REGISTERED NUMBER: |
CORNELIUS ELECTRONICS LIMITED |
STRATEGIC REPORT, |
REPORT OF THE DIRECTORS AND |
FINANCIAL STATEMENTS |
FOR THE YEAR ENDED |
30 JUNE 2023 |
REGISTERED NUMBER: |
CORNELIUS ELECTRONICS LIMITED |
STRATEGIC REPORT, |
REPORT OF THE DIRECTORS AND |
FINANCIAL STATEMENTS |
FOR THE YEAR ENDED |
30 JUNE 2023 |
CORNELIUS ELECTRONICS LIMITED (REGISTERED NUMBER: 01729062) |
CONTENTS OF THE FINANCIAL STATEMENTS |
FOR THE YEAR ENDED 30 JUNE 2023 |
Page |
Company Information | 1 |
Strategic Report | 2 |
Report of the Directors | 5 |
Report of the Independent Auditors | 7 |
Income Statement | 10 |
Other Comprehensive Income | 11 |
Balance Sheet | 12 |
Statement of Changes in Equity | 14 |
Notes to the Financial Statements | 15 |
CORNELIUS ELECTRONICS LIMITED |
COMPANY INFORMATION |
FOR THE YEAR ENDED 30 JUNE 2023 |
DIRECTORS: |
SECRETARY: |
REGISTERED OFFICE: |
REGISTERED NUMBER: |
AUDITORS: |
Chartered Accountants |
And Statutory Auditors |
Ground Floor Cardigan House |
Castle Court |
Swansea Enterprise Park |
Swansea |
SA7 9LA |
CORNELIUS ELECTRONICS LIMITED (REGISTERED NUMBER: 01729062) |
STRATEGIC REPORT |
FOR THE YEAR ENDED 30 JUNE 2023 |
The directors present their strategic report for the year ended 30 June 2023. |
REVIEW OF BUSINESS |
The principal activity of the company in the year under review was that of manufacturing of wire harnesses. |
The trading activities of the company continued with good levels of profits, showing a gross profit of £3,482,749 (2022: £2,822,803) and a profit before tax of £717,810 (2022: £615,161). |
2023 | 2022 | 2021 | 2020 | 2019 |
Turnover £'000 | 19,068 | 17,161 | 12,455 | 12,830 | 13,114 |
Gross Profit Margin | 18% | 16% | 20% | 16% | 19% |
Average Number of Employees | 221 | 226 | 183 | 198 | 215 |
The directors are pleased to report a significant growth in turnover for the year following the initial bounce back last year after two years of decrease following the outbreak of Covid-19. Through control of costs in 2023 the company were able to improve its gross profit margin following a reduction in 2022 due to the raise in costs and cost of living rates. |
The company faced numerous challenges in recent years, supply chain being one as turnover levels recovered and increased significantly. However the company maintained stable levels of availability due to forward planning, close relationships with suppliers and investing working capital into its stock levels. Through this the company was able to limit supply disruption as much as possible and met the needs of its customers. |
The company has continued the investment in infrastructure and the company's bankers are fully supportive of the current trading position and of the plans moving forward. As a result, the director's consider the company to be well placed to respond to new opportunities or volatility in economic conditions and market demand. The company maintains its strategy for growth aiming to increase its market share within its broad industry sectors and maintaining its valued existing customer relationships. |
The directors monitor the performance of the business both financially and operationally through Key Performance Indicators which cover all areas of the business. They include turnover, profit margins, quality indicators and health & Safety indicators. |
CORNELIUS ELECTRONICS LIMITED (REGISTERED NUMBER: 01729062) |
STRATEGIC REPORT |
FOR THE YEAR ENDED 30 JUNE 2023 |
PRINCIPAL RISKS AND UNCERTAINTIES |
The company's risk management processes minimise its exposure to unforeseen events and identified risks, allowing the business to focus on delivering its strategic objectives. The directors regularly reviews the principal risks facing the company including those that would impact its business model, future performance and solvency.The directors ensure that the nature and extent of significant risks facing the business are identified and adequately managed. |
The company uses various financial instruments which include cash and various items such as trade debtors and trade creditors that arise directly from its operations. The main purpose of these financial instruments is to raise finance for the company's operations. |
The directors will continually monitor the principal and other risks and uncertainties for the business. The directors will closely monitor business performance, including through the use of monthly key performance indicators, and will take appropriate action, including amendments to its business model, if and when required. |
The following are the risks the directors believe to be the most important risks and uncertainties that may impact on the company's ability to deliver its strategy effectively. |
Liquidity risk |
Liquidity risk refers to the risk that the Company is unable to meet its obligations as they fall due owing to insufficient financial resources. The company manages financial risk by ensuring sufficient liquidity is available to meet its forecast needs. Short-term flexibility is achieved by overdraft facilities and sales financing. The company also finances some of its investments in tangible fixed assets through hire purchase contracts. |
Interest rate risk |
The company finances its operations through a combination of retained profits, bank overdrafts, sales financing, long term loans and finance lease or hire purchase agreements. Long term loans are repayable from June 2021 over a 5 year period at a fixed interest rate. The interest rate on sales financing is variable. The company manages its exposure to interest rate fluctuations on its hire purchase agreements and finance leases by entering into fixed rate agreements. The company manages the liquidity risk by ensuring there are sufficient funds to meet the payments. |
Credit risk |
The company's principal financial assets are cash and trade debtors. The principal credit risk arises from its trade debtors. In order to manage credit risk the directors set limits for customers based on a combination of payment history and third party credit references. |
Given the size of the company, the directors have not delegate the responsibility of monitoring the financial risk management to a sub-committee of the board. The policies set by the board of directors are implemented by the company's finance department. |
Current economic climate |
In light of recent inflation that has driven up costs of acquiring goods in the current economy as well as a rise in employee wages the directors continually review its investment strategies and pricing structure to mitigate this risk. |
Supply Chain |
There is the risk that the supply chain could affect the supply of components. The company manages its assets to ensure that there are contingency measures in place in such an event. |
Cyber / IT Risks |
IT risks consist of data loss (both commercial and financial), the inability to operate effectively due to technical fault, and/or system intrusion or hacking. The risk of inadequate protection of consumer data could lead to reputational damage and financial loss due to penalties and fines. The directors have a clear strategy aimed at addressing the principal exposures and risks likely to affect its brand. |
Health & Safety, Quality and Environment |
The company has in place a rigorous health and safety policy and is committed to adhering to all legislation requirements imposed on it. The company will also look to maintain its enhanced policies. |
The company holds quality management and environmental accreditation e.g. IS014001, ISO9001, all of which ensure customers can have confidence in our products and commitment to reduce our carbon footprint. |
Litigation / Regulatory |
The Company is committed to complying with relevant laws and regulations. |
CORNELIUS ELECTRONICS LIMITED (REGISTERED NUMBER: 01729062) |
STRATEGIC REPORT |
FOR THE YEAR ENDED 30 JUNE 2023 |
KEY PERFORMANCE INDICATORS |
The directors carefully monitor results and consider that the company's key performance indicators are financial, namely turnover, operating profit and net assets: |
2023 | 2022 |
£'000000 | £'000000 |
Turnover | 19,068 | 17,161 |
Profit before taxation | 718 | 615 |
Net assets | 3,095 | 2,978 |
These give a measure of work undertaken and measure of profit generated from core operations before the impact the impact of taxation. |
FUTURE DEVELOPMENTS |
The company's aim is to continue growth through diversification and increased sales levels together with expansion and further investment in the infrastructure of the business. |
ON BEHALF OF THE BOARD: |
CORNELIUS ELECTRONICS LIMITED (REGISTERED NUMBER: 01729062) |
REPORT OF THE DIRECTORS |
FOR THE YEAR ENDED 30 JUNE 2023 |
The directors present their report with the financial statements of the company for the year ended 30 June 2023. |
DIVIDENDS |
An interim dividend of £ |
The total distribution of dividends for the year ended 30 June 2023 will be £ |
EVENTS SINCE THE END OF THE YEAR |
Information relating to events since the end of the year is given in the notes to the financial statements. |
DIRECTORS |
The directors shown below have held office during the whole of the period from 1 July 2022 to the date of this report. |
FINANCIAL RISK MANAGEMENT |
The company's operations expose it to a variety of financial risks primarily interest rate and liquidity risks. The company manages a range of short term variable interest rate finance to ensure the company has sufficient funds for its operations. |
Given the size of the company, the directors have not delegated the responsibility of monitoring the financial risk management to a sub-committee of the board. The policies set by the board of directors are implemented by the company's finance department. |
DISCLOSURE IN THE STRATEGIC REPORT |
The company has chosen in accordance with s414C(11) of the Companies Act 2006 to set out in the company's strategic report information required by Schedule 7 of the Large and Medium-sized Companies and Groups (Accounts and Reports) Regulations 2008 to be contained in the director's report. It has done so in respect of future developments and financial risk management. |
STATEMENT OF DIRECTORS' RESPONSIBILITIES |
The directors are responsible for preparing the Strategic Report, the Report of the Directors and the financial statements in accordance with applicable law and regulations. |
Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the company and of the profit or loss of the company for that period. In preparing these financial statements, the directors are required to: |
- | select suitable accounting policies and then apply them consistently; |
- | make judgements and accounting estimates that are reasonable and prudent; |
- | prepare the financial statements on the going concern basis unless it is inappropriate to presume that the company will continue in business. |
The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the company's transactions and disclose with reasonable accuracy at any time the financial position of the company and enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities. |
STATEMENT AS TO DISCLOSURE OF INFORMATION TO AUDITORS |
So far as the directors are aware, there is no relevant audit information (as defined by Section 418 of the Companies Act 2006) of which the company's auditors are unaware, and each director has taken all the steps that he ought to have taken as a director in order to make himself aware of any relevant audit information and to establish that the company's auditors are aware of that information. |
CORNELIUS ELECTRONICS LIMITED (REGISTERED NUMBER: 01729062) |
REPORT OF THE DIRECTORS |
FOR THE YEAR ENDED 30 JUNE 2023 |
AUDITORS |
The auditors, Bevan Buckland LLP, will be proposed for re-appointment. |
ON BEHALF OF THE BOARD: |
REPORT OF THE INDEPENDENT AUDITORS TO THE MEMBERS OF |
CORNELIUS ELECTRONICS LIMITED |
Opinion |
We have audited the financial statements of Cornelius Electronics Limited (the 'company') for the year ended 30 June 2023 which comprise the Income Statement, Other Comprehensive Income, Balance Sheet, Statement of Changes in Equity and Notes to the Financial Statements, including a summary of significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland' (United Kingdom Generally Accepted Accounting Practice). |
In our opinion the financial statements: |
- | give a true and fair view of the state of the company's affairs as at 30 June 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 |
CORNELIUS ELECTRONICS LIMITED |
Responsibilities of directors |
As explained more fully in the Statement of Directors' Responsibilities set out on page five, 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. We identify and assess the risks of material misstatement of the Financial Statements, whether due to fraud or error, and then, design and perform audit procedures responsive to those risks, including obtaining audit evidence that is sufficient and appropriate to provide a basis for our opinion. |
We discussed our audit independence complying with the Revised Ethical Standard 2019 with the engagement team members whilst planning the audit and continually monitored our independence throughout the process. |
The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below: |
- | enquiring of management, including obtaining and reviewing support documentation, concerning the company's policies and procedures relating to: |
- | identifying, evaluating, and complying with laws and regulations and whether they were aware of any instances of non-compliance; |
- | detecting and responding to the risks of fraud and whether they have knowledge of any actual, suspected or alleged fraud; |
- | internal controls established to mitigate risks related to fraud or non-compliance with laws and regulations; |
- | discussing among the engagement team how and where fraud might occur in the Financial Statements and any potential indicators of fraud. |
- | obtaining an understanding of the legal and regulatory frameworks that the company operates in, focusing on those laws and regulations that had a direct effect on the Financial Statements or that had a fundamental effect on the operations of the company, The key laws and regulations we considered in this context included the UK Companies Act and relevant tax legislation. |
In addition to the above, our procedures to respond to risks identified included the following: |
- | reviewing the financial statement disclosures and testing to supporting documentation to assess compliance with relevant laws and regulations; |
- | enquiring of management concerning actual and potential litigation and claims; performing analytical procedures to identify any unusual or unexpected relationships that may indicate risks of material misstatement due to fraud; |
- | reading minutes of meetings of those charged with governance and reviewing correspondence with HMRC; |
- | In addressing the risk of fraud through management override of controls, testing the appropriateness of journal entries and other adjustments; |
- | assessing whether the judgements made in making accounting estimates are indicative of a potential bias; and |
- | evaluating the business rationale of any significant transactions that are unusual or outside the normal course of business. |
We also communicated relevant identified laws and regulations and potential fraud risks to all engagement team members and remained alert to any indications of fraud or non-compliance with laws and regulations throughout the audit. |
A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council's website at www.frc.org.uk/auditorsresponsibilities. This description forms part of our Report of the Auditors. |
REPORT OF THE INDEPENDENT AUDITORS TO THE MEMBERS OF |
CORNELIUS ELECTRONICS LIMITED |
Use of our report |
This report is made solely to the company's members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the company's members those matters we are required to state to them in a Report of the Auditors and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company's members as a body, for our audit work, for this report, or for the opinions we have formed. |
for and on behalf of |
Chartered Accountants |
And Statutory Auditors |
Ground Floor Cardigan House |
Castle Court |
Swansea Enterprise Park |
Swansea |
SA7 9LA |
CORNELIUS ELECTRONICS LIMITED (REGISTERED NUMBER: 01729062) |
INCOME STATEMENT |
FOR THE YEAR ENDED 30 JUNE 2023 |
2023 | 2022 |
Notes | £ | £ | £ | £ |
TURNOVER | 3 |
Cost of sales |
GROSS PROFIT |
Distribution costs |
Administrative expenses |
2,768,190 | 2,234,798 |
714,559 | 588,005 |
Other operating income |
OPERATING PROFIT | 5 |
Interest payable and similar expenses | 6 |
PROFIT BEFORE TAXATION |
Tax on profit | 7 |
PROFIT FOR THE FINANCIAL YEAR |
CORNELIUS ELECTRONICS LIMITED (REGISTERED NUMBER: 01729062) |
OTHER COMPREHENSIVE INCOME |
FOR THE YEAR ENDED 30 JUNE 2023 |
2023 | 2022 |
Notes | £ | £ |
PROFIT FOR THE YEAR |
OTHER COMPREHENSIVE INCOME | - | - |
TOTAL COMPREHENSIVE INCOME FOR THE YEAR |
CORNELIUS ELECTRONICS LIMITED (REGISTERED NUMBER: 01729062) |
BALANCE SHEET |
30 JUNE 2023 |
2023 | 2022 |
Notes | £ | £ | £ | £ |
FIXED ASSETS |
Tangible assets | 9 |
CURRENT ASSETS |
Stocks | 10 |
Debtors | 11 |
Cash at bank and in hand |
CREDITORS |
Amounts falling due within one year | 12 |
NET CURRENT ASSETS |
TOTAL ASSETS LESS CURRENT LIABILITIES |
CREDITORS |
Amounts falling due after more than one year |
13 |
( |
) |
( |
) |
PROVISIONS FOR LIABILITIES | 17 | ( |
) | ( |
) |
NET ASSETS |
CAPITAL AND RESERVES |
Called up share capital | 18 |
Retained earnings | 19 |
SHAREHOLDERS' FUNDS |
CORNELIUS ELECTRONICS LIMITED (REGISTERED NUMBER: 01729062) |
BALANCE SHEET - continued |
30 JUNE 2023 |
The financial statements were approved by the Board of Directors and authorised for issue on |
CORNELIUS ELECTRONICS LIMITED (REGISTERED NUMBER: 01729062) |
STATEMENT OF CHANGES IN EQUITY |
FOR THE YEAR ENDED 30 JUNE 2023 |
Called up |
share | Retained | Total |
capital | earnings | equity |
£ | £ | £ |
Balance at 1 July 2021 |
Changes in equity |
Dividends | - | ( |
) | ( |
) |
Total comprehensive income | - |
Balance at 30 June 2022 |
Changes in equity |
Dividends | - | ( |
) | ( |
) |
Total comprehensive income | - |
Balance at 30 June 2023 |
CORNELIUS ELECTRONICS LIMITED (REGISTERED NUMBER: 01729062) |
NOTES TO THE FINANCIAL STATEMENTS |
FOR THE YEAR ENDED 30 JUNE 2023 |
1. | STATUTORY INFORMATION |
Cornelius Electronics Limited is a |
2. | ACCOUNTING POLICIES |
Basis of preparing the financial statements |
Financial Reporting Standard 102 - reduced disclosure exemptions |
The company has taken advantage of the following disclosure exemption in preparing these financial statements, as permitted by FRS 102 "The Financial Reporting Standard applicable in the UK and Republic of Ireland": |
• | the requirements of Section 7 Statement of Cash Flows. |
Exemption has been taken on the grounds that the parent company, Cornelius Holdings Limited, includes the subsidiary in its published consolidated financial statements available at Companies House. |
Critical accounting judgements and key sources of estimation uncertainty |
The preparation of the financial statements requires management to make judgments, estimates and assumptions that affect the application of policies and reported amounts of assets and liabilities, income and expenses. The estimates and associated assumptions are based on historical experience and various other factors that are believed to be reasonable under the circumstances, the results of which form the basis of making the judgments about carrying values of assets and liabilities that are not readily apparent from other sources. Actual results in the future may differ from these estimates. |
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 and in any future periods affected. |
Significant management judgements |
The following are management judgements in applying the accounting policies of the company that have the most significant effect on the amounts recognised in the financial statements. |
Useful life of assets |
Tangible fixed assets, other than investment properties, are depreciated over their useful economic lives based on various factors. The actual lives of the assets are re-assessed on a periodic basis and may vary depending on the standard of the asset. |
Stock Provision |
Management reviews stock on a line by line basis and using knowledge of their products and order book to estimate a stock provision. |
Valuation of debtors |
Management review balances on a customer by customer basis and use knowledge of their customers to determine the recoverability of its debts. |
Provisions and accruals |
Management bases its judgements on the circumstances relating to each specific event and upon currently available information. However, given the inherent difficulties in the estimation of liabilities in these areas, it cannot be guaranteed that additional costs will not be incurred beyond the amounts accrued. |
Turnover |
Turnover, which excludes value added tax, represents the invoiced value of goods and services supplied and is recognised on despatch of goods to customers. |
CORNELIUS ELECTRONICS LIMITED (REGISTERED NUMBER: 01729062) |
NOTES TO THE FINANCIAL STATEMENTS - continued |
FOR THE YEAR ENDED 30 JUNE 2023 |
2. | ACCOUNTING POLICIES - continued |
Tangible fixed assets |
Plant and Machinery | - |
Fixtures and fittings | - |
Motor vehicles | - |
Cost comprises the purchase price of the asset and expenditure directly attributable to the acquisition of the item. |
A fixed asset is derecognised upon disposal or when no future economic benefits are expected to arise from the continued use of the asset. 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 income statement. |
Impairment of fixed assets |
The company performs impairment testing where there are any indicators of impairment. Impairment is calculated as the difference between the carrying value and the recoverable value of the asset. Recoverable value is the higher of net realisable value and estimated value in use at the date the impairment loss is recognised. Value in use represents the present value of expected future discounted cash flows. If incurred, impairment is recognised immediately in the income statement. |
Where an impairment loss subsequently reverses, the carrying value of the asset is increased to the revised estimate of the recoverable amount, but so that the increased carrying value does not exceed the carrying value that would have been determined if no impairment loss had been recognised for the asset in prior years. A reversal of an impairment loss is recognised immediately as a credit to the income statement. |
Stocks |
Stocks and work in progress are stated at the lower of cost and net realisable value. In general, cost is determined on a first in first out basis and includes all direct expenditure and production overheads based on the normal level of activity. Where necessary, provision is made for obsolescent, slow moving and defective stocks. |
CORNELIUS ELECTRONICS LIMITED (REGISTERED NUMBER: 01729062) |
NOTES TO THE FINANCIAL STATEMENTS - continued |
FOR THE YEAR ENDED 30 JUNE 2023 |
2. | ACCOUNTING POLICIES - continued |
Financial instruments |
The company enters into basic financial instrument transactions that result in the recognition of financial assets and liabilities such as trade and other receivables and payables, amounts due to and from related parties. |
Financial instruments are classified and accounted for according to the substance of the contractual arrangement, as financial assets, financial liabilities or equity instruments. An equity instrument is any contract that evidences a residual interest in the assets of the company after deducting all of its liabilities. |
Debt instruments like loans and other receivables and payables are initially measured at present value of the future payments and subsequently at amortised cost using the effective interest method. Debt instruments that are payable or receivable within one year, typically trade payables or receivables, are measured, initially and subsequently, at the undiscounted amount of cash or other consideration expected to be paid or received. However, if the arrangements of a short-term instrument constitute a financing transaction, like the payment of a trade debt deferred beyond normal business terms or financed at a rate of interest that is not a market rate or in case of an outright short-term loan not at market rate, the financial asset or liability is measured, initially and subsequently, at the present value of future payments discounted at a market rate of interest for a similar debt instrument. |
Financial assets that are measured at cost and amortised cost are assessed at the end of each reporting period for objective evidence of impairment. If objective evidence of impairment is found, an impairment loss is recognised in profit or loss. For financial assets measured at amortised cost, the impairment loss is measured as the difference between an asset's carrying value and the present value of estimated cash flows discounted at the assets original effective interest rate. If a financial asset has a variable interest rate, the discount rate for measuring any impairment loss is the current effective interest rate determined under the contract. For financial assets measured at cost less impairment, the impairment loss is measured as the difference between an asset's carrying amount and the best estimate, which is an approximation, of the amount that the group would receive for the asset if it were to be sold at the reporting date. |
Financial assets and liabilities are offset and the net amount recognised in the balance sheet when there is an 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. At each reporting date non-financial assets not carried at fair value, such as property, plant and equipment are reviewed to determine whether there is an indication that an asset may be impaired. If there is an indication of possible impairment, the recoverable amount of any asset or group of related assets, which is the higher of value in use and the fair value less costs to sell, is estimated and compared with its carrying amount. If the recoverable amount is lower, the carrying amount of the asset is reduced to its recoverable amount and an impairment loss is recognised immediately in profit or loss. |
If an impairment loss is subsequently reversed, the carrying amount of the asset or group of related assets is increased to the revised estimate of its recoverable amount, but not to exceed the amount that would have been determined had no impairment loss been recognised for the asset or group of related assets in prior periods. A reversal of an impairment loss is recognised immediately in profit or loss. |
Taxation |
Taxation for the year comprises current and deferred tax. Tax is recognised in the Income Statement, except to the extent that it relates to items recognised in other comprehensive income or directly in equity. |
Current or deferred taxation assets and liabilities are not discounted. |
Current tax is recognised at the amount of tax payable using the tax rates and laws that have been enacted or substantively enacted by the balance sheet date. |
Deferred tax |
Deferred tax is recognised in respect of all timing differences that have originated but not reversed at the balance sheet date. |
Timing differences arise from the inclusion of income and expenses in tax assessments in periods different from those in which they are recognised in financial statements. Deferred tax is measured using tax rates and laws that have been enacted or substantively enacted by the year end and that are expected to apply to the reversal of the timing difference. |
Unrelieved tax losses and other deferred tax assets are recognised only to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits. |
Research and development |
Expenditure on research and development is written off in the year in which it is incurred. |
CORNELIUS ELECTRONICS LIMITED (REGISTERED NUMBER: 01729062) |
NOTES TO THE FINANCIAL STATEMENTS - continued |
FOR THE YEAR ENDED 30 JUNE 2023 |
2. | ACCOUNTING POLICIES - continued |
Foreign currencies |
Assets and liabilities in foreign currencies are translated into sterling at the rates of exchange ruling at the balance sheet date. Transactions in foreign currencies are translated into sterling at the rate of exchange ruling at the date of transaction. Exchange differences are taken into account in arriving at the operating result. |
Hire purchase and leasing commitments |
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 and other post-retirement benefits |
The company operates a defined contribution pension scheme. Contributions payable to the company's pension scheme are charged to profit or loss in the period to which they relate. |
Cash at bank and in hand |
Cash at bank and cash in hand includes cash and short term highly liquid investments with a short maturity of three months or less from the date of acquisition or opening of the deposit or similar account. |
Debtors |
Short term debtors are measured at transaction price, less any impairment. |
Creditors |
Short term creditors are measured at transaction price. |
Provision for liabilities |
Provisions are recognised when the company has a present obligation (legal and constructive) from a past event that will probably result in a transfer of funds to a third party and the amount due to settle the obligation can be measured or estimated reliably. |
Employee benefits |
The company provides a range of benefits to employees, including annual bonus arrangements, paid holiday arrangements and defined contribution pension plans. |
Short term benefits, including holiday pay and similar non-monetary benefits are recognised as an expense in the period in which the service is received. |
Functional and Presentation Currency |
These financial statements are presented in pounds sterling because that is the currency of the primary economic environment in which the Company operates (its functional currency). |
3. | TURNOVER |
The turnover and profit before taxation are attributable to the one principal activity of the company. |
An analysis of turnover by geographical market is given below: |
2023 | 2022 |
£ | £ |
United Kingdom |
Europe |
Rest of the world | 134,237 | 57,535 |
CORNELIUS ELECTRONICS LIMITED (REGISTERED NUMBER: 01729062) |
NOTES TO THE FINANCIAL STATEMENTS - continued |
FOR THE YEAR ENDED 30 JUNE 2023 |
4. | EMPLOYEES AND DIRECTORS |
2023 | 2022 |
£ | £ |
Wages and salaries |
Social security costs |
Other pension costs |
The average number of employees during the year was as follows: |
2023 | 2022 |
Production | 205 | 212 |
Sales, distribution and administration | 16 | 14 |
Included in wages is £18,626 (2022: £65,756) relating to agency wages. |
Included in creditors is £2,824 (2022: £3,748) relating to pension contributions. |
2023 | 2022 |
£ | £ |
Directors' remuneration |
Directors' pension contributions to money purchase schemes |
The number of directors to whom retirement benefits were accruing was as follows: |
Money purchase schemes |
5. | OPERATING PROFIT |
The operating profit is stated after charging/(crediting): |
2023 | 2022 |
£ | £ |
Hire of plant and machinery |
Other operating leases |
Depreciation - owned assets |
Depreciation - assets on hire purchase contracts |
Profit on disposal of fixed assets | ( |
) |
Auditors' remuneration |
Taxation compliance services |
Taxation advisory services |
Exchange differences | ( |
) | ( |
) |
Deferred capital grants | ( |
) | ( |
) |
6. | INTEREST PAYABLE AND SIMILAR EXPENSES |
2023 | 2022 |
£ | £ |
Hire purchase |
CORNELIUS ELECTRONICS LIMITED (REGISTERED NUMBER: 01729062) |
NOTES TO THE FINANCIAL STATEMENTS - continued |
FOR THE YEAR ENDED 30 JUNE 2023 |
7. | TAXATION |
Analysis of the tax charge |
The tax charge on the profit for the year was as follows: |
2023 | 2022 |
£ | £ |
Current tax: |
UK corporation tax |
Adjustment in respect of prior years | 83,104 | - |
Interest on tax | 1,819 | - |
Total current tax |
Deferred tax | ( |
) |
Tax on profit |
Reconciliation of total tax charge included in profit and loss |
The tax assessed for the year is higher than the standard rate of corporation tax in the UK. The difference is explained below: |
2023 | 2022 |
£ | £ |
Profit before tax |
Profit multiplied by the standard rate of corporation tax in the UK of |
Effects of: |
Expenses not deductible for tax purposes |
Capital allowances in excess of depreciation | ( |
) | ( |
) |
Utilisation of tax losses | ( |
) |
Adjustments to tax charge in respect of previous periods |
Effective change on deferred tax | 1,876 | (555 | ) |
R&D tax credit | - | (76,000 | ) |
Total tax charge | 236,219 | 29,513 |
Factors that may affect future current and total tax charges |
The deferred tax assets/liabilities at 30 June 2023 have been calculated at the rate of 25% (2022: 25%). |
8. | DIVIDENDS |
2023 | 2022 |
£ | £ |
Ordinary shares of £1 each |
Interim | 365,000 | 590,000 |
CORNELIUS ELECTRONICS LIMITED (REGISTERED NUMBER: 01729062) |
NOTES TO THE FINANCIAL STATEMENTS - continued |
FOR THE YEAR ENDED 30 JUNE 2023 |
9. | TANGIBLE FIXED ASSETS |
Fixtures |
Plant and | and | Motor |
Machinery | fittings | vehicles | Totals |
£ | £ | £ | £ |
COST |
At 1 July 2022 |
Additions |
Disposals | ( |
) | ( |
) |
At 30 June 2023 |
DEPRECIATION |
At 1 July 2022 |
Charge for year |
Eliminated on disposal | ( |
) | ( |
) |
At 30 June 2023 |
NET BOOK VALUE |
At 30 June 2023 |
At 30 June 2022 |
Fixed assets, included in the above, which are held under hire purchase contracts are as follows: |
Plant and | Motor |
Machinery | vehicles | Totals |
£ | £ | £ |
COST |
At 1 July 2022 |
Additions |
Disposals | ( |
) | ( |
) |
At 30 June 2023 |
DEPRECIATION |
At 1 July 2022 |
Charge for year |
Eliminated on disposal | ( |
) | ( |
) |
At 30 June 2023 |
NET BOOK VALUE |
At 30 June 2023 |
At 30 June 2022 |
10. | STOCKS |
2023 | 2022 |
£ | £ |
Stocks |
11. | DEBTORS: AMOUNTS FALLING DUE WITHIN ONE YEAR |
2023 | 2022 |
£ | £ |
Trade debtors |
Amounts owed by group undertakings |
Other debtors |
Prepayments and accrued income |
CORNELIUS ELECTRONICS LIMITED (REGISTERED NUMBER: 01729062) |
NOTES TO THE FINANCIAL STATEMENTS - continued |
FOR THE YEAR ENDED 30 JUNE 2023 |
11. | DEBTORS: AMOUNTS FALLING DUE WITHIN ONE YEAR - continued |
The company has entered into a Sales Financing Agreement with Lloyds TSB Commercial Finance Ltd with recourse, for its trade debtors. In line with FRS 102, section 2, Concepts and Pervasive Principles, the company has reflected this by disclosing both the gross trade debtors and the corresponding liability to the finance company. |
12. | CREDITORS: AMOUNTS FALLING DUE WITHIN ONE YEAR |
2023 | 2022 |
£ | £ |
Bank loans and overdrafts (see note 14) |
Hire purchase contracts (see note 15) |
Trade creditors |
Amounts owed to group undertakings |
Tax |
Social security and other taxes |
VAT | 387,532 | 325,107 |
Other creditors |
Accruals and deferred income |
13. | CREDITORS: AMOUNTS FALLING DUE AFTER MORE THAN ONE YEAR |
2023 | 2022 |
£ | £ |
Bank loans (see note 14) |
Hire purchase contracts (see note 15) |
Accruals and deferred income |
Accruals and deferred income due in over one year consists entirely of Government grants. |
14. | LOANS |
An analysis of the maturity of loans is given below: |
2023 | 2022 |
£ | £ |
Amounts falling due within one year or on demand: |
Bank loans |
Amounts falling due between one and two years: |
Bank loans - 1-2 years |
Amounts falling due between two and five years: |
Bank loans - 2-5 years |
The company received £248,000 through the Coronavirus Business Interruption Scheme. The loan is repayable by 48 equal monthly installments commencing in July 2021. The interest rate on the loan is 1.83% plus base rate. |
CORNELIUS ELECTRONICS LIMITED (REGISTERED NUMBER: 01729062) |
NOTES TO THE FINANCIAL STATEMENTS - continued |
FOR THE YEAR ENDED 30 JUNE 2023 |
15. | LEASING AGREEMENTS |
Minimum lease payments fall due as follows: |
Hire purchase contracts |
2023 | 2022 |
£ | £ |
Net obligations repayable: |
Within one year |
Between one and five years |
Non-cancellable operating | leases |
2023 | 2022 |
£ | £ |
Within one year |
16. | SECURED DEBTS |
The following secured debts are included within creditors: |
2023 | 2022 |
£ | £ |
Bank loans |
Hire purchase contracts | 176,120 | 204,129 |
Bank Loans & Overdrafts |
A fixed and floating charge over all the company's assets dated 26/06/2020. |
A fixed charge over the Land on north side of Handel Avenue and floating charge over all moveable plant and machinery, furniture and equipment dated 19/01/1990. |
A fixed charge over various chattels dated 01/05/2001. |
A fixed charge containing a negative pledge dated 07/03/2022. |
Sales Ledger Financing |
An all assets debenture dated 26/05/2005 incorporating a fixed and floating charge. |
Hire Purchase |
Balances are secured on the assets to which they relate. |
17. | PROVISIONS FOR LIABILITIES |
2023 | 2022 |
£ | £ |
Deferred tax | 258,022 | 247,602 |
Deferred |
tax |
£ |
Balance at 1 July 2022 |
Charge to Income Statement during year |
Balance at 30 June 2023 |
CORNELIUS ELECTRONICS LIMITED (REGISTERED NUMBER: 01729062) |
NOTES TO THE FINANCIAL STATEMENTS - continued |
FOR THE YEAR ENDED 30 JUNE 2023 |
17. | PROVISIONS FOR LIABILITIES - continued |
Deferred tax assets and liabilities are offset where the company has a legally enforceable right to do so. The following analysis is the analysis of the deferred tax balances for financial reporting purposes: |
2023 | 2022 |
Net Liabilities | Net Liabilities |
Balances: | £ | £ |
ACAs | 258,728 | 248,539 |
Other | (706 | ) | (937 | ) |
258,022 | 247,602 |
18. | CALLED UP SHARE CAPITAL |
Allotted, issued and fully paid: |
Number: | Class: | Nominal | 2023 | 2022 |
value: | £ | £ |
Ordinary | 1 | 10,000 | 10,000 |
Each share is entitled to: |
- One vote in any circumstances; |
- Pari Passu to dividend or any other distribution; and |
- full participation in capital distributions. |
19. | RESERVES |
Retained |
earnings |
£ |
At 1 July 2022 |
Profit for the year |
Dividends | ( |
) |
At 30 June 2023 |
Called up share capital - represents the nominal value of shares that have been issued. |
Retained Earnings - includes all current and prior period retained profits and losses. |
20. | ULTIMATE PARENT COMPANY |
The immediate and ultimate parent company is Cornelius Holdings Limited by virtue of its ownership of 100% of the issued share capital. |
21. | CAPITAL COMMITMENTS |
2023 | 2022 |
£ | £ |
Contracted but not provided for in the |
financial statements |
22. | RELATED PARTY DISCLOSURES |
2023 | 2022 |
£ | £ |
Management charge | (400,000 | ) | (400,000 | ) |
Rent | (60,000 | ) | (60,000 | ) |
CORNELIUS ELECTRONICS LIMITED (REGISTERED NUMBER: 01729062) |
NOTES TO THE FINANCIAL STATEMENTS - continued |
FOR THE YEAR ENDED 30 JUNE 2023 |
22. | RELATED PARTY DISCLOSURES - continued |
2023 | 2022 |
£ | £ |
Sales |
Purchases | ( |
) | ( |
) |
Management charges | (48,000 | ) | (24,000 | ) |
23. | POST BALANCE SHEET EVENTS |
There were no events after the reporting period that are material for disclosure in the financial statements. |
24. | ULTIMATE CONTROLLING PARTY |
The director, Mr D A Cornelius, was the ultimate controlling party by virtue of his ownership of the majority of the issued share capital of Cornelius (Holdings) Limited at 30 June 2023. Since the year end a change in ultimate controlling party has occurred and is the now the director, Mr J D Cornelius. |