Company registration number 00335572 (England and Wales)
MANOR COATING SYSTEMS LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 NOVEMBER 2023
MANOR COATING SYSTEMS LIMITED
COMPANY INFORMATION
Directors
P D Smith
E F Leijssen
(Appointed 1 March 2023)
A J Durkin
(Appointed 22 January 2024)
Secretary
P D Smith
Company number
00335572
Registered office
Head Office
Otley Road
Charlestown
Baildon
West Yorkshire
BD17 7DP
Auditor
BHP LLP
New Chartford House
Centurion Way
Cleckheaton
Bradford
West Yorkshire
BD19 3QB
MANOR COATING SYSTEMS LIMITED
CONTENTS
Page
Strategic report
1
Directors' report
2 - 3
Independent auditor's report
4 - 6
Statement of comprehensive income
7
Balance sheet
8
Statement of changes in equity
9
Notes to the financial statements
10 - 22
MANOR COATING SYSTEMS LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 30 NOVEMBER 2023
- 1 -
The directors present the strategic report for the year ended 30 November 2023.
Fair review of the business
Turnover reached a company record of £12.3m in the year to 30 November 2023, an increase of 9.5% over the prior year. This was partly attributable to the post Covid bounce back but also more aggressive approaches towards seeking and securing new business.
Price pressure on raw materials and packaging remained intense, driven by the continued war in Ukraine and other global events. Gross margins fell from 38.7% to 36.0% and reached the lowest level the business has experienced in modern times.
Despite vastly increased gas and electricity costs, operating margins improved as a result of sales volume growth coupled with improvements in productivity, lower staff numbers and significant efforts to control overhead costs. The company closed its Coventry site during 2023, following its closure of Teesside in 2022. The company now operates solely from its site in Shipley, West Yorkshire.
The company continued with its product rationalisation and streamlining during the year which is fundamental to future growth, cost control, regulatory compliance and improvements in productivity.
The company balance sheet was further strengthened via the retention of earnings.
Principal risks and uncertainties
The issue of business continuity and sustainability has been at the forefront of the minds of the directors for some time. The board was restructured with Dale Smith and Martin Smith standing down and Elizabeth Leijssen and Alex Durkin being appointed.
Consolidation within the chemical supply chain continued in 2023 reducing the range of supply options open to us.
Brexit continues to increase administration and shipping costs with any significant benefits yet to be felt. Trade between the UK and Northern Ireland is affected although the Windsor Framework may ultimately help in this regard.
High inflation in the UK and the resulting action on the National Minimum Wage and National Living Wage taken by the Government will further squeeze operating margins and increase overheads directly and indirectly.
Uncertainty regarding the impacts of the next UK general election are being felt which is exacerbated by the impending election in the USA. The UK economy teeters on recession which will limit demand by our customers for goods. We would welcome a clear, concise and consistent industrial strategy for the UK to enable us, our customers and suppliers to plan and invest.
By order of the Board and signed on its behalf by:
P D Smith
Secretary
13 May 2024
MANOR COATING SYSTEMS LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 30 NOVEMBER 2023
- 2 -
The directors present their annual report and financial statements for the year ended 30 November 2023.
Principal activities
The principal activity of the company continued to be that of the manufacture and supply of paint and related liquid coatings.
Directors
The directors who held office during the year and up to the date of signature of the financial statements were as follows:
P D Smith
E F Leijssen
(Appointed 1 March 2023)
D Smith
(Resigned 1 March 2023)
M Smith
(Resigned 1 March 2023)
A J Durkin
(Appointed 22 January 2024)
Results and dividends
The results for the year are set out on page 7.
No ordinary dividends were paid. The directors do not recommend payment of a final dividend.
Qualifying third party indemnity provisions
The company has made qualifying third party indemnity provisions for the benefit of its directors during the year. These provisions remain in force at the reporting date.
Financial instruments
All the company’s sales are denominated in pounds sterling.
Purchases made in foreign currencies are a modest proportion of the overall costs of the business. Foreign exchange differences are taken to the profit and loss account as they arise.
Materials manufactured or refined outside the United Kingdom are mainly purchased through independent third party agents and distributors who carry the currency risk.
The customer enforces credit terms through working with its customers.
Auditor
In accordance with the company's articles, a resolution proposing that BHP LLP be reappointed as auditor of the company will be put at a General Meeting.
MANOR COATING SYSTEMS LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 30 NOVEMBER 2023
- 3 -
Statement of directors' responsibilities
The directors are responsible for preparing the Strategic Report, Directors' 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;
- state whether applicable UK Accounting Standards have been followed, subject to any material departures disclosed and explained in the financial statements;
- 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.
The directors are responsible for the maintenance and integrity of the corporate and financial information included on the company's website. Legislation in the United Kingdom governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions.
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.
By order of the board
P D Smith
Secretary
13 May 2024
MANOR COATING SYSTEMS LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBER OF MANOR COATING SYSTEMS LIMITED
- 4 -
Opinion
We have audited the financial statements of Manor Coating Systems Limited (the 'company') for the year ended 30 November 2023 which comprise the statement of comprehensive income, the balance sheet, the statement of changes in equity and notes to the financial statements, including significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including 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 November 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.
MANOR COATING SYSTEMS LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBER OF MANOR COATING SYSTEMS LIMITED
- 5 -
Matters on which we are required to report by exception
In the light of the knowledge and understanding of the company and its environment obtained in the course of the audit, we have not identified material misstatements in the strategic report or the directors' report.
We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to report to you if, in our opinion:
adequate accounting records have not been kept, or returns adequate for our audit have not been received from branches not visited by us; or
the financial statements are not in agreement with the accounting records and returns; or
certain disclosures of remuneration specified by law are not made; or
we have not received all the information and explanations we require for our audit.
Responsibilities of directors
As explained more fully in the directors' responsibilities statement, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. In preparing the financial statements, the directors are responsible for assessing the company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the company or to cease operations, or have no realistic alternative but to do so.
Auditor's responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.
The extent to which our procedures are capable of detecting irregularities, including fraud, is detailed below.
We gained an understanding of the legal and regulatory framework applicable to the company and the industry in which it operates and considered the risk of acts by the company that were contrary to applicable laws and regulations, including fraud. We designed audit procedures to respond to the risk, recognising that the risk of not detecting a material misstatement due to fraud is higher than the risk of not detecting one resulting from error, as fraud may involve deliberate concealment by, for example, forgery or intentional misrepresentations, or through collusion.
We focused on laws and regulations, relevant to the company, which could give rise to a material misstatement in the financial statements. Our tests included agreeing the financial statement disclosures to underlying supporting documentation, review of client’s operation of controls within the year, in particular manual journals, review of provisions, enquiries with management and review of legal expenses. There are inherent limitations in the audit procedures described and, the further removed non-compliance with laws and regulations is from the events and transactions reflected in the financial statements, the less likely we would become aware of it.
As part of our audit, we addressed the risk of management override of internal controls, including testing of journals and review of nominal ledger. We evaluated whether there was evidence of bias by the directors that represented a risk of material misstatement due to fraud.
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.
MANOR COATING SYSTEMS LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBER OF MANOR COATING SYSTEMS LIMITED
- 6 -
This report is made solely to the company's member 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 member those matters we are required to state to the member 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 member, for our audit work, for this report, or for the opinions we have formed.
Ann Brown
Senior Statutory Auditor
For and on behalf of BHP LLP
13 May 2024
Chartered Accountants
Statutory Auditor
New Chartford House
Centurion Way
Cleckheaton
Bradford
West Yorkshire
BD19 3QB
MANOR COATING SYSTEMS LIMITED
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 30 NOVEMBER 2023
- 7 -
2023
2022
Notes
£
£
Turnover
3
12,328,844
11,264,362
Change in stocks of finished goods and in work in progress
(128,367)
123,203
Raw materials and consumables
(7,567,723)
(6,878,794)
Staff costs
5
(2,171,510)
(2,268,842)
Depreciation
4
(167,027)
(178,740)
Other operating expenses
(1,723,729)
(1,638,335)
Operating profit
4
570,488
422,854
Interest receivable and similar income
7
32,476
7,582
Interest payable and similar expenses
8
(79,507)
(31,396)
Profit before taxation
523,457
399,040
Tax on profit
9
(112,497)
(33,320)
Profit for the financial year
410,960
365,720
The Statement of Comprehensive Income has been prepared on the basis that all operations are continuing operations.
MANOR COATING SYSTEMS LIMITED
BALANCE SHEET
AS AT 30 NOVEMBER 2023
30 November 2023
- 8 -
2023
2022
Notes
£
£
£
£
Fixed assets
Intangible assets
11
Tangible assets
12
1,035,224
1,143,276
Investments
13
81,501
81,501
1,116,725
1,224,777
Current assets
Stocks
15
1,606,701
1,880,900
Debtors
16
2,515,219
2,169,222
Cash at bank and in hand
921,353
806,475
5,043,273
4,856,597
Creditors: amounts falling due within one year
17
(2,072,695)
(2,141,421)
Net current assets
2,970,578
2,715,176
Total assets less current liabilities
4,087,303
3,939,953
Creditors: amounts falling due after more than one year
18
(1,053,589)
(1,274,082)
Provisions for liabilities
19
(152,070)
(195,187)
Net assets
2,881,644
2,470,684
Capital and reserves
Called up share capital
22
52,500
52,500
Capital redemption reserve
47,500
47,500
Profit and loss reserves
2,781,644
2,370,684
Total equity
2,881,644
2,470,684
The financial statements were approved by the board of directors and authorised for issue on 13 May 2024 and are signed on its behalf by:
P D Smith
Director
Company Registration No. 00335572
MANOR COATING SYSTEMS LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 30 NOVEMBER 2023
- 9 -
Share capital
Capital redemption reserve
Profit and loss reserves
Total
Notes
£
£
£
£
Balance at 1 December 2021
52,500
47,500
2,424,964
2,524,964
Year ended 30 November 2022:
Profit and total comprehensive income
-
-
365,720
365,720
Dividends
10
-
-
(420,000)
(420,000)
Balance at 30 November 2022
52,500
47,500
2,370,684
2,470,684
Year ended 30 November 2023:
Profit and total comprehensive income
-
-
410,960
410,960
Balance at 30 November 2023
52,500
47,500
2,781,644
2,881,644
MANOR COATING SYSTEMS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 NOVEMBER 2023
- 10 -
1
Accounting policies
Company information
Manor Coating Systems Limited is a private company limited by shares incorporated in England and Wales. The registered office is Head Office, Otley Road, Charlestown, Baildon, West Yorkshire, BD17 7DP.
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.
This company is a qualifying entity for the purposes of FRS 102, being a member of a group where the parent of that group prepares publicly available consolidated financial statements, including this company, which are intended to give a true and fair view of the assets, liabilities, financial position and profit or loss of the group. The company has therefore taken advantage of exemptions from the following disclosure requirements:
Section 4 ‘Statement of Financial Position’ – Reconciliation of the opening and closing number of shares;
Section 7 ‘Statement of Cash Flows’ – Presentation of a statement of cash flow and related notes and disclosures;
Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instrument Issues’ – Carrying amounts, interest income/expense and net gains/losses for each category of financial instrument; basis of determining fair values; details of collateral, loan defaults or breaches, details of hedges, hedging fair value changes recognised in profit or loss and in other comprehensive income;
Section 26 ‘Share based Payment’ – Share-based payment expense charged to profit or loss, reconciliation of opening and closing number and weighted average exercise price of share options, how the fair value of options granted was measured, measurement and carrying amount of liabilities for cash-settled share-based payments, explanation of modifications to arrangements;
Section 33 ‘Related Party Disclosures’ – Compensation for key management personnel.
The financial statements of the company are consolidated in the financial statements of Shipley Paint (Holdings) Limited. These consolidated financial statements are available from its registered office.
The financial statements present information about the company as an individual undertaking and not about its group. The company has not prepared group accounts as it is exempt from the requirement to do so by section 400 of the Companies Act 2006 as it is a subsidiary undertaking of Shipley Paint (Holdings) Limited , a company incorporated in England and Wales, and is included in the consolidated accounts of that company.
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.
MANOR COATING SYSTEMS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 NOVEMBER 2023
1
Accounting policies
(Continued)
- 11 -
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:
Plant and machinery
Straight line over 10 & 15 years
Fixtures and fittings
Straight line over 4, 10 & 15 years
Motor vehicles
Straight line over 4 years
The gain or loss arising on the disposal of an asset is determined as the difference between the sale proceeds and the carrying value of the asset, and is credited or charged to profit or loss.
1.5
Fixed asset investments
Interests in subsidiaries, associates and jointly controlled entities are initially measured at cost and subsequently measured at cost less any accumulated impairment losses. The investments are assessed for impairment at each reporting date and any impairment losses or reversals of impairment losses are recognised immediately in profit or loss.
A subsidiary is an entity controlled by the company. Control is the power to govern the financial and operating policies of the entity so as to obtain benefits from its activities.
1.6
Impairment of fixed assets
At each reporting period end date, the company reviews the carrying amounts of its tangible and intangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where it is not possible to estimate the recoverable amount of an individual asset, the company estimates the recoverable amount of the cash-generating unit to which the asset belongs.
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.
MANOR COATING SYSTEMS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 NOVEMBER 2023
1
Accounting policies
(Continued)
- 12 -
1.7
Stocks
Stocks are stated at the lower of cost and estimated selling price less costs to complete and sell, after due regard for obsolete and slow moving stocks. Cost comprises direct materials and, where applicable, direct labour costs and those overheads that have been incurred in bringing the stocks to their present location and condition.
Stocks held for distribution at no or nominal consideration are measured at 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.
1.8
Cash and cash equivalents
Cash and cash equivalents 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.
1.9
Financial instruments
The company has elected to apply the provisions of Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instruments Issues’ of FRS 102 to all of its financial instruments.
Financial instruments are recognised in the company's balance sheet when the company becomes party to the contractual provisions of the instrument.
Financial assets and liabilities are offset, with the net amounts presented in the financial statements, when there is a legally enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously.
Basic financial assets
Basic financial assets, which include debtors 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.
MANOR COATING SYSTEMS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 NOVEMBER 2023
1
Accounting policies
(Continued)
- 13 -
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 and preference shares that are classified as debt, are initially recognised at transaction price unless the arrangement constitutes a financing transaction, where the debt instrument is measured at the present value of the future payments discounted at a market rate of interest. Financial liabilities classified as payable within one year are not amortised.
Debt instruments are subsequently carried at amortised cost, using the effective interest rate method.
Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Amounts payable are classified as current liabilities if payment is due within one year or less. If not, they are presented as non-current liabilities. Trade creditors are recognised initially at transaction price and subsequently measured at amortised cost using the effective interest method.
Other financial liabilities
Derivatives, including interest rate swaps and forward foreign exchange contracts, are not basic financial instruments. Derivatives are initially recognised at fair value on the date a derivative contract is entered into and are subsequently re-measured at their fair value. Changes in the fair value of derivatives are recognised in profit or loss in finance costs or finance income as appropriate, unless hedge accounting is applied and the hedge is a cash flow hedge.
Debt instruments that do not meet the conditions in FRS 102 paragraph 11.9 are subsequently measured at fair value through profit or loss. Debt instruments may be designated as being measured at fair value through profit or loss to eliminate or reduce an accounting mismatch or if the instruments are measured and their performance evaluated on a fair value basis in accordance with a documented risk management or investment strategy.
MANOR COATING SYSTEMS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 NOVEMBER 2023
1
Accounting policies
(Continued)
- 14 -
Derecognition of financial liabilities
Financial liabilities are derecognised when the company’s contractual obligations expire or are discharged or cancelled.
1.10
Equity instruments
Equity instruments issued by the company are recorded at the proceeds received, net of transaction costs. Dividends payable on equity instruments are recognised as liabilities once they are no longer at the discretion of the company.
1.11
Taxation
The tax expense represents the sum of the tax currently payable and deferred tax.
Current tax
The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the profit and loss account because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The company’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.
Deferred tax
Deferred tax is recognised, without discounting, in respect of all timing differences between the treatment of certain items for taxation and accounting purposes, which have arisen but not reversed by the balance sheet date, except as required by FRS19.
Deferred tax is measured at the rates that are expected to apply in the periods when the timing differences are expected to reverse, based on the tax rates and law enacted at the balance sheet date.
1.12
Employee benefits
The costs of short-term employee benefits are recognised as a liability and an expense, unless those costs are required to be recognised as part of the cost of stock or fixed assets.
The cost of any unused holiday entitlement is recognised in the period in which the employee’s services are received.
Termination benefits are recognised immediately as an expense when the company is demonstrably committed to terminate the employment of an employee or to provide termination benefits.
1.13
Retirement benefits
The company operates a defined contribution pension scheme. Contributions are recognised in the profit and loss account in the period in which they become payable in accordance with the rules of the scheme.
1.14
Leases
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.
MANOR COATING SYSTEMS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 NOVEMBER 2023
- 15 -
2
Judgements and key sources of estimation uncertainty
In the application of the company’s accounting policies, the directors are required to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised where the revision affects only that period, or in the period of the revision and future periods where the revision affects both current and future periods.
Key sources of estimation uncertainty
The estimates and assumptions which have a significant risk of causing a material adjustment to the carrying amount of assets and liabilities are as follows.
Stock provisions
It is necessary to consider the recoverability of the cost of stock and associated provisioning required. When calculating the stock provision, management considers the useage and saleability of stock items.
3
Turnover and other revenue
An analysis of the company's turnover is as follows:
2023
2022
£
£
Turnover analysed by class of business
Sales
12,328,844
11,264,362
2023
2022
£
£
Turnover analysed by geographical market
Sales - UK
12,187,688
11,091,513
Sales - Overseas
141,156
172,849
12,328,844
11,264,362
2023
2022
£
£
Other revenue
Interest income
32,476
7,582
MANOR COATING SYSTEMS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 NOVEMBER 2023
- 16 -
4
Operating profit
2023
2022
Operating profit for the year is stated after charging:
£
£
Fees payable to the company's auditor for the audit of the company's financial statements
21,790
14,530
Depreciation of owned tangible fixed assets
163,026
178,479
Loss on disposal of tangible fixed assets
4,001
261
Operating lease charges
117,832
173,713
5
Employees
The average monthly number of persons (including directors) employed by the company during the year was:
2023
2022
Number
Number
Administration and support
60
63
Their aggregate remuneration comprised:
2023
2022
£
£
Wages and salaries
1,866,767
1,937,774
Social security costs
188,281
212,859
Pension costs
116,462
118,209
2,171,510
2,268,842
6
Directors' remuneration
2023
2022
£
£
Remuneration for qualifying services
203,595
127,620
Company pension contributions to defined contribution schemes
31,172
21,989
234,767
149,609
The number of directors for whom retirement benefits are accruing under defined contribution schemes amounted to 2 (2022 - 1).
MANOR COATING SYSTEMS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 NOVEMBER 2023
6
Directors' remuneration
(Continued)
- 17 -
Remuneration disclosed above include the following amounts paid to the highest paid director:
2023
2022
£
£
Remuneration for qualifying services
133,243
85,752
Company pension contributions to defined contribution schemes
21,989
21,989
7
Interest receivable and similar income
2023
2022
£
£
Interest income
Interest on bank deposits
32,476
7,582
8
Interest payable and similar expenses
2023
2022
£
£
Interest payable to group undertakings
79,507
31,396
9
Taxation
2023
2022
£
£
Current tax
UK corporation tax on profits for the current period
155,614
31,924
Adjustments in respect of prior periods
(15,591)
Total current tax
155,614
16,333
Deferred tax
Origination and reversal of timing differences
(43,117)
16,987
Total tax charge
112,497
33,320
MANOR COATING SYSTEMS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 NOVEMBER 2023
9
Taxation
(Continued)
- 18 -
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
523,457
399,040
Expected tax charge based on the standard rate of corporation tax in the UK of 23.01% (2022: 19.00%)
120,452
75,818
Tax effect of expenses that are not deductible in determining taxable profit
429
357
Effect of change in corporation tax rate
(3,430)
Group relief
(4,826)
Other permanent differences
(27,264)
Under/(over) provided in prior years
(15,591)
Fixed asset differences
(128)
Taxation for the year
112,497
33,320
10
Dividends
2023
2022
£
£
Dividends paid
420,000
11
Intangible fixed assets
Goodwill
£
Cost
At 1 December 2022 and 30 November 2023
140,308
Amortisation and impairment
At 1 December 2022 and 30 November 2023
140,308
Carrying amount
At 30 November 2023
At 30 November 2022
MANOR COATING SYSTEMS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 NOVEMBER 2023
- 19 -
12
Tangible fixed assets
Plant and machinery
Fixtures and fittings
Motor vehicles
Total
£
£
£
£
Cost
At 1 December 2022
2,498,477
809,379
287,928
3,595,784
Additions
64,571
7,658
72,229
Disposals
(41,646)
(56,111)
(49,536)
(147,293)
At 30 November 2023
2,521,402
760,926
238,392
3,520,720
Depreciation and impairment
At 1 December 2022
1,497,883
735,443
219,182
2,452,508
Depreciation charged in the year
94,869
21,921
46,236
163,026
Eliminated in respect of disposals
(38,319)
(42,183)
(49,536)
(130,038)
At 30 November 2023
1,554,433
715,181
215,882
2,485,496
Carrying amount
At 30 November 2023
966,969
45,745
22,510
1,035,224
At 30 November 2022
1,000,594
73,936
68,746
1,143,276
13
Fixed asset investments
2023
2022
Notes
£
£
Investments in subsidiaries
14
81,501
81,501
Movements in fixed asset investments
Shares in group undertakings
£
Cost or valuation
At 1 December 2022 & 30 November 2023
86,501
Impairment
At 1 December 2022 & 30 November 2023
5,000
Carrying amount
At 30 November 2023
81,501
At 30 November 2022
81,501
MANOR COATING SYSTEMS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 NOVEMBER 2023
- 20 -
14
Subsidiaries
Details of the company's subsidiaries at 30 November 2023 are as follows:
Name of undertaking
Nature of business
Class of
% Held
shareholding
Direct
Indirect
John Hargreaves & Son (Bradford) Limited
Dormant
Ordinary
100.00
Paintfire Limited
Dormant
Ordinary
100.00
The investments in subsidiaries are all stated at cost less any provisions for impairment.
The registered office of all subsidiaries is Head Office, Otley Road, Charlestown, Baildon, West Yorkshire, BD17 7DP.
15
Stocks
2023
2022
£
£
Raw materials and consumables
1,016,572
1,162,404
Finished goods and goods for resale
590,129
718,496
1,606,701
1,880,900
16
Debtors
2023
2022
Amounts falling due within one year:
£
£
Trade debtors
2,284,631
2,084,469
Other debtors
7,940
15,433
Prepayments and accrued income
222,648
69,320
2,515,219
2,169,222
17
Creditors: amounts falling due within one year
2023
2022
£
£
Trade creditors
1,228,223
1,424,086
Amounts owed to group undertakings
81,501
81,501
Corporation tax
155,614
31,924
Other taxation and social security
232,228
208,793
Other creditors
57,871
63,147
Accruals and deferred income
317,258
331,970
2,072,695
2,141,421
MANOR COATING SYSTEMS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 NOVEMBER 2023
- 21 -
18
Creditors: amounts falling due after more than one year
2023
2022
£
£
Amounts owed to group undertakings
1,053,589
1,274,082
19
Provisions for liabilities
2023
2022
Notes
£
£
Deferred tax liabilities
20
152,070
195,187
20
Deferred taxation
Deferred tax assets and liabilities are offset where the company has a legally enforceable right to do so. The following is the analysis of the deferred tax balances (after offset) for financial reporting purposes:
Liabilities
Liabilities
2023
2022
Balances:
£
£
Accelerated capital allowances
228,721
247,592
Short term timing differences
(76,651)
(52,405)
152,070
195,187
2023
Movements in the year:
£
Liability at 1 December 2022
195,187
Credit to profit or loss
(43,117)
Liability at 30 November 2023
152,070
Of the deferred tax liability set out above, £37,000 is expected to reverse within 12 months and relates to accelerated capital allowances that are expected to mature in the same period.
21
Retirement benefit schemes
2023
2022
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
116,462
118,209
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.
MANOR COATING SYSTEMS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 NOVEMBER 2023
- 22 -
22
Share capital
2023
2022
2023
2022
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary shares of £1 each
52,500
52,500
52,500
52,500
All shares are ordinary shares. Shareholders are entitled to dividends in proportion to their shareholding.
23
Financial commitments, guarantees and contingent liabilities
There is a debenture in place creating a fixed and floating charge over the assets of Manor Coating Systems Limited. A cross guarantee exists between Manor Coating Systems (Holdings) Limited, Manor Coating Systems (Properties) Limited and Manor Coating Systems Limited supported by debentures from Manor Coating Systems (Properties) Limited and Manor Coating Systems (Holdings) Limited.
24
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
94,654
83,638
Between two and five years
93,860
14,180
188,514
97,818
25
Related party transactions
No guarantees have been given or received.
26
Controlling party
The parent undertaking of Manor Coating Systems Limited is Manor Coating Systems (Holdings) Limited, a company registered in England and Wales.
The ultimate parent undertaking is Shipley Paint (Holdings) Limited, a company registered in England and Wales.
The registered office of both entities is Head Office, Otley Road, Charlestown, Baildon, West Yorkshire, BD17 7DP.
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