Company registration number 01940659 (England and Wales)
MARREN MICROWAVE LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 OCTOBER 2023
MARREN MICROWAVE LIMITED
COMPANY INFORMATION
Directors
I S Marren
A E Marren
M Skinner
P Jobanputra
K D Needs
Secretary
I S Marren
Company number
01940659
Registered office
40 Mallard Close
Earls Barton
Northampton
NN6 0JF
Auditor
Moore
Oakley House
Headway Business Park
3 Saxon Way West
Corby
Northamptonshire
NN18 9EZ
MARREN MICROWAVE LIMITED
CONTENTS
Page
Strategic report
1 - 3
Directors' report
4
Directors' responsibilities statement
5
Independent auditor's report
6 - 8
Statement of income and retained earnings
9
Balance sheet
10
Statement of cash flows
12
Notes to the financial statements
13 - 25
MARREN MICROWAVE LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 31 OCTOBER 2023
- 1 -
The directors present the strategic report for the year ended 31 October 2023.
Review of the business
Turnover for the year ended 31 October 2023 was £9,568,327 an increase of 12% on last year (2022 £8,494,372). Operating profit was £423,822 (October 2022 £328,920). Net profit before tax for the year was £309,627, again an increase of 12% (2022 was £ 275,342)
Company Summary – Goals and achievements.
Marren is a leading foodservice equipment specialist committed to delivering exceptional repair solutions while positively impacting stakeholders, employees, and customer businesses. Our goals are:
Service Excellence: We aim to provide reliable and efficient catering equipment repair services that ensure maximum uptime for our customers businesses. Customer satisfaction is our top priority, and we continuously strive to exceed their expectations through exceptional service delivery.
Innovation: We are dedicated to innovation, constantly seeking new and better ways to deliver our services. By staying ahead of the curve and embracing technological advancements, we aim to offer cutting-edge solutions that meet the evolving needs of our customers.
Professionalism and Integrity: We hold professionalism and integrity as paramount values in everything we do. Treating all stakeholders with respect and honesty, we adhere strictly to ethical and legal standards, maintaining a positive reputation in the industry.
Accountability: Marren places great importance on accountability, taking responsibility for our actions and outcomes. We continuously review our performance metrics, identify areas for improvement, and take corrective action to ensure ongoing service excellence.
Leadership in the Industry: Our vision is to lead the foodservice equipment sector, recognised for our specialist technical expertise, reliability, and innovative services. We aim to expand our service offerings to meet the growing needs of our customers, providing comprehensive solutions for all their equipment repair and maintenance needs.
Promoting Our Own Brand: Marren is proud to supply our own brand of microwaves, aimed at revolutionising the industry. Our goal is to establish this brand as a notable presence within the foodservice sector. With its low cost of ownership and repairability, we believe it has the potential to quickly become the go-to microwave in the industry, offering unparalleled value to our customers. Through strategic marketing and exceptional product quality, we aim to
achieve widespread recognition for our brand in a very short span of time. By aligning our goals with our values and vision, we are dedicated to achieving sustainable growth and becoming the most trusted and reliable service provider in the foodservice industry.
MARREN MICROWAVE LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 OCTOBER 2023
- 2 -
Principal risks and uncertainties
Changes in Import and Export Regulations
Impact: Regulatory alterations in import/export processes can disrupt the supply chain, affecting the availability of essential equipment and spare parts. This can lead to delays in service delivery and increased costs.
Mitigation Strategy: We remain vigilant by staying abreast of global news and regulatory updates. Leveraging resources such as the Institute of Export and International Trade and McKinsey Insights allows us to anticipate and adapt to regulatory shifts effectively. Furthermore, maintaining strong relationships with suppliers and exploring alternative sourcing options helps mitigate the impact of regulatory changes and delays.
Supply Chain Disruptions
Impact: Unforeseen events like the COVID-19 pandemic can disrupt production, transportation, and sourcing, thereby impeding service delivery. Factory shutdowns, reduced capacity, and delays in production can significantly impact our operations.
Mitigation Strategy: To enhance resilience, we employ robust inventory management practices, diversify our supplier base, and invest in digital technologies for real-time visibility into our supply chain operations. Additionally, establishing contingency plans and prioritising key partnerships with reliable suppliers help mitigate the risks associated with supply chain disruptions.
Fluctuations in the Economy
Impact: Economic fluctuations, such as recessions or inflationary pressures, can significantly influence customer spending patterns and overall business activity. This can directly impact demand for our services and affect our revenue streams.
Mitigation Strategy: Through meticulous monitoring of economic indicators such as GDP, CPI, and PPI, we gain insights into prevailing market conditions. This allows us to adapt our pricing strategies and service offerings accordingly to remain competitive. Moreover, fostering strong customer relationships and offering flexible payment options can help mitigate the impact of economic downturns on our business.
Currency Exchange Rates
Impact: Fluctuations in currency exchange rates can directly affect the cost of imported parts and equipment, thereby impacting our profitability. Exchange rate volatility can lead to increased costs and uncertainty in pricing.
Mitigation Strategy: Regular monitoring of exchange rates through currency converters and financial news platforms enables us to anticipate and manage currency risks effectively. Additionally, utilising hedging strategies and entering into forward contracts help mitigate the impact of adverse currency movements on our bottom line.
Inflation and Interest Rates
Impact: Changes in inflation and interest rates can have cascading effects on operating costs, borrowing capabilities, and overall business viability. High inflation rates can erode profit margins, while rising interest rates can increase borrowing costs.
Mitigation Strategy: By conducting thorough financial analyses and scenario planning, we proactively manage inflationary pressures and interest rate risks. Diversifying revenue streams and implementing cash flow forecasting further bolster our financial resilience. Additionally, negotiating favourable loan terms and exploring alternative financing options help mitigate the impact of interest rate fluctuations on our business.
Customer Behaviour and Sustainability
Impact: Evolving customer preferences towards sustainability and changing spending habits necessitate continual adaptation of our service offerings. Failure to meet customer expectations in terms of sustainability can lead to loss of business and market share.
Mitigation Strategy: Our commitment to sustainability is evidenced by the introduction of environmentally friendly options, such as our proprietary line of microwaves. Through staff training initiatives and the development of robust sustainability frameworks, we position ourselves as industry leaders in addressing emerging customer demands. Moreover, conducting regular market research and gathering customer feedback enable us to stay attuned to changing preferences and adapt our offerings accordingly.
MARREN MICROWAVE LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 OCTOBER 2023
- 3 -
Recruitment Challenges
Imapct: Difficulty in recuriting skilled staff can hinder our ability to scale operations and meet growing customer demands. A shortage of qualified technicians may lead to delays in service delivery and compromise customer satisfaction.
Mitigation Strategy: We are activiely committed to dribing recruitment efforts to attract and retain top talent within the organisation. This includes implementing targeted recruitment strategies, offering competetive compensations packages, and investing in training and development programs.
Key performance indicators
The director has monitored the progress of overall company strategy and the individual strategic
elements by reference to certain key performance indicators:
- Turnover for the year amounted to £9,568,327 (2022 £8,494,372)
- Operating profit for the year was £ 423,822 (2022 £328,920)
- EBITDA for the year was a profit of £961,362 (2022 £489,119)
Other information and explanations
Positives Within the Organisation
Equipment Diversification: Expanding our product portfolio to include renowned brands like Rational, Spidocook, and Unox not only mitigates risks associated with single-source dependency but also injects excitement and dynamism into our operations. By offering a diverse range of equipment brands, we cater to a broader customer base and enhance our competitive edge in the market.
Success with ISM-1800 Microwave: Our strategic approach into microwave manufacturing has yielded remarkable results, with our ISM-1800 model garnering widespread acclaim and adoption by major industry players. Additionally, our ongoing collaboration with the manufacturer on product enhancements underscores our commitment to innovation and customer-centric solutions. Furthermore, our proactive approach to product development and market expansion positions us for sustained growth and market leadership in the microwave segment.
Industry Recognition: Winning prestigious awards within the industry serves as a testament to our unwavering dedication to service excellence and innovation. Such accolades not only bolster our reputation but also affirm our position as a trusted partner within the foodservice sector. By consistently delivering exceptional service and exceeding customer expectations, we solidify our standing as an industry leader and set new benchmarks for excellence.
Marren navigates the complexities of the foodservice industry with resilience, foresight, and strategic agility. By meticulously identifying and mitigating risks, while capitalising on emerging opportunities, we remain steadfast in our pursuit of sustainable growth and unwavering commitment to customer satisfaction. Through continued innovation, diversification, and a steadfast commitment to our core values, we are poised to maintain our leadership position in the industry for years to come.
I S Marren
Director
22 April 2024
MARREN MICROWAVE LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 OCTOBER 2023
- 4 -
The directors present their annual report and financial statements for the year ended 31 October 2023.
Principal activities
The principal activity of the company is the supply and maintenance of commercial microwave ovens.
There has not been any significant change in this activity during the year.
Results and dividends
The results for the year are set out on page 9.
No ordinary dividends were paid. The directors do not recommend payment of a final dividend.
Directors
The directors who held office during the year and up to the date of signature of the financial statements were as follows:
I S Marren
A E Marren
M Skinner
P Jobanputra
K D Needs
Auditor
The auditor, Moore, is deemed to be reappointed under section 487(2) of the Companies Act 2006.
Statement of disclosure to auditor
So far as each person who was a director at the date of approving this report is aware, there is no relevant audit information of which the company’s auditor is unaware. Additionally, the directors individually have taken all the necessary steps that they ought to have taken as directors in order to make themselves aware of all relevant audit information and to establish that the company’s auditor is aware of that information.
Medium-sized companies exemption
This report has been prepared in accordance with the provisions applicable to companies entitled to the medium-sized companies exemption.
On behalf of the board
I S Marren
Director
22 April 2024
MARREN MICROWAVE LIMITED
DIRECTORS' RESPONSIBILITIES STATEMENT
FOR THE YEAR ENDED 31 OCTOBER 2023
- 5 -
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.
MARREN MICROWAVE LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF MARREN MICROWAVE LIMITED
- 6 -
Opinion
We have audited the financial statements of Marren Microwave Limited (the 'company') for the year ended 31 October 2023 which comprise the statement of income and retained earnings, the balance sheet, the statement of cash flows and notes to the financial statements, including significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice).
In our opinion the financial statements:
give a true and fair view of the state of the company's affairs as at 31 October 2023 and of its profit for the year then ended;
have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and
have been prepared in accordance with the requirements of the Companies Act 2006.
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditor's responsibilities for the audit of the financial statements section of our report. We are independent of the company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC’s Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Conclusions relating to going concern
In auditing the financial statements, we have concluded that the directors' use of the going concern basis of accounting in the preparation of the financial statements is appropriate.
Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the company's ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.
Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.
The other information comprises the information included in the annual report other than the financial statements and our auditor's report thereon. The directors are responsible for the other information contained within the annual report. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the course of the audit, or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.
We have nothing to report in this regard.
Opinions on other matters prescribed by the Companies Act 2006
In our opinion, based on the work undertaken in the course of our audit:
the information given in the strategic report and the directors' report for the financial year for which the financial statements are prepared is consistent with the financial statements; and
the strategic report and the directors' report have been prepared in accordance with applicable legal requirements.
MARREN MICROWAVE LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF MARREN MICROWAVE LIMITED
- 7 -
Matters on which we are required to report by exception
In the light of the knowledge and understanding of the company and its environment obtained in the course of the audit, we have not identified material misstatements in the strategic report or the directors' report.
We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to report to you if, in our opinion:
adequate accounting records have not been kept, or returns adequate for our audit have not been received from branches not visited by us; or
the financial statements are not in agreement with the accounting records and returns; or
certain disclosures of remuneration specified by law are not made; or
we have not received all the information and explanations we require for our audit.
Responsibilities of directors
As explained more fully in the directors' responsibilities statement, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. In preparing the financial statements, the directors are responsible for assessing the company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the company or to cease operations, or have no realistic alternative but to do so.
Auditor's responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.
The extent to which our procedures are capable of detecting irregularities, including fraud, is detailed below.
The objectives of our audit in respect of fraud, are; to identify and assess the risks of material misstatement of the financial statements due to fraud; to obtain sufficient appropriate audit evidence regarding the assessed risks of material misstatement due to fraud, through designing and implementing appropriate responses to those assessed risks; and to respond appropriately to instances of fraud or suspected fraud identified during the audit. However, the primary responsibility for the prevention and detection of fraud rests with both management and those charged with governance of the company.
Our approach was as follows:
We obtained an understanding of the legal and regulatory requirements applicable to the company and considered that the most significant are the Companies Act 2006, UK financial reporting standards as issued by the Financial Reporting Council, and UK taxation legislation.
We assessed the risk of material misstatement of the financial statements, including the risk of material misstatement due to fraud and how it might occur, by holding discussions with management and those charged with governance.
MARREN MICROWAVE LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF MARREN MICROWAVE LIMITED
- 8 -
A further description of our responsibilities is available on the Financial Reporting Council’s website at: https://www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor's report.
This report is made solely to the company's members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the company's members those matters we are required to state to them in an auditor's report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company's members as a body, for our audit work, for this report, or for the opinions we have formed.
Amanda Etty
Senior Statutory Auditor
For and on behalf of Moore
23 April 2024
Chartered Accountants
Statutory Auditor
Oakley House
Headway Business Park
3 Saxon Way West
Corby
Northamptonshire
NN18 9EZ
MARREN MICROWAVE LIMITED
STATEMENT OF INCOME AND RETAINED EARNINGS
FOR THE YEAR ENDED 31 OCTOBER 2023
- 9 -
2023
2022
Notes
£
£
Turnover
2
9,568,327
8,494,372
Cost of sales
(4,011,377)
(3,541,574)
Gross profit
5,556,950
4,952,798
Distribution costs
(273,993)
(254,582)
Administrative expenses
(4,859,135)
(4,369,296)
Operating profit
3
423,822
328,920
Interest receivable and similar income
6
1,909
202
Interest payable and similar expenses
7
(116,104)
(53,780)
Profit before taxation
309,627
275,342
Tax on profit
8
(84,660)
(81,265)
Profit for the financial year
224,967
194,077
Retained earnings brought forward
1,959,749
1,765,672
Retained earnings carried forward
2,184,716
1,959,749
The profit and loss account has been prepared on the basis that all operations are continuing operations.
MARREN MICROWAVE LIMITED
BALANCE SHEET
AS AT 31 OCTOBER 2023
31 October 2023
- 10 -
2023
2022
Notes
£
£
£
£
Fixed assets
Tangible assets
9
2,435,288
1,705,350
Current assets
Stocks
10
1,586,160
1,691,889
Debtors
11
1,586,685
1,454,067
Cash at bank and in hand
545,935
549,997
3,718,780
3,695,953
Creditors: amounts falling due within one year
12
(2,179,068)
(1,798,371)
Net current assets
1,539,712
1,897,582
Total assets less current liabilities
3,975,000
3,602,932
Creditors: amounts falling due after more than one year
13
(1,550,471)
(1,488,030)
Provisions for liabilities
Deferred tax liability
16
229,813
145,153
(229,813)
(145,153)
Net assets
2,194,716
1,969,749
Capital and reserves
Called up share capital
18
10,000
10,000
Profit and loss reserves
2,184,716
1,959,749
Total equity
2,194,716
1,969,749
These financial statements have been prepared in accordance with the provisions relating to medium-sized companies.
The financial statements were approved by the board of directors and authorised for issue on 22 April 2024 and are signed on its behalf by:
I S Marren
Director
Company registration number 01940659 (England and Wales)
MARREN MICROWAVE LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 OCTOBER 2023
- 11 -
Share capital
Profit and loss reserves
Total
£
£
£
Balance at 1 November 2021
10,000
1,765,672
1,775,672
Year ended 31 October 2022:
Profit and total comprehensive income
-
194,077
194,077
Balance at 31 October 2022
10,000
1,959,749
1,969,749
Year ended 31 October 2023:
Profit and total comprehensive income
-
224,967
224,967
Balance at 31 October 2023
10,000
2,184,716
2,194,716
MARREN MICROWAVE LIMITED
STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 OCTOBER 2023
- 12 -
2023
2022
Notes
£
£
£
£
Cash flows from operating activities
Cash generated from operations
21
1,041,312
362,670
Interest paid
(116,104)
(53,780)
Income taxes (paid)/refunded
(14,003)
21,611
Net cash inflow from operating activities
911,205
330,501
Investing activities
Purchase of tangible fixed assets
(620,468)
(93,619)
Proceeds from disposal of tangible fixed assets
78,765
6,000
Interest received
1,909
202
Net cash used in investing activities
(539,794)
(87,417)
Financing activities
Movement of borrowings
(263,482)
739,139
Repayment of bank loans
(33,617)
(778,183)
Payment of finance leases obligations
(78,374)
(50,514)
Net cash used in financing activities
(375,473)
(89,558)
Net (decrease)/increase in cash and cash equivalents
(4,062)
153,526
Cash and cash equivalents at beginning of year
549,997
396,471
Cash and cash equivalents at end of year
545,935
549,997
MARREN MICROWAVE LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 OCTOBER 2023
- 13 -
1
Accounting policies
Company information
Marren Microwave Limited is a private company limited by shares incorporated in England and Wales. The registered office is 40 Mallard Close, Earls Barton, Northampton, NN6 0JF.
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. The principal accounting policies adopted are set out below.
The company has taken advantage of the exemption under section 399 of the Companies Act 2006 not to prepare consolidated accounts, on the basis that the group of which this is the parent qualifies as a small group. The financial statements present information about the company as an individual entity and not about its group.
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 dispatch of the goods), the amount of revenue can be measured reliably, it is probable that the economic benefits associated with the transaction will flow to the entity and the costs incurred or to be incurred in respect of the transaction can be measured reliably.
1.4
Tangible fixed assets
Tangible fixed assets are initially measured at cost and subsequently measured at cost or valuation, net of depreciation and any impairment losses.
Depreciation is recognised so as to write off the cost or valuation of assets less their residual values over their useful lives on the following bases:
Freehold property
2% per annum on cost
Integral features
10% per annum reducing balance
Fixtures and fittings
10% - 25% per annum straight line
Motor vehicles
25% - 40% per annum reducing balance
The gain or loss arising on the disposal of an asset is determined as the difference between the sale proceeds and the carrying value of the asset, and is credited or charged to profit or loss.
MARREN MICROWAVE LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 OCTOBER 2023
1
Accounting policies
(Continued)
- 14 -
1.5
Impairment of fixed assets
At each reporting period end date, the company reviews the carrying amounts of its tangible 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 profit or loss, unless the relevant asset is carried at a revalued amount, in which case the impairment loss is treated as a revaluation decrease.
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 profit or loss, unless the relevant asset is carried at a revalued amount, in which case the reversal of the impairment loss is treated as a revaluation increase.
1.6
Stocks
Stocks are stated at the lower of cost (on a first in, first out basis) and estimated selling price less costs to complete and sell. Cost comprises direct materials.
Stocks held for distribution at no or nominal consideration are measured at the lower of replacement cost and 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.
1.7
Cash and cash equivalents
Cash at bank and in hand are basic financial assets and include cash in hand, deposits held at call with banks and other short-term liquid investments with original maturities of three months or less.
1.8
Financial instruments
The company has elected to apply the provisions of Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instruments Issues’ of FRS 102 to all of its financial instruments.
Financial instruments are recognised in the company's balance sheet when the company becomes party to the contractual provisions of the instrument.
Financial assets and liabilities are offset, with the net amounts presented in the financial statements, when there is a legally enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously.
MARREN MICROWAVE LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 OCTOBER 2023
1
Accounting policies
(Continued)
- 15 -
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.
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, loans from 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.
MARREN MICROWAVE LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 OCTOBER 2023
1
Accounting policies
(Continued)
- 16 -
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.
Derecognition of financial liabilities
Financial liabilities are derecognised when the company’s contractual obligations expire or are discharged or cancelled.
1.9
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.
1.10
Derivatives
Derivatives are initially recognised at fair value at the date a derivative contract is entered into and are subsequently remeasured to fair value at each reporting end date. The resulting gain or loss is recognised in profit or loss immediately unless the derivative is designated and effective as a hedging instrument, in which event the timing of the recognition in profit or loss depends on the nature of the hedge relationship.
A derivative with a positive fair value is recognised as a financial asset, whereas a derivative with a negative fair value is recognised as a financial liability.
1.11
Taxation
The tax expense represents the sum of the tax currently payable and deferred tax.
Current tax
The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the profit and loss account because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The company’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.
MARREN MICROWAVE LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 OCTOBER 2023
1
Accounting policies
(Continued)
- 17 -
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.
The carrying amount of deferred tax assets is reviewed at each reporting end date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realised. Deferred tax is charged or credited in the profit and loss account, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity. Deferred tax assets and liabilities are offset when the company has a legally enforceable right to offset current tax assets and liabilities and the deferred tax assets and liabilities relate to taxes levied by the same tax authority.
1.12
Employee benefits
The costs of short-term employee benefits are recognised as a liability and an expense.
The cost of any unused holiday entitlement is recognised in the period in which the employee’s services are received.
Termination benefits are recognised immediately as an expense when the company is demonstrably committed to terminate the employment of an employee or to provide termination benefits.
1.13
Retirement benefits
Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.
1.14
Leases
Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessees. All other leases are classified as operating leases.
Assets held under finance leases are recognised as assets at the lower of the assets fair value at the date of inception and the present value of the minimum lease payments. The related liability is included in the balance sheet as a finance lease obligation. Lease payments are treated as consisting of capital and interest elements. The interest is charged to profit or loss so as to produce a constant periodic rate of interest on the remaining balance of the liability.
Rentals payable under operating leases, including any lease incentives received, are charged to profit or loss on a straight line basis over the term of the relevant lease except where another more systematic basis is more representative of the time pattern in which economic benefits from the leases asset are consumed.
1.15
Foreign exchange
Transactions in currencies other than pounds sterling are recorded at the rates of exchange prevailing at the dates of the transactions. At each reporting end date, monetary assets and liabilities that are denominated in foreign currencies are retranslated at the rates prevailing on the reporting end date. Gains and losses arising on translation in the period are included in profit or loss.
2
Turnover and other revenue
2023
2022
£
£
Turnover analysed by class of business
UK Sales
9,568,327
8,494,372
MARREN MICROWAVE LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 OCTOBER 2023
2
Turnover and other revenue
(Continued)
- 18 -
2023
2022
£
£
Other revenue
Interest income
1,909
202
3
Operating profit
2023
2022
Operating profit for the year is stated after charging/(crediting):
£
£
Exchange (gains)/losses
(13,379)
19,584
Fees payable to the company's auditor for the audit of the company's financial statements
9,695
9,500
Depreciation of owned tangible fixed assets
419,527
159,997
(Profit)/loss on disposal of tangible fixed assets
(28,637)
696
Operating lease charges
16,562
12,775
4
Employees
The average monthly number of persons (including directors) employed by the company during the year was:
2023
2022
Number
Number
Directors
5
6
Direct
40
39
Admin, sales and other
28
26
Total
73
71
Their aggregate remuneration comprised:
2023
2022
£
£
Wages and salaries
3,015,680
2,874,843
Social security costs
331,594
334,115
Pension costs
100,738
61,545
3,448,012
3,270,503
MARREN MICROWAVE LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 OCTOBER 2023
- 19 -
5
Directors' remuneration
2023
2022
£
£
Remuneration for qualifying services
831,323
717,417
Company pension contributions to defined contribution schemes
52,929
7,725
884,252
725,142
Remuneration disclosed above include the following amounts paid to the highest paid director:
2023
2022
£
£
Remuneration for qualifying services
217,188
172,667
6
Interest receivable and similar income
2023
2022
£
£
Interest income
Interest on bank deposits
1,909
Other interest income
202
Total income
1,909
202
2023
2022
Investment income includes the following:
£
£
Interest on financial assets not measured at fair value through profit or loss
1,909
7
Interest payable and similar expenses
2023
2022
£
£
Interest on financial liabilities measured at amortised cost:
Interest on bank overdrafts and loans
38,591
52,764
Interest on invoice finance arrangements
34,000
72,591
52,764
Other finance costs:
Interest on finance leases and hire purchase contracts
43,513
1,016
116,104
53,780
MARREN MICROWAVE LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 OCTOBER 2023
- 20 -
8
Taxation
2023
2022
£
£
Current tax
UK corporation tax on profits for the current period
14,003
Deferred tax
Origination and reversal of timing differences
84,660
67,262
Total tax charge
84,660
81,265
The actual charge for the year can be reconciled to the expected charge for the year based on the profit or loss and the standard rate of tax as follows:
2023
2022
£
£
Profit before taxation
309,627
275,342
Expected tax charge based on the standard rate of corporation tax in the UK of 25.00% (2022: 19.00%)
77,407
52,315
Tax effect of expenses that are not deductible in determining taxable profit
190
52
Effect of change in corporation tax rate
28,845
35,033
Depreciation on assets not qualifying for tax allowances
6,145
4,501
Other permanent differences
(2,252)
Super deduction capital allowances
(25,675)
(10,636)
Taxation charge for the year
84,660
81,265
MARREN MICROWAVE LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 OCTOBER 2023
- 21 -
9
Tangible fixed assets
Freehold property
Integral features
Fixtures and fittings
Motor vehicles
Total
£
£
£
£
£
Cost
At 1 November 2022
1,270,192
51,195
692,117
856,158
2,869,662
Additions
117,575
100,870
981,148
1,199,593
Disposals
(473,090)
(473,090)
At 31 October 2023
1,270,192
168,770
792,987
1,364,216
3,596,165
Depreciation and impairment
At 1 November 2022
129,136
3,089
495,048
537,039
1,164,312
Depreciation charged in the year
25,404
2,825
59,819
331,479
419,527
Eliminated in respect of disposals
(422,962)
(422,962)
At 31 October 2023
154,540
5,914
554,867
445,556
1,160,877
Carrying amount
At 31 October 2023
1,115,652
162,856
238,120
918,660
2,435,288
At 31 October 2022
1,141,056
48,106
197,069
319,119
1,705,350
10
Stocks
2023
2022
£
£
Raw materials and consumables
1,586,160
1,691,889
11
Debtors
2023
2022
Amounts falling due within one year:
£
£
Trade debtors
1,463,081
1,239,700
Other debtors
4,875
85,518
Prepayments and accrued income
118,729
128,849
1,586,685
1,454,067
MARREN MICROWAVE LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 OCTOBER 2023
- 22 -
12
Creditors: amounts falling due within one year
2023
2022
Notes
£
£
Bank loans
14
25,835
24,267
Obligations under finance leases
15
166,154
26,511
Trade creditors
748,342
683,000
Amounts owed to group undertakings
184,308
184,308
Corporation tax
14,003
Other taxation and social security
337,250
236,219
Other creditors
699,960
610,140
Accruals and deferred income
17,219
19,923
2,179,068
1,798,371
Included in other creditors are hire purchase balances of £166,154 (2022 £26,511). These amounts are secured over the assets to which they relate.
Of the bank loans held, £25,835 (2022 £24,267) is secured over the company's freehold property.
13
Creditors: amounts falling due after more than one year
2023
2022
Notes
£
£
Bank loans and overdrafts
14
606,373
641,558
Obligations under finance leases
15
468,441
107,333
Other borrowings
14
475,657
739,139
1,550,471
1,488,030
Included in other creditors are hire purchase balances of £468,441 (2022 £107,333). These amounts are secured over the assets to which they relate.
Of the bank loans held, £606,373 (2022 641,558) is secured over the company's freehold property.
Amounts included above which fall due after five years are as follows:
Payable by instalments
479,243
517,263
MARREN MICROWAVE LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 OCTOBER 2023
- 23 -
14
Loans and overdrafts
2023
2022
£
£
Bank loans
632,208
665,825
Other loans
475,657
739,139
1,107,865
1,404,964
Payable within one year
25,835
24,267
Payable after one year
1,082,030
1,380,697
The long-term loans are secured by fixed charges over the property.
15
Finance lease obligations
2023
2022
Future minimum lease payments due under finance leases:
£
£
Within one year
166,154
26,511
In two to five years
468,441
107,333
634,595
133,844
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.
16
Deferred taxation
The following are the major deferred tax liabilities and assets recognised by the company and movements thereon:
Liabilities
Liabilities
2023
2022
Balances:
£
£
Accelerated capital allowances
321,975
145,974
Tax losses
(88,750)
-
Short term timing differences
(3,412)
(821)
229,813
145,153
MARREN MICROWAVE LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 OCTOBER 2023
16
Deferred taxation
(Continued)
- 24 -
2023
Movements in the year:
£
Liability at 1 November 2022
145,153
Charge to profit or loss
84,660
Liability at 31 October 2023
229,813
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.
17
Retirement benefit schemes
2023
2022
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
100,738
61,545
The company operates a defined contribution pension scheme for all qualifying employees. The assets of the scheme are held separately from those of the company in an independently administered fund.
18
Share capital
2023
2022
2023
2022
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary shares of £1 each
9,900
9,900
10,000
10,000
'A' Ordinary shares of £1 each
100
100
-
-
The share capital of the company has been restructured with 100 ordinary £1 shares designated as "A" ordinary non-voting £1 shares. They have the same rights as the 9,900 ordinary £1 shares, but with the exception of having no voting rights on any matter.
19
Financial commitments, guarantees and contingent liabilities
Total financial commitments which are not included in the balance sheet amount to £114,577 (2022 £109,576).
20
Operating lease commitments
Lessee
At the reporting end date the company had outstanding commitments for future minimum lease payments under non-cancellable operating leases, which fall due as follows:
2023
2022
£
£
Within one year
22,220
3,311
MARREN MICROWAVE LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 OCTOBER 2023
- 25 -
21
Cash generated from operations
2023
2022
£
£
Profit for the year after tax
224,967
194,077
Adjustments for:
Taxation charged
84,660
81,265
Finance costs
116,104
53,780
Investment income
(1,909)
(202)
(Gain)/loss on disposal of tangible fixed assets
(28,637)
696
Depreciation and impairment of tangible fixed assets
419,527
159,997
Movements in working capital:
Decrease/(increase) in stocks
105,729
(193,621)
(Increase)/decrease in debtors
(132,618)
75,507
Increase/(decrease) in creditors
253,489
(8,829)
Cash generated from operations
1,041,312
362,670
22
Analysis of changes in net debt
1 November 2022
Cash flows
New finance leases
31 October 2023
£
£
£
£
Cash at bank and in hand
549,997
(4,062)
-
545,935
Borrowings excluding overdrafts
(1,404,964)
297,099
-
(1,107,865)
Obligations under finance leases
(133,844)
78,374
(579,125)
(634,595)
(988,811)
371,411
(579,125)
(1,196,525)
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