Company registration number 05981051 (England and Wales)
ADMI Limited
Annual report and financial statements
For the year ended 31 December 2022
ADMI Limited
Company information
Directors
Mr A Grecian
Mr M P Dickinson
Secretary
Mr A Grecian
Company number
05981051
Registered office
Unit 2
Rosevale Business Park
Newcastle under Lyme
Staffordshire
ST5 7UB
Auditor
DJH Mitten Clarke Audit Limited
The Glades
Festival Way
Festival Park
Stoke-on-Trent
Staffordshire
ST1 5SQ
ADMI Limited
Contents
Page
Strategic report
1 - 2
Directors' report
3 - 4
Independent auditor's report
5 - 8
Statement of comprehensive income
9
Statement of financial position
10
Statement of changes in equity
11
Notes to the financial statements
12 - 27
ADMI Limited
Strategic report
For the year ended 31 December 2022
- 1 -
The directors present the strategic report for the year ended 31 December 2022.
Review of the business
We seek to present a balanced and comprehensive review of our business financial performance and position. This review is consistent with the size and non-complex nature of our business model with the aim to account for the risks and uncertainties we face.
The financial performance of the group has been consistent with that of 2020 results and Pre Covid. Consumer demand for products remains strong.
The Directors and Senior Management knowledge of the market has enabled the company to consolidate in 2022 with a plan to expand the business and increase its market share in 2023 and beyond. We have recruited further senior management to add to the experienced and dynamic team already in place.
The strategy remains in continuing to grow our reputation for being creators of gaming PC’s of unbeatable performance and value. Providing quality products and excellent customer service, and therefore gaining market share in the UK consumer market.
The consolidated position in 2022 resulted in a gross margin of £5.6m (2021 - £8.5m) and a net profit before taxation of £673k (2021 - £3.4m). Net assets at the year end were £2.5m (2021 - £2.3m).
Principal risks and uncertainties
The Directors are continually assessing risks and uncertainties and are confident that by continuing to work closely with its suppliers, listening to its customer base, identifying new channels and product opportunities; whilst drawing on its in depth knowledge of the market the business and investing in its infrastructure, the business will continue to enjoy profitable growth. The overall assessment of risk is that due to the non-complex nature of the business, we face a relatively low level of risk.
The online gaming PC market remains strong, and we are confident that that our products will very much remain in demand. Through new supply chains and expanding global markets, the group expect turnover and profitability to increase.
Financial instrument risk
Credit risk
The company manages its trade debtors and trade creditors to ensure sufficient cash is available to meet operational needs. Trade debtors and risk of bad debts are minimal due to the business model.
Liquidity risk
The company funds its working capital needs through the generation and retention of profits and using traditional banking facilities.
ADMI Limited
Strategic report (continued)
For the year ended 31 December 2022
- 2 -
Development and performance
Future Developments
For the forthcoming year, the Directors are placing an emphasis on business consolidation with some expansion whilst maintaining existing gross margins. The Directors are targeting new and expanding global markets.
Other developments: -
The business has secured a new 37,000 sq ft. premises which has enabled the company to expand further and secure this business expansion for the next 5-10 years.
The founder directors have reduced their dependence in the business by expanding the senior management team. The Directors continue to review and strengthen the structure where appropriate.
To identify further opportunities to generate revenue.
We strive to continue to provide our customers with the highest level of service before, during and after their purchase - From click, to add, to tech support.
Key performance indicators
The company achieved a turnover of £28.9m (2021 - £41.3m), a gross profit of £5.6m (2021: £8.4m) and a gross profit margin of 19.3% (2021: 20.5%).
Mr A Grecian
Director
1 February 2024
ADMI Limited
Directors' report
For the year ended 31 December 2022
- 3 -
The directors present their annual report and financial statements for the year ended 31 December 2022.
Principal activities
The principal activity of the company continues to be that of online retailer of gaming PCs and affiliated products; selling through both our own website and third party e-commerce platforms.
Results and dividends
The results for the year are set out on page 9.
Ordinary dividends were paid amounting to £343,000 (2021: £1,395,000). 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:
Mr A Grecian
Mr M P Dickinson
Statement of directors' responsibilities
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.
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.
ADMI Limited
Directors' report (continued)
For the year ended 31 December 2022
- 4 -
On behalf of the board
Mr A Grecian
Director
1 February 2024
ADMI Limited
Independent auditor's report
To the members of ADMI Limited
- 5 -
Opinion
We have audited the financial statements of ADMI Limited (the 'company') for the year ended 31 December 2022 which comprise the statement of comprehensive income, the statement of financial position, 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 Financial Reporting Standard 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice).
In our opinion the financial statements:
give a true and fair view of the state of the company's affairs as at 31 December 2022 and of its profit for the year then ended;
have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and
have been prepared in accordance with the requirements of the Companies Act 2006.
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.
ADMI Limited
Independent auditor's report (continued)
To the members of ADMI Limited
- 6 -
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.
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.
ADMI Limited
Independent auditor's report (continued)
To the members of ADMI Limited
- 7 -
Our approach to identifying and assessing the risks of material misstatement in respect of irregularities, including fraud and non-compliance with laws and regulations, was as follows:
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 company;
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.
We assessed the susceptibility of the company’s financial statements to material misstatement, including obtaining an understanding of how fraud might occur, by:
making enquiries of management as to where they considered there was susceptibility to fraud, their knowledge of actual, suspected and alleged fraud; and
considering the internal controls in place to mitigate risks of fraud and non compliance with laws and regulations.
To address the risk of fraud through management bias and override of controls, we:
performed analytical procedures to identify any unusual or unexpected relationships;
tested journal entries to identify unusual transactions;
assessed whether judgements and assumptions made in determining the accounting estimates were indicative of potential bias; and
investigated the rationale behind significant or unusual transactions.
In response to the risk of irregularities and non-compliance with laws and regulations, we designed procedures which included, but were not limited to:
agreeing financial statement disclosures to underlying supporting documentation;
enquiring of management as to actual and potential litigation and claims; and
reviewing correspondence with HMRC, reviewing legal ad professional fees incurred during the period to identify any potential indications of non-compliance with laws and regulations.
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.
ADMI Limited
Independent auditor's report (continued)
To the members of ADMI Limited
- 8 -
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.
Stacey Parr FCCA
Senior Statutory Auditor
For and on behalf of DJH Mitten Clarke Audit Limited
2 February 2024
Accountants
Statutory Auditor
The Glades
Festival Way
Festival Park
Stoke-on-Trent
Staffordshire
ST1 5SQ
ADMI Limited
Statement of comprehensive income
For the year ended 31 December 2022
- 9 -
2022
2021
as restated
Notes
£
£
Turnover
3
28,978,862
41,327,394
Cost of sales
(23,378,129)
(32,832,090)
Gross profit
5,600,733
8,495,304
Distribution costs
(3,972,717)
(4,556,978)
Administrative expenses
(970,329)
(568,416)
Other operating income
33,428
7,574
Operating profit
4
691,115
3,377,484
Interest payable and similar expenses
8
(17,208)
162
Profit before taxation
673,907
3,377,646
Tax on profit
9
(142,296)
(644,356)
Profit for the financial year
531,611
2,733,290
The income statement has been prepared on the basis that all operations are continuing operations.
ADMI Limited
Statement of financial position
As at 31 December 2022
31 December 2022
- 10 -
2022
2021
as restated
Notes
£
£
£
£
Fixed assets
Intangible assets
11
41,020
45,593
Tangible assets
12
580,257
493,974
Investment property
13
213,828
213,828
835,105
753,395
Current assets
Stocks
14
4,599,401
4,999,034
Debtors
15
1,993,378
1,161,248
Cash at bank and in hand
284,040
1,577,367
6,876,819
7,737,649
Creditors: amounts falling due within one year
16
(4,785,619)
(5,826,493)
Net current assets
2,091,200
1,911,156
Total assets less current liabilities
2,926,305
2,664,551
Creditors: amounts falling due after more than one year
17
(307,628)
(363,233)
Provisions for liabilities
Provisions
20
110,052
Deferred tax liability
21
21,880
3,184
(131,932)
(3,184)
Net assets
2,486,745
2,298,134
Capital and reserves
Called up share capital
23
68
68
Capital redemption reserve
24
34
34
Profit and loss reserves
25
2,486,643
2,298,032
Total equity
2,486,745
2,298,134
The financial statements were approved by the board of directors and authorised for issue on 1 February 2024 and are signed on its behalf by:
Mr A Grecian
Mr M P Dickinson
Director
Director
Company Registration No. 05981051
ADMI Limited
Statement of changes in equity
For the year ended 31 December 2022
- 11 -
Share capital
Capital redemption reserve
Profit and loss reserves
Total
Notes
£
£
£
£
As restated for the period ended 31 December 2021:
Balance at 1 January 2021
68
34
959,742
959,844
Year ended 31 December 2021:
Profit and total comprehensive income for the year
-
-
2,733,290
2,733,290
Dividends
10
-
-
(1,395,000)
(1,395,000)
Balance at 31 December 2021
68
34
2,298,032
2,298,134
Year ended 31 December 2022:
Profit and total comprehensive income for the year
-
-
531,611
531,611
Dividends
10
-
-
(343,000)
(343,000)
Balance at 31 December 2022
68
34
2,486,643
2,486,745
ADMI Limited
Notes to the financial statements
For the year ended 31 December 2022
- 12 -
1
Accounting policies
Company information
ADMI Limited is a private company limited by shares incorporated in England and Wales. The registered office is Unit 2, Rosevale Business Park, Newcastle under Lyme, Staffordshire, ST5 7UB.
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 investment properties 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: 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 33 ‘Related Party Disclosures’: Compensation for key management personnel.
The financial statements of the company are consolidated in the financial statements of ADMI Holdings Limited. These consolidated financial statements are available from its registered office, Unit 2, Rosevale Business Park, Newcastle Under Lyme, Staffordshire, ST5 7UB.
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 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 delivery 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.
ADMI Limited
Notes to the financial statements (continued)
For the year ended 31 December 2022
1
Accounting policies
(Continued)
- 13 -
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.
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:
Website
33% on cost per annum
Trademark
10% on cost per annum
1.5
Tangible fixed assets
Tangible fixed assets are initially measured at cost and subsequently measured at cost, 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:
Freehold land and buildings
2% on cost per annum
Leasehold improvements
33% on net book value
Plant and equipment
15% on net book value
Fixtures and fittings
15% on net book value
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 the Statement of Comprehensive Income.
1.6
Investment property
Investment property, which is property held to earn rentals and/or for capital appreciation, is initially recognised at cost, which includes the purchase cost and any directly attributable expenditure. Subsequently it is measured at fair value at the reporting end date. Changes in fair value are recognised in the Statement of Comprehensive Income.
1.7
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.
Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.
If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (or cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised immediately in the Statement of Comprehensive Income unless the relevant asset is carried at a revalued amount, in which case the impairment loss is treated as a revaluation decrease.
ADMI Limited
Notes to the financial statements (continued)
For the year ended 31 December 2022
1
Accounting policies
(Continued)
- 14 -
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 (or cash-generating unit) 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 (or cash-generating unit) in prior years. A reversal of an impairment loss is recognised immediately in the Statement of Comprehensive Income, 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.
1.8
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.
Stocks held for distribution at no or nominal consideration are measured at the lower of cost and replacement cost, adjusted where applicable for any loss of service potential.
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.
1.9
Cash and cash equivalents
Cash and cash equivalents are basic financial assets and include cash in hand.
1.10
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 statement of financial position 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 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
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.
ADMI Limited
Notes to the financial statements (continued)
For the year ended 31 December 2022
1
Accounting policies
(Continued)
- 15 -
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, bank loans and amounts due to fellow group 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 payments discounted at a market rate of interest. Financial liabilities classified as payable within one year are not amortised.
Debt instruments are subsequently carried at amortised cost, using the effective interest rate method.
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.
Other financial liabilities
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.
ADMI Limited
Notes to the financial statements (continued)
For the year ended 31 December 2022
1
Accounting policies
(Continued)
- 16 -
Derecognition of financial liabilities
Financial liabilities are derecognised when the company’s contractual obligations expire or are discharged or cancelled.
1.11
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.
1.12
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 income statement 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 income statement, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity.
1.13
Provisions
Provisions are recognised when the company has a legal or constructive present obligation as a result of a past event, it is probable that the company will be required to settle that obligation and a reliable estimate can be made of the amount of the obligation.
The amount recognised as a provision is the best estimate of the consideration required to settle the present obligation at the reporting end date, taking into account the risks and uncertainties surrounding the obligation. Where the effect of the time value of money is material, the amount expected to be required to settle the obligation is recognised at present value. When a provision is measured at present value, the unwinding of the discount is recognised as a finance cost in profit or loss in the period in which it arises.
1.14
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.
1.15
Retirement benefits
Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.
ADMI Limited
Notes to the financial statements (continued)
For the year ended 31 December 2022
1
Accounting policies
(Continued)
- 17 -
1.16
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 statement of financial position 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 the Statement of Comprehensive Income 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 leases asset are consumed.
Rental income from operating leases is recognised on a straight line basis over the term of the relevant lease. Initial direct costs incurred in negotiating and arranging an operating lease are added to the carrying amount of the leased asset and recognised on a straight line basis over the lease term.
1.17
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 the Statement of Comprehensive Income.
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.
The directors consider that there are no critical judgements, key estimates or assumptions used in preparing the financial statements.
3
Turnover
2022
2021
£
£
Turnover analysed by geographical market
United Kingdom
24,862,260
40,481,534
European Union
4,116,602
845,860
28,978,862
41,327,394
ADMI Limited
Notes to the financial statements (continued)
For the year ended 31 December 2022
- 18 -
4
Operating profit
2022
2021
Operating profit for the year is stated after charging:
£
£
Exchange losses
59,843
26,197
Depreciation of owned tangible fixed assets
42,205
16,524
Depreciation of tangible fixed assets held under finance leases
1,418
-
Amortisation of intangible assets
22,516
4,205
Operating lease charges
107,178
27,055
5
Auditor's remuneration
2022
2021
Fees payable to the company's auditor and associates:
£
£
For audit services
Audit of the financial statements of the company
17,700
18,000
6
Employees
The average monthly number of persons (including directors) employed by the company during the year was:
2022
2021
Number
Number
Direct
37
42
Admin
6
5
Directors
2
2
Total
45
49
Their aggregate remuneration comprised:
2022
2021
£
£
Wages and salaries
927,505
946,919
Social security costs
64,114
58,987
Pension costs
15,179
14,474
1,006,798
1,020,380
ADMI Limited
Notes to the financial statements (continued)
For the year ended 31 December 2022
- 19 -
7
Directors' remuneration
2022
2021
£
£
Remuneration for qualifying services
22,740
16,740
8
Interest payable and similar expenses
2022
2021
£
£
Interest on bank overdrafts and loans
13,997
(162)
Other interest
3,211
17,208
(162)
9
Taxation
2022
2021
£
£
Current tax
UK corporation tax on profits for the current period
123,600
644,356
Deferred tax
Origination and reversal of timing differences
18,696
Total tax charge
142,296
644,356
ADMI Limited
Notes to the financial statements (continued)
For the year ended 31 December 2022
9
Taxation
(Continued)
- 20 -
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:
2022
2021
£
£
Profit before taxation
673,907
3,377,646
Expected tax charge based on the standard rate of corporation tax in the UK of 19.00% (2021: 19.00%)
128,042
641,753
Tax effect of expenses that are not deductible in determining taxable profit
9,335
Effect of change in corporation tax rate
5,252
Depreciation on assets not qualifying for tax allowances
4,350
Under/(over) provided in prior years
204
Deferred tax adjustments in respect of prior years
(17)
Depreciation
3,140
Amortisation
799
Capital allowances
(1,540)
Enhanced allowances
(4,666)
Taxation charge for the year
142,296
644,356
Factors that may affect future tax charges:
Legislation introduced in the Finance Act 2021 (enacted 10 June 2021) increased the main rate of corporation tax from 19% to 25% with effect from 1 April 2023. Given the imminent change to the main corporation tax rate, deferred tax has been provided for at 25% where appropriate.
10
Dividends
2022
2021
£
£
Interim paid
343,000
1,395,000
ADMI Limited
Notes to the financial statements (continued)
For the year ended 31 December 2022
- 21 -
11
Intangible fixed assets
Website
Trademark
Total
£
£
£
Cost
At 1 January 2022
56,786
922
57,708
Additions
17,943
17,943
At 31 December 2022
74,729
922
75,651
Amortisation and impairment
At 1 January 2022
11,563
552
12,115
Amortisation charged for the year
22,424
92
22,516
At 31 December 2022
33,987
644
34,631
Carrying amount
At 31 December 2022
40,742
278
41,020
At 31 December 2021
45,223
370
45,593
12
Tangible fixed assets
Freehold land and buildings
Leasehold improvements
Plant and equipment
Fixtures and fittings
Total
£
£
£
£
£
Cost
At 1 January 2022
507,907
24,061
7,585
539,553
Additions
62,466
67,440
129,906
At 31 December 2022
507,907
62,466
91,501
7,585
669,459
Depreciation and impairment
At 1 January 2022
32,165
7,988
5,426
45,579
Depreciation charged in the year
10,158
20,614
12,527
324
43,623
At 31 December 2022
42,323
20,614
20,515
5,750
89,202
Carrying amount
At 31 December 2022
465,584
41,852
70,986
1,835
580,257
At 31 December 2021
475,742
16,073
2,159
493,974
The net carrying value of tangible fixed assets includes the following in respect of assets held under finance leases or hire purchase contracts.
2022
2021
£
£
Plant and equipment
8,034
ADMI Limited
Notes to the financial statements (continued)
For the year ended 31 December 2022
12
Tangible fixed assets
(Continued)
- 22 -
Freehold land and buildings with a carrying amount of £465,584 (2021 - £475,742) have been pledged to secure borrowings of the company. The company is not allowed to pledge these assets as security for other borrowings or to sell them to another entity.
13
Investment property
2022
£
Fair value
At 1 January 2022 and 31 December 2022
213,828
Investment property comprises of commercial property. The fair value of the investment property has been arrived at on the basis of a valuation carried out at by the directors. The valuation was made on an open market value basis by reference to market evidence of transaction prices for similar properties.
14
Stocks
2022
2021
£
£
Raw materials and consumables
4,599,401
4,999,034
15
Debtors
2022
2021
Amounts falling due within one year:
£
£
Trade debtors
1,251,518
939,036
Other debtors
556,497
184,334
Prepayments and accrued income
185,363
37,878
1,993,378
1,161,248
ADMI Limited
Notes to the financial statements (continued)
For the year ended 31 December 2022
- 23 -
16
Creditors: amounts falling due within one year
2022
2021
Notes
£
£
Bank loans
18
51,313
49,200
Obligations under finance leases
19
9,122
Trade creditors
3,317,133
3,168,790
Amounts owed to group undertakings
1,000,000
1,000,000
Corporation tax
326,934
644,275
Other taxation and social security
18,334
375,350
Other creditors
8,551
436,525
Accruals and deferred income
54,232
152,353
4,785,619
5,826,493
The bank loan is secured by fixed and floating charges over the assets of the company.
Obligations under finance leases are secured by the assets to which they relate. See "Finance Lease Obligations" for further information.
Amounts owed to group undertakings are unsecured, interest free, have no fixed date of repayment and are repayable on demand.
17
Creditors: amounts falling due after more than one year
2022
2021
Notes
£
£
Bank loans and overdrafts
18
307,628
363,233
The bank loan is secured by fixed and floating charges over the assets of the company.
18
Loans and overdrafts
2022
2021
£
£
Bank loans
358,941
412,433
Payable within one year
51,313
49,200
Payable after one year
307,628
363,233
The bank loan bears variable interest at the Bank of England base rate plus 2.65% and is payable in monthly instalments. The loan matures in November 2023.
ADMI Limited
Notes to the financial statements (continued)
For the year ended 31 December 2022
- 24 -
19
Finance lease obligations
2022
2021
Future minimum lease payments due under finance leases:
£
£
Within one year
9,122
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. All leases are on a fixed repayment basis and no arrangements have been entered into for contingent rental payments.
Obligations under finance leases are secured by the assets to which they relate.
20
Provisions for liabilities
2022
2021
£
£
Warranty
110,052
-
Movements on provisions:
Warranty
£
At 1 January 2022
410,052
Utilisation of provision
(300,000)
At 31 December 2022
110,052
21
Deferred taxation
The following are the major deferred tax liabilities and assets recognised by the company and movements thereon:
Liabilities
Liabilities
2022
2021
Balances:
£
£
Accelerated capital allowances
21,880
3,184
2022
Movements in the year:
£
Liability at 1 January 2022
3,184
Charge to profit or loss
18,696
Liability at 31 December 2022
21,880
ADMI Limited
Notes to the financial statements (continued)
For the year ended 31 December 2022
21
Deferred taxation
(Continued)
- 25 -
The deferred tax liability set out above is expected to reverse within 12 months and relates to accelerated capital allowances that are expected to mature within the same period.
22
Retirement benefit schemes
2022
2021
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
15,179
14,474
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.
23
Share capital
2022
2021
2022
2021
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary shares of £1 each
52
52
52
52
Ordinary A shares of £1 each
8
8
8
8
Ordinary B shares of £1 each
8
8
8
8
68
68
68
68
Ordinary shares have attached to them full voting, dividend and capital distribution (including on winding up) rights; they do not confer any rights of redemption.
Ordinary A and B shares have attached to them full voting, dividend and capital distribution (including on winding up) rights; they do not confer any rights of redemption.
24
Capital redemption reserve
This reserve represents the redemption of shares.
25
Profit and loss reserves
The retained earnings reserve holds the retained earnings of the Company, after the deduction of any dividends paid in the period.
ADMI Limited
Notes to the financial statements (continued)
For the year ended 31 December 2022
- 26 -
26
Operating lease commitments
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:
2022
2021
£
£
Within one year
274,730
33,000
Between two and five years
915,151
39,690
1,189,881
72,690
Lessor
The operating lease is to third parties. The lease is negotiated over a term of 5 years. There are no options in place for either party to extend the lease terms.
At the reporting end date the company had contracted with tenants for the following minimum lease payments:
2022
2021
£
£
Within one year
22,000
Between two and five years
82,274
104,274
27
Events after the reporting date
On 2nd October 2023 the company’s premises were broken into and just over £1 Million of stock was stolen. The Directors have been working closely with the police and have thus far managed to recover just under £300,000. Investigations are ongoing and the company is hopeful that they will be able to recover more.
The company’s busiest period of the year is quarter 4 and trading in 2023 in this period was excellent. The company has recovered well from the loss of stock and cash-flow is much improved and back to normal.
28
Related party transactions
The company is a wholly owned subsidiary of ADMI Holdings Limited and has taken advantage of the exemption conferred by FRS 102 not to disclose transactions with ADMI Holdings Limited.
ADMI Limited
Notes to the financial statements (continued)
For the year ended 31 December 2022
- 27 -
29
Ultimate controlling party
The ultimate parent company is ADMI Holdings Limited, incorporated in England and Wales. The registered office is Unit 2, Rosevale Business Park, Parkhouse, Newcastle Under Lyme, ST5 7UB.
The smallest and largest group in which the results of the company are consolidated is that headed by ADMI Holdings Limited, incorporated in the United Kingdom, registered office is Unit 2, Rosevale Business Park, Parkhouse, Newcastle Under Lyme, ST5 7UB. The consolidated accounts of this company are available to the public and may be obtained from Companies House.
30
Prior period adjustment
Changes to the statement of financial position
As previously reported
Adjustment
As restated at 31 Dec 2021
£
£
£
Net assets
2,298,134
-
2,298,134
Capital and reserves
Total equity
2,298,134
-
2,298,134
Changes to the income statement
As previously reported
Adjustment
As restated
Period ended 31 December 2021
£
£
£
Cost of sales
(37,349,918)
4,517,828
(32,832,090)
Distribution costs
-
(4,556,978)
(4,556,978)
Administrative expenses
(607,566)
39,150
(568,416)
Profit for the financial period
2,733,290
-
2,733,290
Notes to reconciliation
During the year the directors reviewed the classification of sales expenditure and determined it was more appropriate to include a proportion of costs previously classified as cost of sales to distribution costs. The directors also reviewed the classification of wages costs and determined a different cost split. This has not impacted the net asset value or the profits already reported.
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