Company registration number 00804767 (England and Wales)
AUTO MARINE CABLES LIMITED
ANNUAL REPORT
AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2023
AUTO MARINE CABLES LIMITED
COMPANY INFORMATION
Directors
Mrs D Hammond
Mr P Hammond
Mrs A Bryant
Mr B Collins
Company number
00804767
Registered office
Unit 32, Devonshire Road
Oakhill Trading Estate
Worsley
Manchester
Auditor
Barlow Andrews LLP
Carlyle House
78 Chorley New Road
Bolton
Bankers
The Royal Bank of Scotland
46-48 Deansgate
Bolton
AUTO MARINE CABLES LIMITED
CONTENTS
Page
Strategic report
1
Directors' report
2
Directors' responsibilities statement
3
Independent auditor's report
4 - 6
Profit and loss account
7
Balance sheet
8
Statement of changes in equity
9
Notes to the financial statements
10 - 21
AUTO MARINE CABLES LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 30 SEPTEMBER 2023
- 1 -
The directors present the strategic report for the year ended 30 September 2023.
Review of the business
The key performance indicators for the company are as follows:
2023
2022
£
£
Turnover
15,808,141
18,704,855
Profit before taxation
1,430,891
2,383,835
Gross profit margin
26.86%
27.44%
Net current assets
10,314,461
9,040,719
Profit and loss reserves
10,919,623
9,674,370
Debtors days
54
59
The directors present the strategic report of the company for the year and look forward to the future with confidence.
Principal risks and uncertainties
The UK economy is experiencing significant challenges in terms of price of raw materials and labour costs driven by inflation and uncertainty in overseas countries. Labour shortages also continue to cause concerns.
Credit risk from trade debtors is managed by operating strict credit control procedures, including detailed ongoing credit reference checks on all UK and export customers, regular reviews of credit limits and payment terms.
The directors regularly review the risks and opportunities to the business to identify areas of interest and have investigated projects to eliminate or reduce the risk to an acceptable level or maximise the opportunity.
Development and performance
Turnover for the year decreased by 15% to £15.8m (2022: £18.7m) and gross profit margin for the year also decreased slightly by 0.5% to 26.9% due to raw material increases and labour costs; however, the directors are happy with the pre-taxation profit position of £1.4m (2022: £2.4m) despite margin pressures.
The company maintains a strong cash position, with year-end cash of £1.2m (2022: £1.7m) and there is also an unused bank facility available. The directors aim to maintain a strong and liquid cash position for group working capital purposes, whilst at the same time endeavouring to achieve a low risk return where possible.
The company looks forward to new product development and increased market penetration in 2024.
Mrs A Bryant
Director
6 February 2024
AUTO MARINE CABLES LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 30 SEPTEMBER 2023
- 2 -
The directors present their annual report and financial statements for the year ended 30 September 2023.
Principal activities
The principal activity of the company continued to be that of manufacturers and national distributors of electrical cables to the motor, marine, caravan and allied industries.
Results and dividends
The results for the year are set out on page 7.
No ordinary dividends were paid. The directors do not recommend payment of a final dividend.
Directors
The directors who held office during the year and up to the date of signature of the financial statements were as follows:
Mrs D Hammond
Mr P Hammond
Mrs A Bryant
Mr B Collins
Auditor
The auditor, Barlow Andrews LLP, is deemed to be reappointed under section 487(2) of the Companies Act 2006.
Statement of disclosure to auditor
So far as each person who was a director at the date of approving this report is aware, there is no relevant audit information of which the company’s auditor is unaware. Additionally, the directors individually have taken all the necessary steps that they ought to have taken as directors in order to make themselves aware of all relevant audit information and to establish that the company’s auditor is aware of that information.
Medium-sized companies exemption
This report has been prepared in accordance with the provisions applicable to companies entitled to the medium-sized companies exemption.
On behalf of the board
Mrs A Bryant
Director
6 February 2024
AUTO MARINE CABLES LIMITED
DIRECTORS' RESPONSIBILITIES STATEMENT
FOR THE YEAR ENDED 30 SEPTEMBER 2023
- 3 -
The directors are responsible for preparing the annual report and the financial statements in accordance with applicable law and regulations.
Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with 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.
AUTO MARINE CABLES LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF AUTO MARINE CABLES LIMITED
- 4 -
Opinion
We have audited the financial statements of Auto Marine Cables Limited (the 'company') for the year ended 30 September 2023 which comprise the profit and loss account, the balance sheet, the statement of changes in equity 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 FRS 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 30 September 2023 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.
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 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.
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.
AUTO MARINE CABLES LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF AUTO MARINE CABLES LIMITED
- 5 -
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 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, 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 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 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 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.
Auditor's responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.
The extent to which our procedures are capable of detecting irregularities, including fraud, is detailed below.
the engagement partner 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 directors and other management, and from our commercial knowledge and experience of the electrical cables sector;
we focused on specific laws and regulations which we considered may have a direct material effect on the financial statements or the operations of the company, including the Companies Act 2006, taxation legislation, environmental and health and safety legislation;
we assessed the extent of compliance with the laws and regulations identified above through making enquiries of management and inspecting legal correspondence; and
identified laws and regulations were communicated within the audit team regularly and the team remained alert to instances of non-compliance throughout the audit.
AUTO MARINE CABLES LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF AUTO MARINE CABLES LIMITED
- 6 -
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; and
assessed whether judgements and assumptions made in determining the accounting estimates were indicative of potential bias.
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;
reading the minutes of meetings of those charged with governance; and
enquiring of management as to actual and potential litigation and claims
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 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.
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.
David Kay
Senior Statutory Auditor
For and on behalf of Barlow Andrews LLP
6 February 2024
Chartered Accountants
Statutory Auditor
Carlyle House
78 Chorley New Road
Bolton
AUTO MARINE CABLES LIMITED
PROFIT AND LOSS ACCOUNT
FOR THE YEAR ENDED 30 SEPTEMBER 2023
- 7 -
2023
2022
Notes
£
£
Turnover
3
15,808,141
18,704,855
Cost of sales
(11,561,867)
(13,572,072)
Gross profit
4,246,274
5,132,783
Distribution costs
(615,740)
(524,765)
Administrative expenses
(2,199,373)
(2,223,913)
Operating profit
4
1,431,161
2,384,105
Interest payable and similar expenses
7
(270)
(270)
Profit before taxation
1,430,891
2,383,835
Taxation
8
(185,638)
(309,854)
Profit for the financial year
1,245,253
2,073,981
The profit and loss account has been prepared on the basis that all operations are continuing operations.
There is no other comprehensive income for the year. The total comprehensive income is the profit for the financial year shown above.
AUTO MARINE CABLES LIMITED
BALANCE SHEET
AS AT
30 SEPTEMBER 2023
30 September 2023
- 8 -
2023
2022
Notes
£
£
£
£
Fixed assets
Intangible assets
9
357,795
349,413
Tangible assets
10
669,162
710,518
1,026,957
1,059,931
Current assets
Stocks
11
1,725,276
1,208,539
Debtors
12
8,623,402
7,677,944
Cash at bank and in hand
1,213,704
1,730,695
11,562,382
10,617,178
Creditors: amounts falling due within one year
13
(1,247,921)
(1,576,459)
Net current assets
10,314,461
9,040,719
Total assets less current liabilities
11,341,418
10,100,650
Creditors: amounts falling due after more than one year
14
(462)
(2,312)
Provisions for liabilities
Deferred tax liability
16
(255,336)
(257,971)
(255,336)
(257,971)
Net assets
11,085,620
9,840,367
Capital and reserves
Called up share capital
18
110,765
110,765
Capital redemption reserve
19
55,232
55,232
Profit and loss reserves
10,919,623
9,674,370
Total equity
11,085,620
9,840,367
These financial statements have been prepared in accordance with the provisions relating to medium-sized companies.true
The financial statements were approved by the board of directors and authorised for issue on 6 February 2024 and are signed on its behalf by:
Mrs A Bryant
Director
Company registration number 00804767 (England and Wales)
AUTO MARINE CABLES LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 30 SEPTEMBER 2023
- 9 -
Share capital
Capital redemption reserve
Profit and loss reserves
Total
£
£
£
£
Balance at 1 October 2021
110,765
55,232
7,600,389
7,766,386
Year ended 30 September 2022:
Profit and total comprehensive income
-
-
2,073,981
2,073,981
Balance at 30 September 2022
110,765
55,232
9,674,370
9,840,367
Year ended 30 September 2023:
Profit and total comprehensive income
-
-
1,245,253
1,245,253
Balance at 30 September 2023
110,765
55,232
10,919,623
11,085,620
AUTO MARINE CABLES LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2023
- 10 -
1
Accounting policies
Company information
Auto Marine Cables Limited is a private company limited by shares incorporated in England and Wales. The registered office is Unit 32, Devonshire Road, Oakhill Trading Estate, Worsley, Manchester.
1.1
Accounting convention
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, modified to include the revaluation of certain financial instruments at fair value. The principal accounting policies adopted are set out below.
This 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:
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’ – Carrying amounts, interest income/expense and net gains/losses for each category of financial instrument; 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 33 ‘Related Party Disclosures’ – Compensation for key management personnel.
The financial statements of the company are consolidated in the financial statements of Auto Marine Cables International Limited and PHD Industrial Holdings Limited. These consolidated financial statements are available from the registered offices, Unit 32 Devonshire Road, Oakhill Trading Estate, Worsley and 7400 Daresbury Park, Daresbury, Warrington.
1.2
Going concern
Atruet the time of approving the financial statements, the directors have a reasonable expectation that the company 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.
1.3
Turnover
Turnover is recognised at the fair value of the consideration received or receivable for goods 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.
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.
AUTO MARINE CABLES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2023
1
Accounting policies
(Continued)
- 11 -
1.4
Intangible fixed assets other than goodwill
Intangible assets acquired separately from a business are recognised at cost and are subsequently measured at cost less accumulated amortisation and accumulated impairment losses.
Intangible assets is comprised of computer software. Such assets are defined as having finite useful lives and the costs are amortised over their useful life. Intangible assets are stated at cost less amortisation and are reviewed for impairment whenever there is an indication that the carrying value may be impaired.
Amortisation is recognised so as to write off the cost or valuation of assets less their residual values over their useful lives on the following bases:
Software
15% reducing balance
1.5
Tangible fixed assets
Tangible fixed assets are initially measured at cost and subsequently measured at cost or valuation, net of depreciation and any impairment losses.
Depreciation is recognised so as to write off the cost or valuation of assets less their residual values over their useful lives on the following bases:
Plant and machinery
15% reducing balance
Fixtures, fittings & equipment
15% reducing balance
Motor vehicles
25% reducing balance
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 credited or charged to profit or loss.
1.6
Impairment of fixed assets
At each reporting period end date, the company 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). Where it is not possible to estimate the recoverable amount of an individual asset, the company estimates the recoverable amount of the cash-generating unit to which the asset belongs.
1.7
Stocks
Stocks are stated at the lower of cost and estimated selling price less costs to complete and sell. Cost comprises direct materials and, where applicable, direct labour costs and those overheads that have been incurred in bringing the stocks to their present location and condition.
At each reporting date, an assessment is made for impairment. Any excess of the carrying amount of stocks over its estimated selling price less costs to complete and sell is recognised as an impairment loss in profit or loss. Reversals of impairment losses are also recognised in profit or loss.
1.8
Cash and cash equivalents
Cash at bank and in hand are basic financial assets and include cash in hand and deposits held at call with banks.
AUTO MARINE CABLES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2023
1
Accounting policies
(Continued)
- 12 -
1.9
Financial instruments
The company 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 company's balance sheet when the company becomes party to the contractual provisions of the instrument.
Financial assets and liabilities are offset, with 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
Basic financial assets, which include debtors, cash and bank balances and loans to fellow group companies, 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.
Impairment of financial assets
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.
Derecognition of financial assets
Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire or are settled, or when the company 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.
Classification of financial liabilities
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 company after deducting all of its liabilities.
Basic financial liabilities
Basic financial liabilities, including creditors, are initially recognised at transaction price unless the arrangement constitutes a financing transaction, where the debt instrument is measured at the present value of the future payments discounted at a market rate of interest. Financial liabilities classified as payable within one year are not amortised.
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 and subsequently measured at amortised cost using the effective interest method.
AUTO MARINE CABLES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2023
1
Accounting policies
(Continued)
- 13 -
Derecognition of financial liabilities
Financial liabilities are derecognised when the company’s contractual obligations expire or are discharged or cancelled.
1.10
Equity instruments
Equity instruments issued by the company 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 company.
1.11
Taxation
The tax expense represents the sum of the tax currently payable and deferred tax.
Current 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 company’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.
Deferred tax
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.
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 when the company has 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.
1.12
Employee benefits
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.
1.13
Retirement benefits
Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.
AUTO MARINE CABLES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2023
1
Accounting policies
(Continued)
- 14 -
1.14
Leases
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.
1.15
Foreign exchange
Transactions in currencies other than pounds sterling are recorded at the rates of exchange prevailing at the dates of the transactions. At each reporting end date, monetary assets and liabilities that are denominated in foreign currencies are retranslated at the rates prevailing on the reporting end date. Gains and losses arising on translation in the period are included in profit or loss.
2
Judgements and key sources of estimation uncertainty
In the application of the company’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.
AUTO MARINE CABLES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2023
- 15 -
3
Turnover and other revenue
An analysis of the company's turnover is as follows:
2023
2022
£
£
Turnover analysed by geographical market
UK
14,005,632
16,812,738
Europe
1,738,401
1,718,963
Rest of the world
64,108
173,154
15,808,141
18,704,855
4
Operating profit
2023
2022
Operating profit for the year is stated after charging/(crediting):
£
£
Exchange losses
13,374
23,389
Fees payable to the company's auditor for the audit of the company's financial statements
17,942
18,165
Depreciation of owned tangible fixed assets
112,523
103,798
Depreciation of tangible fixed assets held under finance leases
941
1,107
(Profit)/loss on disposal of tangible fixed assets
(2,868)
3
Amortisation of intangible assets
60,673
33,627
Operating lease charges
80,806
89,004
5
Employees
The average monthly number of persons (including directors) employed by the company during the year was:
2023
2022
Number
Number
Production
41
47
Administration
22
18
Total
63
65
Their aggregate remuneration comprised:
2023
2022
£
£
Wages and salaries
2,426,992
2,496,316
Social security costs
244,112
235,299
Pension costs
64,244
43,356
2,735,348
2,774,971
AUTO MARINE CABLES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2023
- 16 -
6
Directors' remuneration
2023
2022
£
£
Remuneration for qualifying services
321,277
299,322
Company pension contributions to defined contribution schemes
8,496
7,336
329,773
306,658
The number of directors for whom retirement benefits are accruing under defined contribution schemes amounted to 2 (2022 - 2).
Remuneration disclosed above include the following amounts paid to the highest paid director:
2023
2022
£
£
Remuneration for qualifying services
152,206
125,725
Company pension contributions to defined contribution schemes
4,950
3,975
7
Interest payable and similar expenses
2023
2022
£
£
Interest on finance leases and hire purchase contracts
270
270
8
Taxation
2023
2022
£
£
Current tax
UK corporation tax on profits for the current period
188,599
193,384
Adjustments in respect of prior periods
(326)
(1,954)
Total current tax
188,273
191,430
Deferred tax
Origination and reversal of timing differences
(2,635)
118,424
Total tax charge
185,638
309,854
AUTO MARINE CABLES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2023
8
Taxation
(Continued)
- 17 -
The actual 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:
2023
2022
£
£
Profit before taxation
1,430,891
2,383,835
Expected tax charge based on the standard rate of corporation tax in the UK of 22.01% (2022: 19.00%)
314,913
452,929
Tax effect of expenses that are not deductible in determining taxable profit
(2,377)
Group relief
(127,021)
(180,148)
Permanent capital allowances in excess of depreciation
3,084
(79,397)
(Over)/under provided in prior years
(326)
(1,954)
Deferred tax adjustment
(2,635)
118,424
Taxation charge for the year
185,638
309,854
The tax rate used is the average rate used for the year.
9
Intangible fixed assets
Software
£
Cost
At 1 October 2022
839,326
Additions
69,055
At 30 September 2023
908,381
Amortisation and impairment
At 1 October 2022
489,913
Amortisation charged for the year
60,673
At 30 September 2023
550,586
Carrying amount
At 30 September 2023
357,795
At 30 September 2022
349,413
AUTO MARINE CABLES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2023
- 18 -
10
Tangible fixed assets
Plant and machinery
Fixtures, fittings & equipment
Motor Vehicles
Total
£
£
£
£
Cost
At 1 October 2022
1,528,827
1,107,798
17,049
2,653,674
Additions
76,497
76,497
Disposals
(17,049)
(17,049)
At 30 September 2023
1,528,827
1,184,295
2,713,122
Depreciation and impairment
At 1 October 2022
1,215,314
716,487
11,355
1,943,156
Depreciation charged in the year
47,028
65,131
1,305
113,464
Eliminated in respect of disposals
(12,660)
(12,660)
At 30 September 2023
1,262,342
781,618
2,043,960
Carrying amount
At 30 September 2023
266,485
402,677
669,162
At 30 September 2022
313,513
391,311
5,694
710,518
The net carrying value of tangible fixed assets includes the following in respect of assets held under finance leases or hire purchase contracts.
2023
2022
£
£
Plant and machinery
5,330
6,271
Depreciation charge for the year in respect of leased assets
941
1,107
11
Stocks
2023
2022
£
£
Raw materials and consumables
858,910
682,688
Finished goods and goods for resale
866,366
525,851
1,725,276
1,208,539
AUTO MARINE CABLES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2023
- 19 -
12
Debtors
2023
2022
Amounts falling due within one year:
£
£
Trade debtors
2,008,511
2,614,180
Amounts owed by group undertakings
6,457,971
4,950,761
Other debtors
1,650
Prepayments and accrued income
156,920
111,353
8,623,402
7,677,944
13
Creditors: amounts falling due within one year
2023
2022
Notes
£
£
Obligations under finance leases
15
1,850
1,850
Trade creditors
867,667
904,310
Corporation tax
84,539
69,611
Other taxation and social security
148,365
384,965
Other creditors
7,387
10,984
Accruals and deferred income
138,113
204,739
1,247,921
1,576,459
14
Creditors: amounts falling due after more than one year
2023
2022
Notes
£
£
Obligations under finance leases
15
462
2,312
15
Finance lease obligations
2023
2022
Future minimum lease payments due under finance leases:
£
£
Within one year
1,850
1,850
In two to five years
462
2,312
2,312
4,162
Finance lease payments represent rentals payable by the company for certain items of plant and machinery. 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.
AUTO MARINE CABLES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2023
- 20 -
16
Deferred taxation
Deferred tax assets and liabilities are offset where the company has a legally enforceable right to do so. The following is the analysis of the deferred tax balances (after offset) for financial reporting purposes:
Liabilities
Liabilities
2023
2022
Balances:
£
£
Accelerated capital allowances
255,336
257,971
2023
Movements in the year:
£
Liability at 1 October 2022
257,971
Credit to profit or loss
(2,635)
Liability at 30 September 2023
255,336
17
Retirement benefit schemes
2023
2022
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
64,244
43,356
The company operates a defined contribution pension scheme for all qualifying employees. The assets of the scheme are held separately from those of the company in an independently administered fund.
18
Share capital
2023
2022
2023
2022
Ordinary share capital
Number
Number
£
£
Issued and fully paid
A Ordinary shares of £1 each
110,765
110,765
110,765
110,765
The holders of ordinary shares are entitled to full voting rights and are entitled to one vote per share at meetings of the Company. All ordinary shares rank equally with regard to the Company's residual assets.
19
Capital redemption reserve
The capital redemption reserve records the nominal value of shares repurchased by the company.
AUTO MARINE CABLES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2023
- 21 -
20
Operating lease commitments
Lessee
At the reporting end date the company had outstanding commitments for future minimum lease payments under non-cancellable operating leases, which fall due as follows:
2023
2022
£
£
Within one year
74,732
31,138
Between two and five years
261,562
336,294
31,138
21
Related party transactions
Transactions with related parties
During the year the company entered into the following transactions with related parties:
Services received
2023
2022
£
£
Other related parties
110,132
121,816
At the year end, the balance owed to a singular related party came to the value of £9,600 (2022: £16,466).
22
Ultimate controlling party
The company's parent is Auto Marine Cables International Limited.
Auto Marine Cables International Limited is under the ultimate control of PHD Industrial Holdings Limited.
The company is included in the consolidated accounts of Auto Marine Cables International Limited and PHD Industrial Holdings Limited.
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