REGISTERED NUMBER: |
Strategic Report, Report of the Directors and |
Financial Statements for the Year Ended 31 December 2023 |
for |
Cutting Edge Services Limited |
REGISTERED NUMBER: |
Strategic Report, Report of the Directors and |
Financial Statements for the Year Ended 31 December 2023 |
for |
Cutting Edge Services Limited |
Cutting Edge Services Limited (Registered number: 02757183) |
Contents of the Financial Statements |
for the Year Ended 31 December 2023 |
Page |
Company Information | 1 |
Strategic Report | 2 |
Report of the Directors | 3 |
Report of the Independent Auditors | 5 |
Income Statement | 8 |
Other Comprehensive Income | 9 |
Balance Sheet | 10 |
Statement of Changes in Equity | 11 |
Notes to the Financial Statements | 12 |
Cutting Edge Services Limited |
Company Information |
for the Year Ended 31 December 2023 |
DIRECTORS: |
REGISTERED OFFICE: |
REGISTERED NUMBER: |
AUDITORS: |
Chartered Accountants and Statutory Auditors |
Westminster House |
10 Westminster Road |
Macclesfield |
Cheshire |
SK10 1BX |
Cutting Edge Services Limited (Registered number: 02757183) |
Strategic Report |
for the Year Ended 31 December 2023 |
FAIR VIEW OF BUSINESS |
There was continued revenue growth in 2023 and the year closed at 3.4% above 2022. During the year a new market was opened in the US for a custom-built modified Frenching machine for the large US diner pork rib market, sales into this potentially vast market continue into 2024. |
The EOT journey continues with the appointment of an independent trustee, an employee trustee and the formation of the employee council. |
Towards the end of 2023 the company began implementing Phocas, forecasting and data analytics software as part of an ongoing program to improve the quality of information available for decision making. |
2024 has started well with budgeted outcomes achieved to date. |
PRINCIPAL RISKS AND UNCERTAINTIES |
The principal risks within the business continue to be foreign exchange movements and the capital investment decisions of large customers, high interest rates and inflationary pressures continued to impact in 2023 but there are signs these are now easing in 2024. |
The company remains exposed to currency exchange rate risk, particularly in relation to the US Dollar and Euro. This exposure is continually monitored and wherever possible, forward exchange contracts are purchased to mitigate the risk. |
DEVELOPMENT |
The directors monitor performance through the production of detailed management accounts that compare actual performance against prior year and budget. |
Key performance indicators utilised in monitoring performance are: |
- Increase in annual revenue 2023: 3.4% (2022: 5.8%) |
- Gross margin 2023: 36.2% (2021: 36.4%) |
Other performance indicators utilised in monitoring performance are: |
- Monitoring of turnover by business division daily vs target for the month |
- Daily cash collection vs target for the month |
- Break-even turnover |
- Monthly detailed service/product margin analysis vs budget and previous year |
- 13-week cash flows prepared on a weekly basis |
FUTURE PERFORMANCE |
During 2024 implementation and usage of the Phocas BI software continues to be expanded along with the derisking and upgrading of other IT systems by moving them into the cloud. A rolling program of hardware upgrades is in place and the company continues to invest in the innovative development of food processing and safety equipment. |
ON BEHALF OF THE BOARD: |
Cutting Edge Services Limited (Registered number: 02757183) |
Report of the Directors |
for the Year Ended 31 December 2023 |
The directors present their report with the financial statements of the company for the year ended 31 December 2023. |
PRINCIPAL ACTIVITIES |
The principal activities of the company in the year under review were those of the supply of capital equipment and ancillary parts to the meat, fish and food related industries, the provision of knife and blade sharpening services; and the supply of abattoir and butchery supplies; supported by a range of personal protective equipment. |
DIVIDENDS |
The total distribution of dividends for the year ended 31 December 2023 was £901,536 (2022: £1,569,474). We note that the distribution, of £901,536 (2022: £537,959), was issued to fund the payment due to Employee Ownership Trust (EOT) by the holding company Cutting Edge Investments Limited. |
DIRECTORS |
The directors who have held office during the period from 1 January 2023 to the date of this report are as follows: |
DIRECTORS' RESPONSIBILITIES STATEMENT |
The directors are responsible for preparing the Strategic Report, the Report of the Directors and the financial statements in accordance with applicable law and regulations. |
Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the company and of the profit or loss of the company for that period. In preparing these financial statements, the directors are required to: |
- | select suitable accounting policies and then apply them consistently; |
- | make judgements and accounting estimates that are reasonable and prudent; |
- | prepare the financial statements on the going concern basis unless it is inappropriate to presume that the company will continue in business. |
The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the company's transactions and disclose with reasonable accuracy at any time the financial position of the company and enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities. |
STATEMENT AS TO DISCLOSURE OF INFORMATION TO AUDITORS |
So far as the directors are aware, there is no relevant audit information (as defined by Section 418 of the Companies Act 2006) of which the company's auditors are unaware, and each director has taken all the steps that he ought to have taken as a director in order to make himself aware of any relevant audit information and to establish that the company's auditors are aware of that information. |
Cutting Edge Services Limited (Registered number: 02757183) |
Report of the Directors |
for the Year Ended 31 December 2023 |
AUDITORS |
The auditors, Harts Limited, will be proposed for re-appointment at the forthcoming Annual General Meeting. |
ON BEHALF OF THE BOARD: |
Report of the Independent Auditors to the Members of |
Cutting Edge Services Limited |
Opinion |
We have audited the financial statements of Cutting Edge Services Limited (the 'company') for the year ended 31 December 2023 which comprise the Income Statement, Other Comprehensive Income, Balance Sheet, Statement of Changes in Equity and Notes to the Financial Statements, including a summary of significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland' (United Kingdom Generally Accepted Accounting Practice). |
In our opinion the financial statements: |
- | give a true and fair view of the state of the company's affairs as at 31 December 2023 and of its profit for the year then ended; |
- | have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and |
- | have been prepared in accordance with the requirements of the Companies Act 2006. |
Basis for opinion |
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditors' responsibilities for the audit of the financial statements section of our report. We are independent of the company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC's Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. |
Conclusions relating to going concern |
In auditing the financial statements, we have concluded that the directors' use of the going concern basis of accounting in the preparation of the financial statements is appropriate. |
Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the company's ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue. |
Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report. |
Other information |
The directors are responsible for the other information. The other information comprises the information in the Strategic Report and the Report of the Directors, but does not include the financial statements and our Report of the Auditors thereon. |
Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. |
In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard. |
Opinions on other matters prescribed by the Companies Act 2006 |
In our opinion, based on the work undertaken in the course of the audit: |
- | the information given in the Strategic Report and the Report of the Directors for the financial year for which the financial statements are prepared is consistent with the financial statements; and |
- | the Strategic Report and the Report of the Directors have been prepared in accordance with applicable legal requirements. |
Report of the Independent Auditors to the Members of |
Cutting Edge Services 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 Directors' Responsibilities Statement 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. |
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: |
The objectives of our audit, in respect to 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; and to respond appropriately to fraud or suspected fraud identified during the audit. However, the primary responsibility for the prevention and detection of fraud rests with both those charged with governance of the entity and management. |
Our approach was as follows: |
We obtained an understanding of the legal and regulatory frameworks that are applicable to the Company and determined that the most significant are those that relate to the reporting framework (UK GAAP and the Companies Act 2006) and employment law. In addition the Company has to comply with laws and regulations relating to its operations and health and safety. |
We understood how Cutting Edge Services Limited is complying with those frameworks by making inquiries of management and the head of technical, and confirmation to identify any non-compliance with laws and regulations. |
We assessed the susceptibility of the Company's financial statements to material misstatement, including how fraud might occur by discussion with directors to understand where it's considered there was a susceptibility to fraud. We considered the controls that the Company has established to address risks identified, or that otherwise prevent, deter and detect fraud. |
To address the risk of fraud through management bias and override of controls, we performed analytical procedures to identify any unusual or unexpected relationships; investigated the rationale behind significant or unusual transactions; and tested journal entries to identify unusual transactions. Controls have also been considered, that the company has established to address risks identified, or that otherwise prevent, defer and detect fraud. No susceptibilities identified in these controls. |
Report of the Independent Auditors to the Members of |
Cutting Edge Services Limited |
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. |
Based on this understanding we designed our audit procedures to identify non-compliance with such laws and regulations that could materially impact the financial statements. Taking into accounts our understanding of the Company, our procedures involved enquires of management and focussed testing as appropriate with consideration to risk assessment. |
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. |
Use of our report |
This report is made solely to the company's members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the company's members those matters we are required to state to them in a Report of the Auditors and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company's members as a body, for our audit work, for this report, or for the opinions we have formed. |
for and on behalf of |
Chartered Accountants and Statutory Auditors |
Westminster House |
10 Westminster Road |
Macclesfield |
Cheshire |
SK10 1BX |
Cutting Edge Services Limited (Registered number: 02757183) |
Income Statement |
for the Year Ended 31 December 2023 |
31.12.23 | 31.12.22 |
Notes | £ | £ |
TURNOVER | 3 |
Cost of sales | ( |
) | ( |
) |
GROSS PROFIT |
Administrative expenses | ( |
) | ( |
) |
OPERATING PROFIT | 5 |
Interest payable and similar expenses | 7 | ( |
) | ( |
) |
PROFIT BEFORE TAXATION |
Tax on profit | 8 | ( |
) | ( |
) |
PROFIT FOR THE FINANCIAL YEAR |
Cutting Edge Services Limited (Registered number: 02757183) |
Other Comprehensive Income |
for the Year Ended 31 December 2023 |
31.12.23 | 31.12.22 |
Notes | £ | £ |
PROFIT FOR THE YEAR |
OTHER COMPREHENSIVE INCOME | - | - |
TOTAL COMPREHENSIVE INCOME FOR THE YEAR |
Cutting Edge Services Limited (Registered number: 02757183) |
Balance Sheet |
31 December 2023 |
31.12.23 | 31.12.22 |
Notes | £ | £ |
FIXED ASSETS |
Intangible assets | 10 |
Tangible assets | 11 |
Investments | 12 |
CURRENT ASSETS |
Stocks | 13 |
Debtors | 14 |
Cash at bank and in hand |
CREDITORS |
Amounts falling due within one year | 15 | ( |
) | ( |
) |
NET CURRENT ASSETS |
TOTAL ASSETS LESS CURRENT LIABILITIES |
CREDITORS |
Amounts falling due after more than one year | 16 | ( |
) | ( |
) |
PROVISIONS FOR LIABILITIES | 19 | ( |
) | ( |
) |
NET ASSETS |
CAPITAL AND RESERVES |
Called up share capital | 20 |
Retained earnings | 21 |
SHAREHOLDERS' FUNDS |
The financial statements were approved by the Board of Directors and authorised for issue on |
Cutting Edge Services Limited (Registered number: 02757183) |
Statement of Changes in Equity |
for the Year Ended 31 December 2023 |
Called up |
share | Retained | Total |
capital | earnings | equity |
£ | £ | £ |
Balance at 1 January 2022 |
Changes in equity |
Dividend-contribution to EOT | - | (537,959 | ) | (537,959 | ) |
Dividends | - | ( |
) | ( |
) |
Total comprehensive income | - |
Balance at 31 December 2022 |
Changes in equity |
Dividend-contribution to EOT | - | (901,536 | ) | (901,536 | ) |
Total comprehensive income | - |
Balance at 31 December 2023 |
Cutting Edge Services Limited (Registered number: 02757183) |
Notes to the Financial Statements |
for the Year Ended 31 December 2023 |
1. | STATUTORY INFORMATION |
Cutting Edge Services Limited is a |
2. | ACCOUNTING POLICIES |
Basis of preparing the financial statements |
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 of the company are consolidated in the financial statements of Cutting Edge Investments Limited. These consolidated financial statements are available from its registered office, Unit 8 Matrix Park, Western Avenue, Buckshaw Village, Chorley, PR7 7NB. |
Financial Reporting Standard 102 - reduced disclosure exemptions |
The company has taken advantage of the following disclosure exemptions in preparing these financial statements, as permitted by FRS 102 "The Financial Reporting Standard applicable in the UK and Republic of Ireland": |
• | the requirements of Section 7 Statement of Cash Flows; |
• | the requirement of paragraph 33.7. |
Turnover |
Sale of goods |
Turnover is recognised at the fair value of the consideration received or receivable, excluding trade discounts, settlement discounts and volume rebates, for sale of goods and is shown net of VAT and other sales related taxes. |
Turnover 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. |
Rendering of services |
Revenue from the services, provided in the normal course of business, is recognised when the outcome of a transaction can be estimated reliably and turnover from services is recognised by reference to the stage of completion at the balance sheet date. Stage of completion is measured by reference to finalisation of work completed. |
Where the outcome cannot be measured reliably, turnover is recognised only to the extent of the expenses recognised that are recoverable. |
Goodwill |
Goodwill represents the excess of the cost of acquisition of unincorporated businesses over the fair value of net assets acquired. It is initially recognised as an asset at cost and is subsequently measured at cost less accumulated amortisation and accumulated impairment losses. |
For the purposes of impairment testing, goodwill is allocated to the cash-generating units expected to benefit from the acquisition. Cash-generating units to which goodwill has been allocated are tested for impairment at least annually, or more frequently when there is an indication that the unit may be impaired. If the recoverable amount of the cash-generating unit is less than the carrying amount of the unit, the impairment loss is allocated first to reduce the carrying amount of any goodwill allocated to the unit and then to the other assets of the unit pro-rata on the basis of the carrying amount of each asset in the unit. |
Cutting Edge Services Limited (Registered number: 02757183) |
Notes to the Financial Statements - continued |
for the Year Ended 31 December 2023 |
2. | ACCOUNTING POLICIES - continued |
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. |
Intangible assets acquired separately from a business are recognised at cost and are subsequently measured at cost less accumulated amortisation and accumulated impairment losses. |
Intangible assets acquired on business combinations are recognised separately from goodwill at the acquisition date where it is probable that the expected future economic benefits that are attributable to the asset will flow to the entity and the fair value of the asset can be measured reliably; the intangible asset arises from contractual or other legal rights; and the intangible asset is separable from the entity. |
Tangible fixed assets |
Improvements to property | - |
Plant and machinery | - |
Fixtures and fittings | - |
Motor vehicles | - |
Computer equipment | - |
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. |
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. |
Investments in subsidiaries |
Investments in subsidiary undertakings are recognised at cost. |
Interests in subsidiaries 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. |
Cutting Edge Services Limited (Registered number: 02757183) |
Notes to the Financial Statements - continued |
for the Year Ended 31 December 2023 |
2. | ACCOUNTING POLICIES - continued |
Stocks |
Stocks are stated at the lower of cost and estimated selling price less costs to complete and sell. Cost comprises direct materials and, where applicable, direct labour costs and those overheads that have been incurred in bringing the stocks to their present location and condition. |
Cost is calculated using the first-in first out method and includes the normal cost of transporting stock to its present location and condition. |
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. |
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. |
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. |
Cutting Edge Services Limited (Registered number: 02757183) |
Notes to the Financial Statements - continued |
for the Year Ended 31 December 2023 |
2. | ACCOUNTING POLICIES - continued |
Derecognition of financial assets |
Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire or are settled, or when the company transfers the financial asset and substantially all the risks and rewards of ownership to another entity, or if some significant risks and rewards of ownership are retained but control of the asset has transferred to another party that is able to sell the asset in its entirety to an unrelated third party. |
Classification of financial liabilities |
Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the company after deducting all of its liabilities. |
Basic financial liabilities |
Basic financial liabilities, including creditors, bank loans and loans from fellow group companies 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. |
Derecognition of financial liabilities |
Financial liabilities are derecognised when the company’s contractual obligations expire or are discharged or cancelled. |
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. |
Cutting Edge Services Limited (Registered number: 02757183) |
Notes to the Financial Statements - continued |
for the Year Ended 31 December 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. |
Foreign currencies |
Assets and liabilities in foreign currencies are translated into sterling at the rates of exchange ruling at the balance sheet date. Transactions in foreign currencies are translated into sterling at the rate of exchange ruling at the date of transaction. Exchange differences are taken into account in arriving at the operating result. |
Hire purchase and leasing commitments |
Assets obtained under hire purchase contracts or finance leases are capitalised in the balance sheet. Those held under hire purchase contracts are depreciated over their estimated useful lives. Those held under finance leases are depreciated over their estimated useful lives or the lease term, whichever is the shorter. |
The interest element of these obligations is charged to profit or loss over the relevant period. The capital element of the future payments is treated as a liability. |
Rentals paid under operating leases are charged to profit or loss on a straight line basis over the period of the lease. |
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. |
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. |
Cutting Edge Services Limited (Registered number: 02757183) |
Notes to the Financial Statements - continued |
for the Year Ended 31 December 2023 |
2. | ACCOUNTING POLICIES - continued |
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: |
Stocks |
A provision in the amount of £500,725 (2022: £500,721) for old and obsolete stock has been estimated by the directors to ensure that the stock is correctly stated at the lower of cost and new realisable value. |
3. | TURNOVER |
The turnover and profit before taxation are attributable to the principal activities of the company. |
An analysis of turnover by class of business is given below: |
31.12.23 | 31.12.22 |
£ | £ |
An analysis of turnover by geographical market is given below: |
31.12.23 | 31.12.22 |
£ | £ |
United Kingdom |
Europe |
Rest of world | 199,406 | 8,925 |
4. | EMPLOYEES AND DIRECTORS |
31.12.23 | 31.12.22 |
£ | £ |
Wages and salaries |
Social security costs |
Other pension costs |
Cutting Edge Services Limited (Registered number: 02757183) |
Notes to the Financial Statements - continued |
for the Year Ended 31 December 2023 |
4. | EMPLOYEES AND DIRECTORS - continued |
The average number of employees during the year was as follows: |
31.12.23 | 31.12.22 |
Production staff | 22 | 22 |
Sales & Distribution staff | 36 | 39 |
Administration staff | 17 | 21 |
31.12.23 | 31.12.22 |
£ | £ |
Directors' remuneration |
No remuneration was paid to the directors last year. |
5. | OPERATING PROFIT |
The operating profit is stated after charging/(crediting): |
31.12.23 | 31.12.22 |
£ | £ |
Hire of plant and machinery |
Other operating leases |
Depreciation - owned assets |
Depreciation - assets on hire purchase contracts |
Profit on disposal of fixed assets | ( |
) |
Goodwill amortisation |
Computer software amortisation |
Foreign exchange differences | ( |
) | ( |
) |
6. | AUDITORS' REMUNERATION |
31.12.23 | 31.12.22 |
£ | £ |
Fees payable to the company's auditors for the audit of the company's financial statements |
16,200 |
14,000 |
7. | INTEREST PAYABLE AND SIMILAR EXPENSES |
31.12.23 | 31.12.22 |
£ | £ |
Bank loan interest |
Other Interest |
Hire purchase interest expense |
Cutting Edge Services Limited (Registered number: 02757183) |
Notes to the Financial Statements - continued |
for the Year Ended 31 December 2023 |
8. | TAXATION |
Analysis of the tax charge |
The tax charge on the profit for the year was as follows: |
31.12.23 | 31.12.22 |
£ | £ |
Current tax: |
UK corporation tax |
(Over) Under provision in prior year | (44,868 | ) | (18,322 | ) |
Total current tax |
Deferred tax | ( |
) | ( |
) |
Tax on profit |
Reconciliation of total tax charge included in profit and loss |
The tax assessed for the year is lower than the standard rate of corporation tax in the UK. The difference is explained below: |
31.12.23 | 31.12.22 |
£ | £ |
Profit before tax |
Profit multiplied by the standard rate of corporation tax in the UK of |
Effects of: |
Expenses not deductible for tax purposes | ( |
) |
Adjustments to tax charge in respect of previous periods | ( |
) | ( |
) |
Group relief | (3,036 | ) | (860 | ) |
Rate change on current year deferred tax | (557 | ) | (4,458 | ) |
Total tax charge | 254,880 | 141,595 |
9. | DIVIDENDS |
31.12.23 | 31.12.22 |
£ | £ |
Interim |
The above dividends did not include the distribution that was issued to fund the payment due to employee ownership trust (EOT) by the holding company, Cutting Edge Investments Limited, amounting to £901,536 (2022: £537,959) as disclosed in the statement of changes in equity section. |
Cutting Edge Services Limited (Registered number: 02757183) |
Notes to the Financial Statements - continued |
for the Year Ended 31 December 2023 |
10. | INTANGIBLE FIXED ASSETS |
Development | Computer |
Goodwill | costs | software | Totals |
£ | £ | £ | £ |
COST |
At 1 January 2023 |
Reclassification/transfer |
At 31 December 2023 |
AMORTISATION |
At 1 January 2023 |
Amortisation for year |
Reclassification/transfer |
At 31 December 2023 |
NET BOOK VALUE |
At 31 December 2023 |
At 31 December 2022 |
11. | TANGIBLE FIXED ASSETS |
Improvements | Fixtures |
to | Plant and | and |
property | machinery | fittings |
£ | £ | £ |
COST |
At 1 January 2023 |
Additions |
Reclassification/transfer | ( |
) |
At 31 December 2023 |
DEPRECIATION |
At 1 January 2023 |
Charge for year |
Reclassification/transfer |
At 31 December 2023 |
NET BOOK VALUE |
At 31 December 2023 |
At 31 December 2022 |
Cutting Edge Services Limited (Registered number: 02757183) |
Notes to the Financial Statements - continued |
for the Year Ended 31 December 2023 |
11. | TANGIBLE FIXED ASSETS - continued |
Motor | Computer |
vehicles | equipment | Totals |
£ | £ | £ |
COST |
At 1 January 2023 |
Additions |
Reclassification/transfer | ( |
) |
At 31 December 2023 |
DEPRECIATION |
At 1 January 2023 |
Charge for year |
Reclassification/transfer |
At 31 December 2023 |
NET BOOK VALUE |
At 31 December 2023 |
At 31 December 2022 |
Fixed assets, included in the above, which are held under hire purchase contracts are as follows: |
Motor |
vehicles |
£ |
COST |
Additions |
At 31 December 2023 |
DEPRECIATION |
Charge for year |
At 31 December 2023 |
NET BOOK VALUE |
At 31 December 2023 |
Cutting Edge Services Limited (Registered number: 02757183) |
Notes to the Financial Statements - continued |
for the Year Ended 31 December 2023 |
12. | FIXED ASSET INVESTMENTS |
Shares in |
group |
undertakings |
£ |
COST |
At 1 January 2023 |
and 31 December 2023 |
NET BOOK VALUE |
At 31 December 2023 |
At 31 December 2022 |
The company's investments at the Balance Sheet date in the share capital of companies include the following: |
Registered office: Unit 8, Matrix Park Western, Avenue, Buckshaw Village, Chorley, PR7 7NB |
Nature of business: |
% |
Class of shares: | holding |
£ | £ |
Aggregate capital and reserves |
At the balance sheet and auditors' report date, the company was dormant, but the intention of the management was to place B.R.B Industrial Services Limited into liquidation as soon as business affairs of the company were wound up. |
13. | STOCKS |
31.12.23 | 31.12.22 |
£ | £ |
Finished goods |
14. | DEBTORS: AMOUNTS FALLING DUE WITHIN ONE YEAR |
31.12.23 | 31.12.22 |
£ | £ |
Trade debtors |
Other debtors |
Prepayments and accrued income |
Cutting Edge Services Limited (Registered number: 02757183) |
Notes to the Financial Statements - continued |
for the Year Ended 31 December 2023 |
15. | CREDITORS: AMOUNTS FALLING DUE WITHIN ONE YEAR |
31.12.23 | 31.12.22 |
£ | £ |
Bank loans and overdrafts (see note 17) |
Hire purchase contracts (see note 18) |
Trade creditors |
Amounts owed to group undertakings |
Corporation tax |
Social security and other taxes |
VAT | 496,525 | 495,137 |
Other creditors |
Accruals and deferred income |
16. | CREDITORS: AMOUNTS FALLING DUE AFTER MORE THAN ONE YEAR |
31.12.23 | 31.12.22 |
£ | £ |
Bank loans (see note 17) |
Hire purchase contracts (see note 18) |
17. | LOANS |
An analysis of the maturity of loans is given below: |
31.12.23 | 31.12.22 |
£ | £ |
Amounts falling due within one year or on demand: |
Bank loan |
Amounts falling due between one and two years: |
Bank loans - 1-2 years |
Amounts falling due between two and five years: |
Bank loan |
The bank loans and overdraft are secured by a debenture over the assets of the company. |
The amounts advanced under invoice discounting are secured by a charge over the book debts of the company. |
Cutting Edge Services Limited (Registered number: 02757183) |
Notes to the Financial Statements - continued |
for the Year Ended 31 December 2023 |
18. | LEASING AGREEMENTS |
Minimum lease payments fall due as follows: |
Hire purchase contracts |
31.12.23 | 31.12.22 |
£ | £ |
Net obligations repayable: |
Within one year |
Between one and five years |
Non-cancellable operating | leases |
31.12.23 | 31.12.22 |
£ | £ |
Within one year |
Between one and five years |
In more than five years |
Lease payments recognised as an expense during the year was £308,423 (2022: £261,561). |
The hire purchase creditor represents motor vehicle acquired under finance lease arrangements. Interest is payable as part of the monthly repayments at variable rate. The company has the option to acquire this asset at the end of lease term and intends to exercise this option. |
19. | PROVISIONS FOR LIABILITIES |
31.12.23 | 31.12.22 |
£ | £ |
Deferred tax | 34,502 | 43,831 |
Deferred |
tax |
£ |
Balance at 1 January 2023 |
Credit to Income Statement during year | ( |
) |
Balance at 31 December 2023 |
20. | CALLED UP SHARE CAPITAL |
Allotted, issued and fully paid: |
Number: | Class: | Nominal | 31.12.23 | 31.12.22 |
value: | £ | £ |
Ordinary | 1 | 100 | 100 |
The ordinary shares have full voting and distribution rights. |
Cutting Edge Services Limited (Registered number: 02757183) |
Notes to the Financial Statements - continued |
for the Year Ended 31 December 2023 |
21. | RESERVES |
Retained |
earnings |
£ |
At 1 January 2023 |
Profit for the year |
Dividend-contribution to EOT | (901,536 | ) |
At 31 December 2023 |
22. | ULTIMATE PARENT COMPANY |
Cutting Edge Investments Limited is regarded by the directors as being the company's ultimate parent company. |
Cutting Edge Investments Limited is wholly owned by The Cutting Edge Employee Ownership Trust. As such there is no ultimate controlling party. |
(Cutting Edge Employee Trustee Limited is the legal but not beneficial owner of the shares. It exists solely so that the trustees of the EOT can minimise their risk of personal exposure to being sued in that role). |
The consolidated financial statements are available from the Companies House website at www.gov.uk/get-information-about-a-company and search for the following Company number 03357439. |
23. | FINANCIAL COMMITMENTS, GUARANTEES AND CONTINGENT LIABILITIES |
The Company has a cross guarantee with Cutting Edge Investments Limited, supported by a debenture in respect of the bank and other borrowings. At 31 December 2023 borrowings amount to £1,188,107 (2022: £2,098,481). |
A fixed and floating charge over all assets is in place between the company and D T Mook, the ex-director. The charge is in place to cover a loan that has been made by D T Mook to the Cutting Edge Employee Ownership Trust for £7,250,000 (Present value: £5,035,981). |
24. | RELATED PARTY DISCLOSURES |
During the year, the company rented premises from Mr D T Mook for £184,335 (2022: £177,690). |
During the year, management charges of £410,000 (2022: £840,000) were charged from DHM (Holdings) Limited, a company controlled by one of the former directors. The management charges included a fee for the directors' services for some of the directors that were in office during the year, as well as a contribution to the head office overheads of DHM (Holdings) Limited. |
The debtor balance at the year end with DHM (Holdings) Limited was £17,208 (2022: £12,669). |