2021 - £217,102).
On behalf of the board
The directors present their annual report and financial statements for the year ended 31 December 2022.
The results for the year are set out on page 11.
No ordinary dividends were paid. The directors do not recommend payment of a further dividend.
The directors who held office during the year and up to the date of signature of the financial statements were as follows:
The group seeks to manage financial risk by ensuring sufficient liquidity is available to meet foreseeable needs of working capital, finance charges and principal repayments on its debt instruments and to invest cash assets safely and profitably.
Management receives cash flow projections on a monthly basis as well as information regarding cash balances. At the end of the financial year, these projections indicated that the group expected to have sufficient liquid resources to meet its obligations under all reasonably expected circumstances.
The group is exposed to cash flow interest rate risk from borrowings at a variable rate. During the periods under review, the group's borrowings at variable rate were denominated in pound sterling.
Foreign exchange risk arises when individual group entities enter into transactions denominated in a currency other than their functional currency. The group's policy is, where possible, to allow group entities to settle liabilities denominated in their functional currency (primarily US dollars or pound sterling) with the cash generated from their own operations in that currency.
The group is predominantly exposed to currency risk on sales made in US dollars.
Credit risk is the risk of financial loss to the group if a customer or counterparty to a financial instrument fails to meet its contractual obligations. The group is mainly exposed to credit risk from credit sales. It is group policy to assess the credit risk of new customers before entering contracts. Such credit ratings are taken into account by local business practices. Each new customer is analysed individually for creditworthiness before the group's standard payment and delivery terms and conditions are offered.
A monthly review of the trade receivables' ageing analysis is undertaken and customers' credit is reassessed periodically. Existing customers that become "high risk" as a result of the periodic reassessment are placed on a restricted customer list and future credit sales are made only with approval of the local management, otherwise payment in advance is required.
WR Partners were appointed as auditor to the group and in accordance with section 485 of the Companies Act 2006, a resolution proposing that they be re-appointed will be put at a General Meeting.
We have audited the financial statements of Promatic Holdings Limited (the 'parent company') and its subsidiaries (the 'group') for the year ended 31 December 2022 which comprise the group statement of comprehensive income, the group balance sheet, the company balance sheet, the group statement of changes in equity, the company statement of changes in equity, the group statement of cash flows and notes to the financial statements, including significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice).
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 the financial statements section of our report. We are independent of the group and 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, 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 group's and parent company’s ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.
Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.
Other information
The other information comprises the information included in the annual report other than the financial statements and our auditor's report thereon. The directors are responsible for the other information contained within the annual report. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the course of the audit, or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.
We have nothing to report in this regard.
Opinions on other matters prescribed by the Companies Act 2006
In our opinion, based on the work undertaken in the course of our audit:
the information given in the strategic report and the directors' report for the financial year for which the financial statements are prepared is consistent with the financial statements; and
the strategic report and the directors' report have been prepared in accordance with applicable legal requirements.
In the light of the knowledge and understanding of the group and the parent company and their environment obtained in the course of the audit, we have not identified material misstatements in the strategic report or the directors' report. We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to report to you if, in our opinion:
adequate accounting records have not been kept 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.
As explained more fully in the directors' responsibilities statement, 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 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 parent company or to cease operations, or have no realistic alternative but to do so.
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.
The extent to which our procedures are capable of detecting irregularities, including fraud, is detailed below.
Because of the inherent limitations of an audit, there is a risk that we will not detect all irregularities, including those leading to a material misstatement in the financial statements or non-compliance with regulation. This risk increases the more that compliance with a law or regulation is removed from the events and transactions reflected in the financial statements, as we will be less likely to become aware of instances of non-compliance. The risk is also greater regarding irregularities occurring due to fraud rather than error, as fraud involves intentional concealment, forgery, collusion, omission or misrepresentation.
The audit team obtained an understanding of the legal and regulatory frameworks that are applicable to the Group and Company and determined that the most significant are those that relate to the reporting framework (FRS102 and the Companies Act 2006), the relevant tax compliance regulations, employment law, Health and Safety Regulations and the General Data Protection Regulation (GDPR).
We understood how the Group and Company is complying with these frameworks by making enquiries of management and those responsible for legal and compliance procedures. We also reviewed relevant documentation and correspondence to identify any recorded instances of irregularity or non compliance that might have a material impact on the financial statements.
We assessed the susceptibility of the Group and Company's financial statements to material misstatement, including how fraud might occur by meeting with key management to understand where they considered there was susceptibility to fraud. Based on our understanding our procedures involved enquiries of management and those charged with governance, manual journal entry testing, cashbook reviews for large and unusual items and the challenge of significant accounting estimates used in preparing the financial statements.
A further description of our responsibilities is available on the Financial Reporting Council’s website at: https://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.
The profit and loss account has been prepared on the basis that all operations are continuing operations.
As permitted by s408 Companies Act 2006, the company has not presented its own profit and loss account and related notes. The company’s profit for the year was £2,160,859 (2021 - £300,060 loss).
Promatic Holdings Limited (“the company”) is a private limited company domiciled and incorporated in England and Wales. The registered office is Unit 1 Hooton Road, Hooton, South Wirral, CH66 7PA.
The group consists of Promatic Holdings Limited and all of its subsidiaries.
These financial statements have been prepared in accordance with FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” (“FRS 102”) and the requirements of the Companies Act 2006.
The financial statements are prepared in sterling, which is the functional currency of the company. Monetary amounts in these financial statements are rounded to the nearest £.
The financial statements have been prepared under the historical cost convention. The principal accounting policies adopted are set out below.
The company is a qualifying entity for the purposes of FRS 102, being a member of a group where the parent of that group prepares publicly available consolidated financial statements, including this company, which are intended to give a true and fair view of the assets, liabilities, financial position and profit or loss of the group. The company has therefore taken advantage of exemptions from the following disclosure requirements for parent company information presented within the consolidated financial statements:
Section 7 ‘Statement of Cash Flows’: Presentation of a statement of cash flow and related notes and disclosures;
Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instrument Issues: Interest income/expense and net gains/losses for financial instruments not measured at fair value; basis of determining fair values; details of collateral, loan defaults or breaches, details of hedges, hedging fair value changes recognised in profit or loss and in other comprehensive income;
Section 26 ‘Share based Payment’: Share-based payment expense charged to profit or loss, reconciliation of opening and closing number and weighted average exercise price of share options, how the fair value of options granted was measured, measurement and carrying amount of liabilities for cash-settled share-based payments, explanation of modifications to arrangements;
Section 33 ‘Related Party Disclosures’: Compensation for key management personnel.
The consolidated group financial statements consist of the financial statements of the parent company Promatic Holdings Limited together with all entities controlled by the parent company (its subsidiaries) and the group’s share of its interests in joint ventures and associates.
All financial statements are made up to 31 December 2022. Where necessary, adjustments are made to the financial statements of subsidiaries to bring the accounting policies used into line with those used by other members of the group.
All intra-group transactions, balances and unrealised gains on transactions between group companies are eliminated on consolidation. Unrealised losses are also eliminated unless the transaction provides evidence of an impairment of the asset transferred.
Subsidiaries are consolidated in the group’s financial statements from the date that control commences until the date that control ceases.
At the time of approving the financial statements, the directors have a reasonable expectation that the group has adequate resources to continue in operational existence for the foreseeable future. Thus the directors continue to adopt the going concern basis of accounting in preparing the financial statements.
Turnover is recognised at the fair value of the consideration received or receivable for goods and services provided in the normal course of business, and is shown net of VAT and other sales related taxes. The fair value of consideration takes into account trade discounts, settlement discounts and volume rebates.
Revenue from the sale of goods is recognised when the significant risks and rewards of ownership of the goods have passed to the buyer (usually on dispatch of the goods), the amount of revenue can be measured reliably, it is probable that the economic benefits associated with the transaction will flow to the entity and the costs incurred or to be incurred in respect of the transaction can be measured reliably.
Research expenditure is written off against profits in the year in which it is incurred. Identifiable development expenditure is capitalised to the extent that the technical, commercial and financial feasibility can be demonstrated.
The gain or loss arising on the disposal of an asset is determined as the difference between the sale proceeds and the carrying value of the asset, and is recognised in the profit and loss account.
In the parent company financial statements, investments in subsidiaries are initially measured at cost and subsequently measured at cost less any accumulated impairment losses.
A subsidiary is an entity controlled by the group. Control is the power to govern the financial and operating policies of the entity so as to obtain benefits from its activities.
At each reporting period end date, the group reviews the carrying amounts of its tangible and intangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any).
Recoverable amount is the higher of fair value less costs to sell and value in use.
If the recoverable amount of an asset is estimated to be less than its carrying amount, the carrying amount of the asset is reduced to its recoverable amount. An impairment loss is recognised immediately in profit or loss.
Recognised impairment losses are reversed if, and only if, the reasons for the impairment loss have ceased to apply. Where an impairment loss subsequently reverses, the carrying amount of the asset is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset in prior years. A reversal of an impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the reversal of the impairment loss is treated as a revaluation increase.
The group has elected to apply the provisions of Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instruments Issues’ of FRS 102 to all of its financial instruments.
Financial instruments are recognised in the group's balance sheet when the group becomes party to the contractual provisions of the instrument.
Financial assets and liabilities are offset and the net amounts presented in the financial statements when there is a legally 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.
Basic financial assets, which include debtors and cash and bank balances, are initially measured at transaction price including transaction costs and are subsequently carried at amortised cost using the effective interest method unless the arrangement constitutes a financing transaction, where the transaction is measured at the present value of the future receipts discounted at a market rate of interest. Financial assets classified as receivable within one year are not amortised.
Other financial assets, including investments in equity instruments which are not subsidiaries, associates or joint ventures, are initially measured at fair value, which is normally the transaction price. Such assets are subsequently carried at fair value and the changes in fair value are recognised in profit or loss, except that investments in equity instruments that are not publicly traded and whose fair values cannot be measured reliably are measured at cost less impairment.
Financial assets, other than those held at fair value through profit and loss, are assessed for indicators of impairment at each reporting end date.
Financial assets are impaired where there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial asset, the estimated future cash flows have been affected. If an asset is impaired, the impairment loss is the difference between the carrying amount and the present value of the estimated cash flows discounted at the asset’s original effective interest rate. The impairment loss is recognised in profit or loss.
If there is a decrease in the impairment loss arising from an event occurring after the impairment was recognised, the impairment is reversed. The reversal is such that the current carrying amount does not exceed what the carrying amount would have been, had the impairment not previously been recognised. The impairment reversal is recognised in profit or loss.
Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire or are settled, or when the group transfers the financial asset and substantially all the risks and rewards of ownership to another entity, or if some significant risks and rewards of ownership are retained but control of the asset has transferred to another party that is able to sell the asset in its entirety to an unrelated third party.
Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the group after deducting all of its liabilities.
Basic financial liabilities, including creditors, bank loans, loans from fellow group companies and preference shares that are classified as debt, are initially recognised at transaction price. Financial liabilities classified as payable within one year are not amortised.
Debt instruments are subsequently carried at amortised cost.
Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Amounts payable are classified as current liabilities if payment is due within one year or less. If not, they are presented as non-current liabilities. Trade creditors are recognised initially at transaction price.
Derivatives, including interest rate swaps and forward foreign exchange contracts, are not basic financial instruments. Derivatives are initially recognised at fair value on the date a derivative contract is entered into and are subsequently re-measured at their fair value. Changes in the fair value of derivatives are recognised in profit or loss in finance costs or finance income as appropriate, unless hedge accounting is applied and the hedge is a cash flow hedge.
Debt instruments that do not meet the conditions in FRS 102 paragraph 11.9 are subsequently measured at fair value through profit or loss. Debt instruments may be designated as being measured at fair value through profit or loss to eliminate or reduce an accounting mismatch or if the instruments are measured and their performance evaluated on a fair value basis in accordance with a documented risk management or investment strategy.
Financial liabilities are derecognised when the group's contractual obligations expire or are discharged or cancelled.
Equity instruments issued by the group are recorded at the proceeds received, net of transaction costs. Dividends payable on equity instruments are recognised as liabilities once they are no longer at the discretion of the group.
The tax expense represents the sum of the tax currently payable and deferred tax.
The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the profit and loss account because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The group’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.
Deferred tax liabilities are generally recognised for all timing differences and deferred tax assets are recognised to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits. Such assets and liabilities are not recognised if the timing difference arises from goodwill or from the initial recognition of other assets and liabilities in a transaction that affects neither the tax profit nor the accounting profit.
The carrying amount of deferred tax assets is reviewed at each reporting end date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realised. Deferred tax is charged or credited in the profit and loss account, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity. Deferred tax assets and liabilities are offset if, and only if, there is a legally enforceable right to offset current tax assets and liabilities and the deferred tax assets and liabilities relate to taxes levied by the same tax authority.
The costs of short-term employee benefits are recognised as a liability and an expense, unless those costs are required to be recognised as part of the cost of stock or fixed assets.
The cost of any unused holiday entitlement is recognised in the period in which the employee’s services are received.
Termination benefits are recognised immediately as an expense when the company is demonstrably committed to terminate the employment of an employee or to provide termination benefits.
Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.
Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessees. All other leases are classified as operating leases.
Assets held under finance leases are recognised as assets at the lower of the assets fair value at the date of inception and the present value of the minimum lease payments. The related liability is included in the balance sheet as a finance lease obligation. Lease payments are treated as consisting of capital and interest elements. The interest is charged to profit or loss so as to produce a constant periodic rate of interest on the remaining balance of the liability.
Rentals payable under operating leases, including any lease incentives received, are charged to profit or loss on a straight line basis over the term of the relevant lease except where another more systematic basis is more representative of the time pattern in which economic benefits from the leased asset are consumed.
Government grants are recognised at the fair value of the asset received or receivable when there is reasonable assurance that the grant conditions will be met and the grants will be received.
A grant that specifies performance conditions is recognised in income when the performance conditions are met. Where a grant does not specify performance conditions it is recognised in income when the proceeds are received or receivable. A grant received before the recognition criteria are satisfied is recognised as a liability.
In the application of the group’s accounting policies, the directors are required to make judgements, estimates and assumptions about the carrying amount 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 where the revision affects only that period, or in the period of the revision and future periods where the revision affects both current and future periods.
The following judgements (apart from those involving estimates) have had the most significant effect on amounts recognised in the financial statements.
Determine whether leases entered into by the company either as a lessor or a lessee are operating or finance leases. These decisions depend on an assessment of whether the risks and rewards of ownership have been transferred from the lessor to the lessee on a lease by lease basis. The total of tangible fixed assets held under hire purchase agreements is disclosed in note 12 and the value of hire purchase liabilities is disclosed in note 20 to these financial statements.
Determine whether there are indicators of impairment of the company's tangible and intangible fixed assets. Factors taken into consideration in reaching such a decision include the economic viability and expected future financial performance of the asset. There are no impairments against tangible and intangible fixed assets at the current or comparative balance sheet date.
The estimates and assumptions which have a significant risk of causing a material adjustment to the carrying amount of assets and liabilities are as follows.
Intangible assets are amortised over their useful lives taking into account residual values, where appropriate. The expected useful life of the intellectual property rights are reviewed annually taking into account their contribution to the order book and the revenue and profits which the intellectual property rights are providing to the company. The net book value of intangible fixed assets is disclosed in note 11 to these financial statements.
Tangible assets are depreciated over their useful lives taking into account residual values, where appropriate. The expected useful life of the assets are reviewed annually taking into account their contribution to the order book and the revenue and profits which the assets are providing to the company. The net book value of tangible fixed assets is disclosed in note 12 to these financial statements.
Where appropriate, slow moving stocks are written down to their net realisable value. The assessment of net realisable value takes account of factors such as the availability of outlet channels and the value realised, historically, for similar products at that stage of their life cycle.
In assessing the provision for doubtful debts, factors taken into account include debtors' age profile, their historical payment performance and available credit data.
The average monthly number of persons (including directors) employed by the group and company during the year was:
Their aggregate remuneration comprised:
The number of directors for whom retirement benefits are accruing under defined contribution schemes amounted to 4 (2020 - 5).
The actual (credit)/charge for the year can be reconciled to the expected charge for the year based on the profit or loss and the standard rate of tax as follows:
Factors that may affect future tax charges
An increase in the future main corporation tax rate to 25% from 1 April 2023 from the previously enacted 19% was announced in the budget on 3 March 2021 and substantively enacted on 24 May 2021. The deferred tax balance at the year end has been calculated based on the substantively enacted rate.
The net carrying value of tangible fixed assets includes the following in respect of assets held under finance leases or hire purchase contracts.
Details of the company's subsidiaries at 31 December 2022 are as follows:
Registered office addresses (all UK unless otherwise indicated):
Impairment losses totalling £220,004 (2021 - £Nil) were recognised in profit and loss during the year due to slow moving and obsolete stock.
The impairment gain/(loss) recognised in the Group profit and loss in respect of bad and doubtful debts was a debit of £4,512 (2021 - £4,407).
The amounts owed by group undertakings accrue interest at 2% and are repayable on demand.
The amounts owed to group undertakings accrue interest at 2% and are repayable on demand.
£865,660 (£2021 - £952,785) of bank loans in Promatic Inc are secured against assets purchased. Of this, £459,087 (2021 - £370,098) is due within one year and £406,574 (2021 - £582,687) is due after more than one year. Interest is charged between 1.9% - 5.85% depending on the individual agreement.
£984,000 (2021 - £984,000) series A loan notes have no fixed redeemable date.
£716,667 (2021 - £916,667) of bank loans in Promatic Holdings Limited relate to the Coronavirus Business Interruption Scheme. The balance is being repaid in monthly instalments beginning in August 2021 and ending in July 2026. Interest of £43,573 (2021 - £23,769) was charged in the year.
A new loan of £1,500,000 in Promatic Holdings Limited was received in the year for the share buyback acquisition.
The bank loan and loan notes are secured on the assets of the Group and rank in accordance with an "Intercreditors Deed" entered into by HSBC Bank Plc, Promatic Holdings Limited and subsidiaries, RAM (102) Limited and senior management.
Finance lease payments represent rentals payable by the company or group for certain items of plant and machinery and motor vehicles. Leases include purchase options at the end of the lease period, and no restrictions are placed on the use of the assets. The average lease term is 5 years. All leases are on a fixed repayment basis and no arrangements have been entered into for contingent rental payments.
The following are the major deferred tax liabilities and assets recognised by the group and company, and movements thereon:
£82,836 (2021 - £39,913) of the deferred tax liability is expected to reverse within 12 months and relates to non deductible amortisation on assets introduced at fair value.
A defined contribution pension scheme is operated for all qualifying employees. The assets of the scheme are held separately from those of the group in an independently administered fund.
At 31 December 2022, the Group had pension commitments to the defined contribution scheme of £44,925 (2021 - £16,300).
The ordinary shares are treated pari passu and are as if they constituted one class of share.
Called up share capital represents the nominal value of the shares issued.
The share premium reserve includes the premium on issue of equity shares, net of any issue costs.
The capital redemption reserve is a statutory, non-distributable reserve into which amounts are transferred following the redemption or purchase of a company's own shares out of distributable profits.
The foreign exchange reserve includes exchange differences which arise on consolidation of the foreign subsidiary.
The merger reserve arose on a past group reconstruction that was accounted for as a merger in accordance with UK GAAP as applied at that time. FRS 102 maintains the use of merger accounting for group reconstructions.
The profit and loss reserve represents cumulative profits and losses, net of any dividends paid and other adjustments.
The Group is party to cross guarantees in relation to various loan notes and bank facilities made available to other companies in the Group. The amounts outstanding in respect of guarantees as at 31 December 2022 are £3,001,692 (2021 - £1,990,667).
At the reporting end date the group had outstanding commitments for future minimum lease payments under non-cancellable operating leases, which fall due as follows:
The remuneration of key management personnel is as follows.
The above includes National Insurance of £74,602 (2021 - £49,460).
During the year the group entered into the following transactions with related parties:
The following amounts were outstanding at the reporting end date:
The largest group to which the company's results are consolidated is that of RAM (102) Limited.