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REGISTERED NUMBER: 03904224 (England and Wales)










STRATEGIC REPORT, REPORT OF THE DIRECTORS AND

FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2023

FOR

PRECONOMY LIMITED

PRECONOMY LIMITED (REGISTERED NUMBER: 03904224)






CONTENTS OF THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023




Page

Company Information 1

Strategic Report 2

Report of the Directors 3

Report of the Independent Auditors 4

Statement of Income and Retained Earnings 6

Statement of Financial Position 7

Statement of Cash Flows 8

Notes to the Statement of Cash Flows 9

Notes to the Financial Statements 10


PRECONOMY LIMITED

COMPANY INFORMATION
FOR THE YEAR ENDED 31 DECEMBER 2023







DIRECTORS: N Giles
R M Molloy
R Hammacott





REGISTERED OFFICE: Unit 1B Long Stoop Way
Forest Town
Mansfield
Nottinghamshire
NG19 0FQ





REGISTERED NUMBER: 03904224 (England and Wales)





AUDITORS: Ashtree Audit Ltd
Statutory Auditors
Strelley Hall
Nottingham
Nottinghamshire
NG8 6PE

PRECONOMY LIMITED (REGISTERED NUMBER: 03904224)

STRATEGIC REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023

The directors present their strategic report for the year ended 31 December 2023.

REVIEW OF BUSINESS
The company has achieved a turnover for the year of £14,268,091 (2022: £13,655,275) which is a year-on-year increase of 4.5%.

This resulted in a profit before tax of £1,699,051 (2022: £1,481,212).

The increase in turnover is mainly attributable to growth in the plastic injection moulding and import tooling activities of the company.

The outlook for the future remains positive and after two years of sustained growth, trading activities are expected to stabilise over the next year, with a focus on maintaining the current level of performance and profitability.

The company's financial position is strong with retained earnings now at £5,233,625 and cash reserves of £287,931.

The company has continued to invest in personnel and CRM systems to deliver excellent customer service.

PRINCIPAL RISKS AND UNCERTAINTIES
Risk is present in all parts of the business, but the directors review risk on a regular basis through our existing governance structure. The directors ultimately control these risks but believe the following are the major risks and uncertainties currently faced by the company:

Recruitment and retention
Attracting and retaining good staff is critical to delivering on growth and profitability. The company mitigates this risk by offering attractive remuneration and reward packages to employees that achieve success and contribute to the company's performance and profitability

Revenue risk
As economic recovery continues in our sector and markets, the company is well placed due to the focused approach already taken to increase efficiencies across the business, whilst investing in and developing opportunities to diversify into new products and markets.

Competitor risk
There is always competitor risk, but the overall competitive advantage of the business is that of highly experienced and trained staff with extensive customer relations and a proven sales model.

Financial risk
The company is exposed to a variety of financial risks and undertakes regular reviews to identify such risks and wherever possible introduce necessary steps and processes to mitigate and minimise such risks.

Liquidity risk
This arises from management of working capital and servicing finance charges on debt instruments. The current healthy cash balance mitigates this risk.

KEY FINANCIAL INDICATORS
Key financial indicators include:
2023 2022

Sales £14,268,091 £13,655,275
Gross Profit % 26.7% 24.0%
Net Profit % 11.9% 10.8%
Cash reserves £287,931 £518,368
Shareholders' funds £5,921,116 £4,715,847


ON BEHALF OF THE BOARD:





R M Molloy - Director


4 April 2024

PRECONOMY LIMITED (REGISTERED NUMBER: 03904224)

REPORT OF THE DIRECTORS
FOR THE YEAR ENDED 31 DECEMBER 2023

The directors present their report with the financial statements of the company for the year ended 31 December 2023.

DIVIDENDS
An interim dividend of 0.81p per share was paid on 12 April 2023. The directors recommend that no final dividend be paid.

The total distribution of dividends for the year ended 31 December 2023 will be £280,000.

DIRECTORS
The directors shown below have held office during the whole of the period from 1 January 2023 to the date of this report.

N Giles
R M Molloy
R Hammacott

FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES
Details of financial instruments and risk management policies can be found in the Strategic Report.

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), including Financial Reporting Standard 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland'. 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.

ON BEHALF OF THE BOARD:





R M Molloy - Director


4 April 2024

REPORT OF THE INDEPENDENT AUDITORS TO THE MEMBERS OF
PRECONOMY LIMITED (REGISTERED NUMBER: 03904224)

Opinion
We have audited the financial statements of Preconomy Limited (the 'company') for the year ended 31 December 2023 which comprise the Statement of Income and Retained Earnings, Statement of Financial Position, Statement of Cash Flows and Notes to the Statement of Cash Flows, 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 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.

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.

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.

REPORT OF THE INDEPENDENT AUDITORS TO THE MEMBERS OF
PRECONOMY LIMITED (REGISTERED NUMBER: 03904224)


Responsibilities of directors
As explained more fully in the Statement of Directors' Responsibilities set out on page three, 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.

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:

Following a detailed risk assessment at the planning stage, which was updated for any further risks of fraud and error identified during the fieldwork, the following areas of risk were identified:

- Revenue recognition.
- Work in progress valuation and associated provisions
- Management override of controls.

In response to the specific risk areas identified, our procedures included the following:

- In addressing revenue recognition we performed detailed and substantive testing of sales transactions on a sample basis throughout the year.
- In addressing the valuation of work in progress and associated provisions we performed detailed testing and cut off work on a sample basis of the work in progress valuation and associated provisions.
- In addressing management override of controls, we performed detailed testing of controls on a sample basis throughout the year.

We designed audit procedures to respond to the risk, recognising that the risk of not detecting a material misstatement due to fraud is higher than the risk of not detecting one resulting from error, as fraud may involve deliberate concealment by, for example, forgery or intentional misrepresentations, or through collusion. Furthermore, there are inherent limitations in the audit procedures described above and, the further removed non-compliance with laws and regulations is from the events and transactions reflected in the financial statements, the less likely we would become aware of it.

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.

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.




Paul Emmerson BSc ACA (Senior Statutory Auditor)
for and on behalf of Ashtree Audit Ltd
Statutory Auditors
Strelley Hall
Nottingham
Nottinghamshire
NG8 6PE

4 April 2024

PRECONOMY LIMITED (REGISTERED NUMBER: 03904224)

STATEMENT OF INCOME AND
RETAINED EARNINGS
FOR THE YEAR ENDED 31 DECEMBER 2023

31/12/23 31/12/22
Notes £    £   

TURNOVER 3 14,268,091 13,655,275

Cost of sales 10,462,240 10,374,855
GROSS PROFIT 3,805,851 3,280,420

Administrative expenses 2,061,478 1,723,892
OPERATING PROFIT 5 1,744,373 1,556,528

Interest receivable and similar income 28,995 297
1,773,368 1,556,825

Interest payable and similar expenses 6 74,317 75,613
PROFIT BEFORE TAXATION 1,699,051 1,481,212

Tax on profit 7 213,782 56
PROFIT FOR THE FINANCIAL YEAR 1,485,269 1,481,156

Retained earnings at beginning of year 4,028,356 2,827,200

Dividends 8 (280,000 ) (280,000 )

RETAINED EARNINGS AT END OF YEAR 5,233,625 4,028,356

PRECONOMY LIMITED (REGISTERED NUMBER: 03904224)

STATEMENT OF FINANCIAL POSITION
31 DECEMBER 2023

31/12/23 31/12/22
Notes £    £    £    £   
FIXED ASSETS
Tangible assets 9 1,337,952 1,152,550

CURRENT ASSETS
Stocks 10 1,525,234 2,025,370
Debtors 11 5,367,826 5,184,715
Cash at bank and in hand 287,931 518,368
7,180,991 7,728,453
CREDITORS
Amounts falling due within one year 12 2,263,943 3,989,390
NET CURRENT ASSETS 4,917,048 3,739,063
TOTAL ASSETS LESS CURRENT
LIABILITIES

6,255,000

4,891,613

CREDITORS
Amounts falling due after more than one year 13 (125,561 ) (175,766 )

PROVISIONS FOR LIABILITIES 16 (208,323 ) -
NET ASSETS 5,921,116 4,715,847

CAPITAL AND RESERVES
Called up share capital 17 343,746 343,746
Capital redemption reserve 343,745 343,745
Retained earnings 5,233,625 4,028,356
SHAREHOLDERS' FUNDS 5,921,116 4,715,847

The financial statements were approved by the Board of Directors and authorised for issue on 4 April 2024 and were signed on its behalf by:





R M Molloy - Director


PRECONOMY LIMITED (REGISTERED NUMBER: 03904224)

STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 DECEMBER 2023

31/12/23 31/12/22
Notes £    £   
Cash flows from operating activities
Cash generated from operations 1 858,327 313,826
Interest element of hire purchase payments paid (10,524 ) (10,581 )
Finance costs paid (63,793 ) (65,032 )
Tax paid (57 ) 1
Net cash from operating activities 783,953 238,214

Cash flows from investing activities
Purchase of tangible fixed assets (394,453 ) (119,488 )
Sale of tangible fixed assets 5,000 3,000
Interest received 28,995 297
Net cash from investing activities (360,458 ) (116,191 )

Cash flows from financing activities
New finance lease advances in year 105,978 20,340
Repayments to invoice finance (203,345 ) -
Advances from invoice finance - 129,184
Capital repayments in year (127,988 ) (116,589 )
Amount introduced by directors 280,000 280,000
Amount withdrawn by directors (428,577 ) (250,905 )
Equity dividends paid (280,000 ) (280,000 )
Net cash from financing activities (653,932 ) (217,970 )

Decrease in cash and cash equivalents (230,437 ) (95,947 )
Cash and cash equivalents at beginning of year 2 518,368 614,315

Cash and cash equivalents at end of year 2 287,931 518,368

PRECONOMY LIMITED (REGISTERED NUMBER: 03904224)

NOTES TO THE STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 DECEMBER 2023

1. RECONCILIATION OF PROFIT BEFORE TAXATION TO CASH GENERATED FROM OPERATIONS
31/12/23 31/12/22
£    £   
Profit before taxation 1,699,051 1,481,212
Depreciation charges 199,549 194,295
Loss/(profit) on disposal of fixed assets 4,502 (2,585 )
Finance costs 74,317 75,613
Finance income (28,995 ) (297 )
1,948,424 1,748,238
Decrease/(increase) in stocks 500,136 (836,723 )
Increase in trade and other debtors (56,007 ) (2,060,495 )
(Decrease)/increase in trade and other creditors (1,534,226 ) 1,462,806
Cash generated from operations 858,327 313,826

2. CASH AND CASH EQUIVALENTS

The amounts disclosed on the Statement of Cash Flows in respect of cash and cash equivalents are in respect of these Statement of Financial Position amounts:

Year ended 31 December 2023
31/12/23 1/1/23
£    £   
Cash and cash equivalents 287,931 518,368
Year ended 31 December 2022
31/12/22 1/1/22
£    £   
Cash and cash equivalents 518,368 614,315


3. ANALYSIS OF CHANGES IN NET FUNDS/(DEBT)

At 1/1/23 Cash flow At 31/12/23
£    £    £   
Net cash
Cash at bank and in hand 518,368 (230,437 ) 287,931
518,368 (230,437 ) 287,931
Debt
Finance leases (291,649 ) 22,010 (269,639 )
(291,649 ) 22,010 (269,639 )
Total 226,719 (208,427 ) 18,292

PRECONOMY LIMITED (REGISTERED NUMBER: 03904224)

NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

1. STATUTORY INFORMATION

Preconomy Limited is a private company, limited by shares , registered in England and Wales. The company's registered number and registered office address can be found on the Company Information page.

2. ACCOUNTING POLICIES

Basis of preparing the financial statements
These financial statements have been prepared in accordance with Financial Reporting Standard 102 "The Financial Reporting Standard applicable in the UK and Republic of Ireland" and the Companies Act 2006. The financial statements have been prepared under the historical cost convention.

Turnover
Turnover is recognised to the extent that the company obtains the right to consideration in exchange for its performance, which is considered to be when goods are despatched to the customer or by reference to the stage of completion agreed with customers. Turnover is measured at the fair value of the consideration receivable, excluding discounts, rebates, VAT and other sales taxes or duty, provided that the consideration can be measured reliably.

Tangible fixed assets
Depreciation on tangible fixed assets is provided at rates calculated to write off the cost, less estimated residual value, of each asset on a reducing balance basis over its expected useful life as follows:

Plant, machinery, fixtures and fittings- 50%, 25%, 20% and 10% on a reducing balance basis

Stocks
Stocks are valued at the lower of cost and net realisable value, after making due allowance for obsolete and slow moving items.

Work in progress
Work in progress is valued on the basis of cost of direct materials (including any progress payments on account) and labour plus attributable overheads based on a normal level of activity. Provision is made for any foreseeable losses where appropriate. No element of profit is included in the valuation of work in progress.

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 statement of financial position date.

Deferred tax
Deferred tax is recognised in respect of all timing differences that have originated but not reversed at the statement of financial position 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.

Foreign currencies
Assets and liabilities in foreign currencies are translated into sterling at the rates of exchange ruling at the statement of financial position date. Transactions in foreign currencies are translated into sterling at the rate of exchange ruling at the date of transaction. Exchange differences are taken into account in arriving at the operating result.

PRECONOMY LIMITED (REGISTERED NUMBER: 03904224)

NOTES TO THE FINANCIAL STATEMENTS - continued
FOR THE YEAR ENDED 31 DECEMBER 2023

2. ACCOUNTING POLICIES - continued

Hire purchase agreements
Assets obtained under hire purchase contracts or finance leases are capitalised in the balance sheet. Those held under hire purchase contracts are depreciated over their estimated useful lives. Those held under finance leases are depreciated over their estimated useful lives or the lease term, whichever is the shorter.

The interest element of these obligations is charged to profit or loss over the relevant period. The capital element of the future payments is treated as a liability.

Rentals paid under operating leases are charged to profit or loss on a straight line basis over the period of the lease.

Pension costs
The company operates a defined contribution pension scheme for employees. The assets of the scheme are held separately from those of the company. The annual contributions payable are charged to the profit and loss account in the period to which they relate.

Financial assets
Basic financial assets, including trade and other receivables, cash and bank balances and investments are initially recognised at transaction price, 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. Such assets are subsequently carried at amortised cost using the effective interest method.

At the end of each reporting period financial assets measured at amortised cost are assessed for objective evidence of impairment. 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 when (a) the contractual rights to the cash flows from the asset expire or are settled, or (b) substantially all the risks and rewards of the ownership of the asset are transferred to another party, or (c) despite having retained some significant risks and rewards of ownership, control of the asset has been transferred to another party who has the practical ability to unilaterally sell the asset to an unrelated third party without imposing additional restrictions.

Financial liabilities
Basic financial liabilities, including trade and other payables and loans from connected companies, 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 receipts discounted at a market rate of interest. Debt instruments are subsequently carried at amortised cost, using the effective interest rate method.

Trade payables are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Accounts payable are classified as current liabilities if payment is due within one year or less. If not, they are presented as non-current liabilities. Trade payables are recognised initially at transaction price and subsequently measured at amortised cost using the effective interest method.

Financial liabilities are derecognised when the liability is extinguished, that is when the contractual obligation is discharged, cancelled or expires.

3. TURNOVER

The turnover and profit before taxation are attributable to the principal activities of the company.

An analysis of turnover by class of business is given below:

31/12/23 31/12/22
£    £   
Tool making 8,473,177 8,341,023
Plastic Injection Moulding 5,794,914 5,314,252
14,268,091 13,655,275

PRECONOMY LIMITED (REGISTERED NUMBER: 03904224)

NOTES TO THE FINANCIAL STATEMENTS - continued
FOR THE YEAR ENDED 31 DECEMBER 2023

3. TURNOVER - continued

An analysis of turnover by geographical market is given below:

31/12/23 31/12/22
£    £   
United Kingdom 10,688,892 12,065,764
Europe 3,206,533 1,053,331
Rest of the World 372,666 536,180
14,268,091 13,655,275

4. EMPLOYEES AND DIRECTORS
31/12/23 31/12/22
£    £   
Wages and salaries 2,328,380 2,062,836
Social security costs 233,125 204,295
Other pension costs 76,918 54,614
2,638,423 2,321,745

The average number of employees during the year was as follows:
31/12/23 31/12/22

Production 43 37
Sales and administration 2 2
Management 13 13
58 52

31/12/23 31/12/22
£    £   
Directors' remuneration 212,150 204,721
Directors' pension contributions to money purchase schemes 3,966 3,709

The number of directors to whom retirement benefits were accruing was as follows:

Money purchase schemes 2 2

Information regarding the highest paid director is as follows:
31/12/23 31/12/22
£    £   
Emoluments etc 113,000 112,000

5. OPERATING PROFIT

The operating profit is stated after charging/(crediting):

31/12/23 31/12/22
£    £   
Other operating leases 282,453 277,422
Depreciation - owned assets 121,939 107,834
Depreciation - assets on hire purchase contracts 77,610 86,461
Loss/(profit) on disposal of fixed assets 4,502 (2,585 )
Auditors' remuneration 12,500 11,250
Foreign exchange differences (10,133 ) 26,794

PRECONOMY LIMITED (REGISTERED NUMBER: 03904224)

NOTES TO THE FINANCIAL STATEMENTS - continued
FOR THE YEAR ENDED 31 DECEMBER 2023

6. INTEREST PAYABLE AND SIMILAR EXPENSES
31/12/23 31/12/22
£    £   
Hire purchase 10,524 10,581
Factoring charges 63,793 65,032
74,317 75,613

7. TAXATION

Analysis of the tax charge
The tax charge on the profit for the year was as follows:
31/12/23 31/12/22
£    £   
Current tax:
UK corporation tax 5,509 56
Tax - Adjustment to prior year (50 ) -
Total current tax 5,459 56

Deferred tax 208,323 -
Tax on profit 213,782 56

UK corporation tax has been charged at 19% .

Reconciliation of total tax charge included in profit and loss
The tax assessed for the year is lower than the standard rate of corporation tax in the UK. The difference is explained below:

31/12/23 31/12/22
£    £   
Profit before tax 1,699,051 1,481,212
Profit multiplied by the standard rate of corporation tax in the UK of 19% (2022 -
19%)

322,820

281,430

Effects of:
Expenses not deductible for tax purposes 3,624 2,882
Capital allowances in excess of depreciation (655 ) -
Depreciation in excess of capital allowances - 8,824
Utilisation of tax losses (320,280 ) (293,080 )
Adjustments to tax charge in respect of previous periods (50 ) -
Deferred tax 208,323 -
Total tax charge 213,782 56

At the Balance Sheet date, the value of trading losses carried forward for corporation tax purposes amounted to £470,184 (2022: £2,155,868). The corporation tax relief available based on the current highest rate of corporation tax of 25% is £117,546.

8. DIVIDENDS
31/12/23 31/12/22
£    £   
Ordinary shares shares of £0.01 each
Interim 280,000 280,000

PRECONOMY LIMITED (REGISTERED NUMBER: 03904224)

NOTES TO THE FINANCIAL STATEMENTS - continued
FOR THE YEAR ENDED 31 DECEMBER 2023

9. TANGIBLE FIXED ASSETS
Plant,
machinery,
fixtures
& fittings
£   
COST
At 1 January 2023 3,813,768
Additions 394,453
Disposals (73,401 )
At 31 December 2023 4,134,820
DEPRECIATION
At 1 January 2023 2,661,218
Charge for year 199,549
Eliminated on disposal (63,899 )
At 31 December 2023 2,796,868
NET BOOK VALUE
At 31 December 2023 1,337,952
At 31 December 2022 1,152,550

Fixed assets, included in the above, which are held under hire purchase contracts are as follows:
Plant,
machinery,
fixtures
& fittings
£   
COST
At 1 January 2023 657,338
Additions 225,066
At 31 December 2023 882,404
DEPRECIATION
At 1 January 2023 205,423
Charge for year 77,610
At 31 December 2023 283,033
NET BOOK VALUE
At 31 December 2023 599,371
At 31 December 2022 451,915

10. STOCKS
31/12/23 31/12/22
£    £   
Raw materials 297,247 497,624
Work-in-progress 1,167,044 1,449,133
Finished goods 60,943 78,613
1,525,234 2,025,370

PRECONOMY LIMITED (REGISTERED NUMBER: 03904224)

NOTES TO THE FINANCIAL STATEMENTS - continued
FOR THE YEAR ENDED 31 DECEMBER 2023

11. DEBTORS: AMOUNTS FALLING DUE WITHIN ONE YEAR
31/12/23 31/12/22
£    £   
Trade debtors 4,274,893 4,625,302
Other debtors 308,496 294,428
Directors' current accounts 127,104 -
Prepayments and accrued income 657,333 264,985
5,367,826 5,184,715

12. CREDITORS: AMOUNTS FALLING DUE WITHIN ONE YEAR
31/12/23 31/12/22
£    £   
Hire purchase contracts (see note 14) 144,078 115,883
Trade creditors 1,568,287 2,811,117
Tax 5,509 107
Social security and other taxes 235,189 454,670
Other creditors 25,161 26,975
Amount owed to invoice finance 35,148 238,493
Directors' current accounts - 21,473
Accruals and deferred income 250,571 320,672
2,263,943 3,989,390

13. CREDITORS: AMOUNTS FALLING DUE AFTER MORE THAN ONE YEAR
31/12/23 31/12/22
£    £   
Hire purchase contracts (see note 14) 125,561 175,766

14. LEASING AGREEMENTS

Minimum lease payments fall due as follows:

Hire purchase contracts
31/12/23 31/12/22
£    £   
Net obligations repayable:
Within one year 144,078 115,883
Between one and five years 125,561 175,766
269,639 291,649

Non-cancellable operating leases
31/12/23 31/12/22
£    £   
Within one year 193,013 185,654
Between one and five years 260,965 433,845
453,978 619,499

PRECONOMY LIMITED (REGISTERED NUMBER: 03904224)

NOTES TO THE FINANCIAL STATEMENTS - continued
FOR THE YEAR ENDED 31 DECEMBER 2023

15. SECURED DEBTS

The following secured debts are included within creditors:

31/12/23 31/12/22
£    £   
Hire purchase contracts 269,639 291,649
Amount owed to invoice finance 35,148 238,493
304,787 530,142

The hire purchase contracts are secured on the plant and equipment to which they relate. The amount owed to the invoice finance company is secured on trade debtors.

16. PROVISIONS FOR LIABILITIES
31/12/23 31/12/22
£    £   
Deferred tax 208,323 -

Deferred
tax
£   
Provided during year 208,323
Balance at 31 December 2023 208,323

17. CALLED UP SHARE CAPITAL

Allotted, issued and fully paid:
Number: Class: Nominal 31/12/23 31/12/22
value: £    £   
34,374,606 Ordinary shares £0.01 343,746 343,746

18. PENSION COMMITMENTS

The company operates a defined contribution pension scheme the assets of which are held separately from those of the company in an independently administered fund. The pension cost charge represents contributions payable by the company and amounted to £76,918 (2022: £54,614). At the year end accrued pension charges amounted to one month's contributions totalling £25,161 (2022: £12,176).

19. DIRECTORS' ADVANCES, CREDITS AND GUARANTEES

At the balance sheet date, N Giles owed £127,103 to the company (2022: £nil was owed to the company). An amount of £428,576 was advanced during the year and £280,000 was repaid. Interest has been charged at 2.5% resulting in a charge of £495 for the year.The loan is repayable on demand.

20. ULTIMATE CONTROLLING PARTY

The controlling party is N Giles.

The ultimate controlling party is N Giles.