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REGISTERED NUMBER: 00828340 (England and Wales)



















STRATEGIC REPORT, REPORT OF THE DIRECTORS AND

FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 OCTOBER 2023

FOR

CURROCK ENGINEERING COMPANY LIMITED

CURROCK ENGINEERING COMPANY LIMITED (REGISTERED NUMBER: 00828340)






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




Page

Company Information 1

Strategic Report 2

Report of the Directors 3

Report of the Independent Auditors 5

Income Statement 9

Other Comprehensive Income 10

Balance Sheet 11

Statement of Changes in Equity 12

Cash Flow Statement 13

Notes to the Cash Flow Statement 14

Notes to the Financial Statements 15


CURROCK ENGINEERING COMPANY LIMITED

COMPANY INFORMATION
FOR THE YEAR ENDED 31 OCTOBER 2023







Directors: A Murray
Mrs J Murray





Secretary: Mrs J Murray





Registered office: Unit 9, Tattersall Way
Widford Industrial Estate
Chelmsford
Essex
CM1 3UB





Registered number: 00828340 (England and Wales)





Auditors: Baverstocks Limited
Statutory Auditor
Chartered Certified Accountants
Dickens House
Guithavon Street
Witham
Essex
CM8 1BJ

CURROCK ENGINEERING COMPANY LIMITED (REGISTERED NUMBER: 00828340)

STRATEGIC REPORT
FOR THE YEAR ENDED 31 OCTOBER 2023

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

Review of business
The principal activities of the company continued during the year as precision engineers.

The key financial and other performance indicators during the year were as follows:

2023 2022 Change

Turnover 5,777,433 7,593,393 -23.92%
Gross profit -4,500,917 1,990,012 -326.18%
Profit after tax -7,288,802 767,574 -1,049,59%
Equity shareholders' funds 880,562 8,224,665 -89.29%
Stock and work in progress 4,009,423 7,150,615 -43.93%
Gross profit percentage -77.91% 26.21% -397.25%
Current ratio 84% 208% -59.62%
Average number of employees 81 85 -4.71%

Production and sales have been negatively affected by encountering technical issues with a variety of product developments and qualification programmes.

The impact of Covid which resulted in delayed orders continued throughout the year.

The Bank of England base rate rose by 3% during the year (2.25% to 5.25%). This increase has resulted in significantly higher finance charges through the year.

The company is dependent on defence spending. Defence spending depends on a complex mix of political considerations and budgetary constraints. The recent conflicts in Ukraine and Gaza, in addition to other areas of heightened global tension has resulted in proposed increases in countries defence spending as a percentage of GDP.

Principal risks and uncertainties
The order book stood at £14 million at the financial year end. Order intake during the review period was £9.7 million.
Key issues remain converting the order book into sales, given the technical issues with some of the products which has had a significant impact on turnover and cash balances.

The company continues to participate in Defence component manufacturing activities through tier one defence contractors.

Key performance indicators
Currock achieved re-accreditation to the EN9100 Quality Standard in 2023.

During the review period, On Time Delivery '(OTD') was affected by product technical issues. Improvement is targeted for the next financial year, however initial reduced production output has continued to impact this.

On behalf of the board:





A Murray - Director


31 July 2024

CURROCK ENGINEERING COMPANY LIMITED (REGISTERED NUMBER: 00828340)

REPORT OF THE DIRECTORS
FOR THE YEAR ENDED 31 OCTOBER 2023

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

Dividends
The total distribution of dividends for the year ended 31 October 2023 will be £ 55,301 .

Future developments
The directors are aware, as at the date of this report, of an impending change in ownership of the company. MBDA are anticipated to acquire the entire shareholding of the company in August 2024.

Directors
The directors shown below have held office during the whole of the period from 1 November 2022 to the date of this report.

A Murray
Mrs J Murray

Other changes in directors holding office are as follows:

M J Burrows - appointed 19 December 2022 - resigned 27 July 2023

Statement of directors' responsibilities
The directors are responsible for preparing the Strategic Report, the Report of the Directors and the financial statements in accordance with applicable law and regulations.

Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the company and of the profit or loss of the company for that period. In preparing these financial statements, the directors are required to:

-select suitable accounting policies and then apply them consistently;
-make judgements and accounting estimates that are reasonable and prudent;
-prepare the financial statements on the going concern basis unless it is inappropriate to presume that the company will continue in business.

The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the company's transactions and disclose with reasonable accuracy at any time the financial position of the company and enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

Statement as to disclosure of information to auditors
So far as the directors are aware, there is no relevant audit information (as defined by Section 418 of the Companies Act 2006) of which the company's auditors are unaware, and each director has taken all the steps that he or she ought to have taken as a director in order to make himself or herself aware of any relevant audit information and to establish that the company's auditors are aware of that information.

CURROCK ENGINEERING COMPANY LIMITED (REGISTERED NUMBER: 00828340)

REPORT OF THE DIRECTORS
FOR THE YEAR ENDED 31 OCTOBER 2023


Auditors
The auditors, Baverstocks Limited, will be proposed for re-appointment at the forthcoming Annual General Meeting.

On behalf of the board:



A Murray - Director


31 July 2024

REPORT OF THE INDEPENDENT AUDITORS TO THE MEMBERS OF
CURROCK ENGINEERING COMPANY LIMITED

Opinion
We have audited the financial statements of Currock Engineering Company Limited (the 'company') for the year ended 31 October 2023 which comprise the Income Statement, Other Comprehensive Income, Balance Sheet, Statement of Changes in Equity, Cash Flow Statement and Notes to the Cash Flow Statement, Notes to the Financial Statements, including a summary of significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland' (United Kingdom Generally Accepted Accounting Practice).

In our opinion the financial statements:
-give a true and fair view of the state of the company's affairs as at 31 October 2023 and of its loss for the year then ended;
-have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and
-have been prepared in accordance with the requirements of the Companies Act 2006.

Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditors' responsibilities for the audit of the financial statements section of our report. We are independent of the company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC's Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Material uncertainty related to going concern
We draw your attention to Note 2 which indicates that the effects of a tough and challenging year which has resulted in a loss after tax of £7,288,802 due to the write off of stock and work in progress, production and sales which have been negatively affected by encountering technical issues with a variety of product developments and qualification programmes. This together with the continuing impact of Covid which has resulted in delayed orders has resulted in the company making significant losses during the year.

These issues have had an adverse effect on the company’s operations and cash flow. As stated in Note 2, these events or conditions, along with other matters as set forth in Note 2 indicate that a material uncertainty exists that may cast significant doubt on the company’s ability to continue as a going concern.
Our opinion is not modified in respect of this matter.

Other information
The directors are responsible for the other information. The other information comprises the information in the Strategic Report and the Report of the Directors, but does not include the financial statements and our Report of the Auditors thereon.

Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon.

In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.

Opinions on other matters prescribed by the Companies Act 2006
In our opinion, based on the work undertaken in the course of the audit:
- the information given in the Strategic Report and the Report of the Directors for the financial year for which the financial statements are prepared is consistent with the financial statements; and
- the Strategic Report and the Report of the Directors have been prepared in accordance with applicable legal requirements.

REPORT OF THE INDEPENDENT AUDITORS TO THE MEMBERS OF
CURROCK ENGINEERING COMPANY LIMITED


Matters on which we are required to report by exception
In the light of the knowledge and understanding of the company and its environment obtained in the course of the audit, we have not identified material misstatements in the Strategic Report or the Report of the Directors.

We have nothing to report in respect of the following matters where the Companies Act 2006 requires us to report to you if, in our opinion:
- adequate accounting records have not been kept, or returns adequate for our audit have not been received from branches not visited by us; or
- the financial statements are not in agreement with the accounting records and returns; or
- certain disclosures of directors' remuneration specified by law are not made; or
- we have not received all the information and explanations we require for our audit.

Responsibilities of directors
As explained more fully in the Statement of Directors' Responsibilities set out on page three, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the financial statements, the directors are responsible for assessing the company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the company or to cease operations, or have no realistic alternative but to do so.

REPORT OF THE INDEPENDENT AUDITORS TO THE MEMBERS OF
CURROCK ENGINEERING COMPANY LIMITED


Auditors' responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue a Report of the Auditors that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.

The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below:

Our approach to assessing the risks of material misstatement due to fraud and noncompliance with laws and regulations was as follows:-

We obtained an understanding of the legal and regulatory frameworks that are applicable to the entity and determined that the most significant are those that relate to compliance with the Companies Act 2006, Financial Reporting Standard 102, relevant tax legislation and the British Standards Institute (BSI).

We assessed the risks of material misstatements in respect of fraud and determined that the principal risks were related to posting of journal entries to manipulate the results for the financial year. We made enquiries of management during the audit to determine any instances of fraud, while also discussing the areas of risk in relation to audit as part of our audit team meeting.

Based upon the results of our risk assessment we designed our audit procedures to identify noncompliance with such laws and regulations identified above and also material misstatements in respect of fraud as follows:-

- We obtained an understanding of the legal and regulatory framework in relation to the entity and how
it complies with this framework. This included discussions with management, reviews of legal and
professional fees and a review of the results of audits conducted by BSI.

-
We discussed with the management the entity's policies and procedures including systems and
controls. Compliance with these was tested via discussion and walkthrough testing of controls.

-
We enquired of management of their policies and procedures in relation to fraud and their knowledge
of any actual, suspected, or alleged fraud.

-
We ensured compliance with Pay as You Earn and Value Added Tax laws via reviewing returns and
correspondence.
- We reviewed the recent results of audits with BSI to ensure ongoing compliance.


-
We considered the risk of fraud through management override, and, in response, we incorporated
testing of manual journal entries into our audit approach. This included the testing of journal entries
throughout the year as well as year end journals.
- We agreed the financial statement disclosures to underlying supporting documentation.
- We enquired of management if there were any potential litigation or claims.

Whilst considering how our audit work addressed the detection of irregularities, we also consider the likelihood of detection based on our approach. Irregularities from fraud are inherently more difficult to detect than those arising from error.

Because of the inherent limitations of an audit, there is a risk that we will not detect all irregularities, including those leading to a material misstatement in the financial statements or non-compliance with regulation. This risk increases the more that compliance with a law or regulation is removed from the events and transactions reflected in the financial statements, as we will be less likely to become aware of instances of non-compliance. The risk is also greater regarding irregularities occurring due to fraud rather than error, as fraud involves intentional concealment, forgery, collusion, omission or misrepresentation.

A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council's website at www.frc.org.uk/auditorsresponsibilities. This description forms part of our Report of the Auditors.

REPORT OF THE INDEPENDENT AUDITORS TO THE MEMBERS OF
CURROCK ENGINEERING COMPANY LIMITED


Use of our report
This report is made solely to the company's members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the company's members those matters we are required to state to them in a Report of the Auditors and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company's members as a body, for our audit work, for this report, or for the opinions we have formed.




Steven Collins (Senior Statutory Auditor)
for and on behalf of Baverstocks Limited
Statutory Auditor
Chartered Certified Accountants
Dickens House
Guithavon Street
Witham
Essex
CM8 1BJ

31 July 2024

CURROCK ENGINEERING COMPANY LIMITED (REGISTERED NUMBER: 00828340)

INCOME STATEMENT
FOR THE YEAR ENDED 31 OCTOBER 2023

2023 2022
Notes £    £    £    £   

Turnover 3 5,777,433 7,593,393

Cost of sales 10,278,350 5,603,381
Gross (loss)/profit (4,500,917 ) 1,990,012

Distribution costs 75,462 74,686
Administrative expenses 2,985,510 1,548,897
3,060,972 1,623,583
Operating (loss)/profit 5 (7,561,889 ) 366,429

Interest receivable and similar income 22 9
(7,561,867 ) 366,438

Interest payable and similar expenses 6 379,557 124,754
(Loss)/profit before taxation (7,941,424 ) 241,684

Tax on (loss)/profit 7 (652,622 ) (525,890 )
(Loss)/profit for the financial year (7,288,802 ) 767,574

CURROCK ENGINEERING COMPANY LIMITED (REGISTERED NUMBER: 00828340)

OTHER COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 OCTOBER 2023

2023 2022
Notes £    £   

(Loss)/profit for the year (7,288,802 ) 767,574


Other comprehensive income - -
Total comprehensive income for the
year

(7,288,802

)

767,574

CURROCK ENGINEERING COMPANY LIMITED (REGISTERED NUMBER: 00828340)

BALANCE SHEET
31 OCTOBER 2023

2023 2022
Notes £    £    £    £   
Fixed assets
Intangible assets 9 - 953,595
Tangible assets 10 4,049,037 4,530,219
4,049,037 5,483,814

Current assets
Stocks 11 4,009,423 7,150,615
Debtors 12 1,420,613 3,810,950
Cash at bank 6,858 82,437
5,436,894 11,044,002
Creditors
Amounts falling due within one year 13 6,504,767 5,297,592
Net current (liabilities)/assets (1,067,873 ) 5,746,410
Total assets less current liabilities 2,981,164 11,230,224

Creditors
Amounts falling due after more than one
year

14

(2,100,602

)

(2,352,937

)

Provisions for liabilities 18 - (652,622 )
Net assets 880,562 8,224,665

Capital and reserves
Called up share capital 19 300,200 300,200
Retained earnings 20 580,362 7,924,465
Shareholders' funds 880,562 8,224,665

The financial statements were approved by the Board of Directors and authorised for issue on 31 July 2024 and were signed on its behalf by:





A Murray - Director


CURROCK ENGINEERING COMPANY LIMITED (REGISTERED NUMBER: 00828340)

STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 OCTOBER 2023

Called up
share Retained Total
capital earnings equity
£    £    £   
Balance at 1 November 2021 300,200 7,322,291 7,622,491

Changes in equity
Dividends - (165,400 ) (165,400 )
Total comprehensive income - 767,574 767,574
Balance at 31 October 2022 300,200 7,924,465 8,224,665

Changes in equity
Dividends - (55,301 ) (55,301 )
Total comprehensive income - (7,288,802 ) (7,288,802 )
Balance at 31 October 2023 300,200 580,362 880,562

CURROCK ENGINEERING COMPANY LIMITED (REGISTERED NUMBER: 00828340)

CASH FLOW STATEMENT
FOR THE YEAR ENDED 31 OCTOBER 2023

2023 2022
Notes £    £   
Cash flows from operating activities
Cash generated from operations 1 (395,692 ) 59,110
Interest paid (156,002 ) (20,069 )
Interest element of hire purchase
payments paid

(223,555

)

(104,685

)
Taxation refund 743,721 608,844
Net cash from operating activities (31,528 ) 543,200

Cash flows from investing activities
Purchase of intangible fixed assets - (570,166 )
Purchase of tangible fixed assets (20,466 ) (52,718 )
Interest received 22 9
Net cash from investing activities (20,444 ) (622,875 )

Cash flows from financing activities
New loans in year 679,683 229,000
Loan repayments in year (352,167 ) (85,466 )
Invoice discounting advance (144,643 ) 445,696
Trade finance facility 195,701 155,015
Capital repayments in year (250,042 ) (523,757 )
Amount introduced by directors - 124,000
Amount withdrawn by directors (96,838 ) (159,945 )
Equity dividends paid (55,301 ) (165,400 )
Net cash from financing activities (23,607 ) 19,143

Decrease in cash and cash equivalents (75,579 ) (60,532 )
Cash and cash equivalents at
beginning of year

2

82,437

142,969

Cash and cash equivalents at end of
year

2

6,858

82,437

CURROCK ENGINEERING COMPANY LIMITED (REGISTERED NUMBER: 00828340)

NOTES TO THE CASH FLOW STATEMENT
FOR THE YEAR ENDED 31 OCTOBER 2023

1. Reconciliation of (loss)/profit before taxation to cash generated from operations
2023 2022
£    £   
(Loss)/profit before taxation (7,941,424 ) 241,684
Depreciation charges 475,994 880,887
Loss on disposal of fixed assets 979,249 -
Finance costs 379,557 124,754
Finance income (22 ) (9 )
(6,106,646 ) 1,247,316
Decrease/(increase) in stocks 3,141,192 (1,351,946 )
Decrease/(increase) in trade and other debtors 1,743,454 (172,093 )
Increase in trade and other creditors 826,308 335,833
Cash generated from operations (395,692 ) 59,110

2. Cash and cash equivalents

The amounts disclosed on the Cash Flow Statement in respect of cash and cash equivalents are in respect of these Balance Sheet amounts:

Year ended 31 October 2023
31.10.23 1.11.22
£    £   
Cash and cash equivalents 6,858 82,437
Year ended 31 October 2022
31.10.22 1.11.21
£    £   
Cash and cash equivalents 82,437 142,969


3. Analysis of changes in net debt

At 1.11.22 Cash flow At 31.10.23
£    £    £   
Net cash
Cash at bank 82,437 (75,579 ) 6,858
82,437 (75,579 ) 6,858
Debt
Finance leases (2,479,708 ) 250,042 (2,229,666 )
Debts falling due within 1 year (2,512,460 ) (361,666 ) (2,874,126 )
Debts falling due after 1 year (435,688 ) (16,908 ) (452,596 )
(5,427,856 ) (128,532 ) (5,556,388 )
Total (5,345,419 ) (204,111 ) (5,549,530 )

CURROCK ENGINEERING COMPANY LIMITED (REGISTERED NUMBER: 00828340)

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

1. Statutory information

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

2. Accounting policies

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

Critical accounting judgements and key sources of estimation uncertainty
Estimates and judgements are continually evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances.

There are no estimates and assumptions that have a significant risk of causing material adjustment in the financial statements.

Turnover
Turnover is measured at the fair value of the consideration received or receivable, excluding discounts, rebates, value added tax and other sales taxes.

Intangible assets
Intangible assets are initially measured at cost. After initial recognition, intangible assets are measured at cost less any accumulated amortisation and any accumulated impairment losses.

Computer software is being amortised evenly over its estimated useful life of nil years.

Tangible fixed assets
Depreciation is provided at the following annual rates in order to write off each asset over its estimated useful life or, if held under a finance lease, over the lease term, whichever is the shorter.
Short Leasehold - 10% on cost
Plant and Machinery - 25% on reducing balance and 10% on reducing balance
Fixtures and Fittings - 25% on reducing balance
Motor Vehicles - 25% on reducing balance
Office Equipment - 33% on cost

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

Cost is calculated using the first-in, first-out method and includes all purchase, transport, and handling costs in bringing stocks to their present location and condition.

Taxation
Taxation for the year comprises current and deferred tax. Tax is recognised in the Income Statement, except to the extent that it relates to items recognised in other comprehensive income or directly in equity.

Current or deferred taxation assets and liabilities are not discounted.

Current tax is recognised at the amount of tax payable using the tax rates and laws that have been enacted or substantively enacted by the balance sheet date.


CURROCK ENGINEERING COMPANY LIMITED (REGISTERED NUMBER: 00828340)

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

2. Accounting policies - continued
Deferred tax
Deferred tax is recognised in respect of all timing differences that have originated but not reversed at the balance sheet date.

Timing differences arise from the inclusion of income and expenses in tax assessments in periods different from those in which they are recognised in financial statements. Deferred tax is measured using tax rates and laws that have been enacted or substantively enacted by the year end and that are expected to apply to the reversal of the timing difference.

Unrelieved tax losses and other deferred tax assets are recognised only to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits.

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

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

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

Pension costs and other post-retirement benefits
The company operates a defined contribution pension scheme. Contributions payable to the company's pension scheme are charged to profit or loss in the period to which they relate.

Invoice discounting
Trade receivables are subject to an invoice discounting facility whereby an advance is received based upon and secured upon trade debtors.

Where the Company has retained significant risks and rewards relating to the discounted debts, separate presentation is adopted whereby the gross debts and a corresponding liability in respect of the advance received is shown separately on the balance sheet within creditors. The interest element of the invoice discounter's charge is recognised as it accrues and included in the profit and loss account within finance costs.

Impairment
Assets not measured at fair value are reviewed for any indication that the asset may be impaired at each balance sheet date. If such indication exists, the recoverable amount of the asset, or the asset's cash generating unit, is estimated and compared to the carrying amount. Where the carrying amount exceeds its recoverable amount, an impairment loss is recognised in profit or loss unless the asset is carried at a revalued amount where the impairment loss is a revaluation decrease.

CURROCK ENGINEERING COMPANY LIMITED (REGISTERED NUMBER: 00828340)

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

2. Accounting policies - continued

Going concern
The company has experienced a tough and challenging year which has resulted in a loss after tax of £7,288,802 due to a number of factors as follows:-

The write off of overstated stock and work in progress.

Production and sales which have been negatively affected by encountering technical issues with a variety of product developments and qualification programmes.

The continuing impact of Covid which has resulted in delayed orders has resulted in the company making significant losses during the year.

As a result of the issues during the year, the company has had significant cashflow issues which have continued since the year end. This has meant that the management have sought support for the day-to-day working capital requirements of the company and have resulted in borrowings from MBDA to assist with the cashflow management. MBDA are one of the company's largest customers and rely on the manufacturing activities of the company within a specialised area. The company's forecasts and projections up to 31 January 2025 show a significant amount of further borrowing is required from MBDA.

As a result of these matters there is a material uncertainty that may cast significant doubt upon the company's ability to continue as a going concern and therefore whether the company will realise its assets and settle its liabilities in the ordinary course of business at the amounts recorded in the financial statements.

In response to these matters, the entity has taken the action to approach MBDA to agree a sale of the issued share capital of the company via an option agreement. At present, MBDA have not exercised the option, however management have been given assurances by MBDA that they will exercise the option and purchase the company and provide continued funding to ensure the future existence of the company.

Although it is not certain that the option will be exercised and the future funding provided by MBDA which, management has determined that the actions it has taken are sufficient to mitigate the uncertainty and has therefore prepared the financial statements on the assumption the entity is a going concern is contingent on the continued support of MBDA.

3. Turnover

The turnover and loss (2022 - profit) before taxation are attributable to the one principal activity of the company.

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

2023 2022
£    £   
Sale of goods 5,777,433 7,593,393
5,777,433 7,593,393

CURROCK ENGINEERING COMPANY LIMITED (REGISTERED NUMBER: 00828340)

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

4. Employees and directors
2023 2022
£    £   
Wages and salaries 3,597,760 3,165,809
Social security costs 30,723 21,809
Other pension costs 129,387 141,639
3,757,870 3,329,257

The average number of employees during the year was as follows:
2023 2022

Cost of Sales 76 81
Administration and Management 5 4
81 85

2023 2022
£    £   
Directors' remuneration 242,131 102,162
Directors' pension contributions to money purchase schemes 27,708 38,001

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

Money purchase schemes 1 2

Information regarding the highest paid director for the year ended 31 October 2023 is as follows:
2023
£   
Emoluments etc 132,172

5. Operating (loss)/profit

The operating loss (2022 - operating profit) is stated after charging:

2023 2022
£    £   
Depreciation - owned assets 206,186 229,310
Depreciation - assets on hire purchase contracts 269,808 242,418
Loss on disposal of fixed assets 979,249 -
Computer software amortisation - 409,159
Auditors Remuneration 16,000 12,000

6. Interest payable and similar expenses
2023 2022
£    £   
Loan Interest 148,337 16,177
Other Interest 7,665 3,892
Hire Purchase Interest 156,277 104,685
HMRC Interest 67,278 -
379,557 124,754

CURROCK ENGINEERING COMPANY LIMITED (REGISTERED NUMBER: 00828340)

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

7. Taxation

Analysis of the tax credit
The tax credit on the loss for the year was as follows:
2023 2022
£    £   
Current tax:
UK corporation tax - (743,721 )

Deferred Taxation (652,622 ) 217,831
Tax on (loss)/profit (652,622 ) (525,890 )

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

2023 2022
£    £   
(Loss)/profit before tax (7,941,424 ) 241,684
(Loss)/profit multiplied by the standard rate of corporation tax in the
UK of 19% (2022 - 19%)

(1,508,871

)

45,920

Effects of:
Expenses not deductible for tax purposes 27,683 18,537
Utilisation of tax losses 828,566 -
Research and development enhanced expenditure claim - (590,347 )
Total tax credit (652,622 ) (525,890 )

8. Dividends
2023 2022
£    £   
Ordinary A shares of £1 each
Interim 55,301 165,400

CURROCK ENGINEERING COMPANY LIMITED (REGISTERED NUMBER: 00828340)

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

9. Intangible fixed assets
Computer
software
£   
Cost
At 1 November 2022 1,848,515
Disposals (1,848,515 )
At 31 October 2023 -
Amortisation
At 1 November 2022 894,920
Eliminated on disposal (894,920 )
At 31 October 2023 -
Net book value
At 31 October 2023 -
At 31 October 2022 953,595

10. Tangible fixed assets
Fixtures
Short Plant and and
Leasehold Machinery Fittings
£    £    £   
Cost
At 1 November 2022 80,339 9,067,285 249,145
Additions - - 19,512
Disposals - (28,644 ) (201,539 )
At 31 October 2023 80,339 9,038,641 67,118
Depreciation
At 1 November 2022 80,339 4,630,806 221,293
Charge for year - 445,856 6,963
Eliminated on disposal - (18,186 ) (194,266 )
At 31 October 2023 80,339 5,058,476 33,990
Net book value
At 31 October 2023 - 3,980,165 33,128
At 31 October 2022 - 4,436,479 27,852

CURROCK ENGINEERING COMPANY LIMITED (REGISTERED NUMBER: 00828340)

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

10. Tangible fixed assets - continued

Motor Office
Vehicles Equipment Totals
£    £    £   
Cost
At 1 November 2022 153,350 806,443 10,356,562
Additions - 954 20,466
Disposals (18,490 ) (804,917 ) (1,053,590 )
At 31 October 2023 134,860 2,480 9,323,438
Depreciation
At 1 November 2022 102,928 790,977 5,826,343
Charge for year 12,605 10,570 475,994
Eliminated on disposal (15,108 ) (800,376 ) (1,027,936 )
At 31 October 2023 100,425 1,171 5,274,401
Net book value
At 31 October 2023 34,435 1,309 4,049,037
At 31 October 2022 50,422 15,466 4,530,219

Fixed assets, included in the above, which are held under hire purchase contracts are as follows:
Plant and Motor
Machinery Vehicles Totals
£    £    £   
Cost
At 1 November 2022 4,484,199 122,480 4,606,679
Transfer to ownership - (122,480 ) (122,480 )
At 31 October 2023 4,484,199 - 4,484,199
Depreciation
At 1 November 2022 1,786,116 77,981 1,864,097
Charge for year 269,808 - 269,808
Transfer to ownership - (77,981 ) (77,981 )
At 31 October 2023 2,055,924 - 2,055,924
Net book value
At 31 October 2023 2,428,275 - 2,428,275
At 31 October 2022 2,698,083 44,499 2,742,582

11. Stocks
2023 2022
£    £   
Stocks 2,097,490 4,189,563
Work in Progress 1,911,933 2,961,052
4,009,423 7,150,615

CURROCK ENGINEERING COMPANY LIMITED (REGISTERED NUMBER: 00828340)

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

12. Debtors: amounts falling due within one year
2023 2022
£    £   
Trade Debtors 1,102,034 2,882,242
Directors Current Accounts 231,505 134,667
Tax - 743,721
Prepayments and Accrued Income 87,074 50,320
1,420,613 3,810,950

13. Creditors: amounts falling due within one year
2023 2022
£    £   
Other loans (see note 15) 2,874,126 2,512,460
Hire purchase contracts (see note 16) 581,660 562,459
Trade Creditors 1,328,002 1,130,200
Social Security and Other
Taxes 1,201,278 804,331
Other Creditors 84,237 61,171
Accruals and Deferred Income 435,464 226,971
6,504,767 5,297,592

14. Creditors: amounts falling due after more than one year
2023 2022
£    £   
Other loans (see note 15) 452,596 435,688
Hire purchase contracts (see note 16) 1,648,006 1,917,249
2,100,602 2,352,937

15. Loans

An analysis of the maturity of loans is given below:

2023 2022
£    £   
Amounts falling due within one year or on demand:
Other Loans 459,398 148,790
Invoice Discounting Advance 1,543,324 1,687,967
Trade Finance Facility 871,404 675,703
2,874,126 2,512,460

Amounts falling due between one and two years:
Other Loans - 1-2 years 174,024 156,958

Amounts falling due between two and five years:
Other Loans 278,572 278,730

CURROCK ENGINEERING COMPANY LIMITED (REGISTERED NUMBER: 00828340)

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

16. Leasing agreements

Minimum lease payments fall due as follows:

Hire purchase contracts
2023 2022
£    £   
Gross obligations repayable:
Within one year 717,361 691,527
Between one and five years 1,881,876 2,150,427
2,599,237 2,841,954

Finance charges repayable:
Within one year 135,701 129,068
Between one and five years 233,870 233,178
369,571 362,246

Net obligations repayable:
Within one year 581,660 562,459
Between one and five years 1,648,006 1,917,249
2,229,666 2,479,708

Non-cancellable operating leases
2023 2022
£    £   
Within one year 342,887 354,419
Between one and five years 84,445 427,333
427,332 781,752

17. Secured debts

The following secured debts are included within creditors:

2023 2022
£    £   
Hire purchase contracts 2,229,666 2,479,708
Invoice discounting advance 1,543,324 1,687,967
3,772,990 4,167,675

The amount due to Bibby Invoice Discounting Ltd is in respect of sales invoice discounting and is secured by way of a fixed and floating charge over the assets of the Company.

The hire purchase debt is secured against the specific fixed asset(s) financed.

18. Provisions for liabilities
2023 2022
£    £   
Deferred Taxation - 652,622

CURROCK ENGINEERING COMPANY LIMITED (REGISTERED NUMBER: 00828340)

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

18. Provisions for liabilities - continued

Deferred
tax
£   
Balance at 1 November 2022 652,622
Credit to Income Statement during year (652,622 )
Balance at 31 October 2023 -

19. Called up share capital

Allotted, issued and fully paid:
Number: Class: Nominal 2023 2022
value: £    £   
166 Ordinary A £1 166 166
34 Ordinary B £1 34 34
300,000 Ordinary C £1 300,000 300,000
300,200 300,200

20. Reserves
Retained
earnings
£   

At 1 November 2022 7,924,465
Deficit for the year (7,288,802 )
Dividends (55,301 )
At 31 October 2023 580,362

21. Directors' advances, credits and guarantees

The following advances and credits to a director subsisted during the years ended 31 October 2023 and 31 October 2022:

2023 2022
£    £   
A Murray
Balance outstanding at start of year 134,669 98,722
Amounts advanced 96,836 178,097
Amounts repaid - (142,150 )
Amounts written off - -
Amounts waived - -
Balance outstanding at end of year 231,505 134,669

22. Related party disclosures

Key management personnel of the entity or its parent (in the aggregate)
2023 2022
£    £   
Purchases 10,736 18,051
Amount due to related party - 4,466

CURROCK ENGINEERING COMPANY LIMITED (REGISTERED NUMBER: 00828340)

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

22. Related party disclosures - continued

During the year, a total of key management personnel compensation of £ 398,155 (2022 - £ 327,864 ) was paid.

23. Ultimate controlling party

The controlling party is A Murray.