Company registration number 04578644 (England and Wales)
ACL (2002) LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 MARCH 2023
ACL (2002) LIMITED
COMPANY INFORMATION
Directors
Mr R Bennett
Mr C R Watts
Secretary
Mr C R Watts
Company number
04578644
Registered office
91 Birmingham Road
West Bromwich
West Midlands
B70 6PX
Auditor
Fields Business Advisors Limited
91 Birmingham Road
West Bromwich
West Midlands
B70 6PX
Business address
Block 15
Narrowboat Way
Blackbrook Business Park
Dudley
West Midlands
DY2 0XQ
ACL (2002) LIMITED
CONTENTS
Page
Strategic report
1 - 2
Directors' report
3 - 4
Independent auditor's report
5 - 6
Profit and loss account
7
Statement of comprehensive income
8
Balance sheet
9
Statement of changes in equity
10
Statement of cash flows
11
Notes to the financial statements
12 - 24
ACL (2002) LIMITED
STRATEGIC REPORT
FOR THE PERIOD ENDED 31 MARCH 2023
- 1 -
The directors present the strategic report for the Period ended 31 March 2023.
Review of the business
During the financial year ended 31st March 2023 turnover decreased by 12% to £12 million.
The operating profit of the company has decreased from £175K to an operating loss of £355K. The decrease is as a result of the increase in the cost of raw materials and utilities. The board believes that the company is well positioned to continue to deliver significant operating profits and positive cash flows in the future.
Further exchange rate fluctuations together with the potential deterioration of the UK economy has had an adverse effect on commodity prices. However the directors anticipate the business environment will remain competitive. They believe that the company is in a good financial position and they remain confident that the company will continue to grow.
Principal risks and uncertainties
The company faces a number of business risks and uncertainties which, if they materialise, could effect its profitability, financial position or impact on it in other ways. The directors believe that the key business risks are in respect of competition from both UK and international businesses and in ensuring product development and availability. In view of these risks and uncertainties, the directors are aware that the development of the company may be affected by factors outside their control.
The principal risks and uncertainties identified by the Board are detailed below.
Customer Profile
The majority of the company's output is sold to a single retailer with outlets throughout Great Britain. In view of this, the directors are looking carefully at both existing and potential new markets.
The fact that the majority of the company's income comes from a single source contains obvious risks, but the board is of the opinion that the advantages of a major national presence for the company's products, backed up by extensive advertising and by the efficiency of the supply and service routes that have been developed with the customer, offset those risks.
The Board manage the above risks by ensuring that we remain sensitive to the needs of our major customer in terms of product design and development. The Board also monitors the situation in the market generally to ensure that if an alternative strategy is required in the future then the company can implement a change to their existing profile with the minimum of disruption.
Following a notice period given in April 2024, by the major customer, to advise it was reducing its orders, all custom was ceased 27th June 2024.
A new sales force is now in place to secure sales to new retailers and contracts are being sought continuously for retail sales to online and in store retailers.
Continuity of Supplies
It is important to the company that it has reliable sources of materials of the required quality at competitive prices.
The company manages the risk of not being able to achieve the above objectives by identifying and building relationships, over a number of years, with a small number of reliable suppliers from whom it buys the majority of its raw materials. The company also sources materials from new suppliers in a more limited capacity. This allows the Board to build new relationships, gauge reliability and utilise alternative sourcing if required. Supplies continue to be sourced from the UK, Spain, Italy, China, Turkey and the USA.
Credit Risk
It is important to the company that it has access to adequate sources of funds or credit to enable it to carry out its operations.
There continues to be an industry-wide shortage of credit. The Board's strategy of negotiating uninsured credit terms with customers and suppliers has been successful and continues to be used. The Board also reviews generally for other possible sources or methods that can be combined with, or replace it, and some insured credit has now been obtained.
ACL (2002) LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE PERIOD ENDED 31 MARCH 2023
- 2 -
Key performance indicators
The directors consider the company's turnover (see statement of comprehensive income on page 8 for details) and gross profit margin to be the key performance indicators which they use to manage the business.
Other information and explanations
FINANCIAL INSTRUMENTS
The company has a normal level of exposure to price, credit, liquidity, cash flow risks and foreign currency exchange differences arising from trading activities which are conducted in sterling and other currencies. The company does not enter into any hedging transactions.
RESEARCH AND DEVELOPMENT
The company will continue its policy of investment in developing new products and maintaining an attractive, saleable and profitable product range in order to retain a competitive position in the market. It is still exploring and investing in new markets of motion furniture.
Mr C R Watts
Director
12 August 2024
ACL (2002) LIMITED
DIRECTORS' REPORT
FOR THE PERIOD ENDED 31 MARCH 2023
- 3 -
The directors present their annual report and financial statements for the Period ended 31 March 2023.
Principal activities
The principal activity of the company continued to be that of the manufacture of upholstered furniture.
Results and dividends
The results and state of affairs of the company for the year are set out in the financial statements on pages 8 to 24. The loss for the financial year was £394,727 to be taken to reserves.
No ordinary dividends were paid. The directors do not recommend payment of a final dividend.
Directors
The directors who held office during the Period and up to the date of signature of the financial statements were as follows:
Mr R Bennett
Mr C R Watts
GOING CONCERN
The directors have considered the financial position of the company which shows healthy reserves and cash balances. They have not identified any material uncertainties that may cast significant doubt over the ability of the company to continue as a going concern for the foreseeable future, which is deemed to be at least 12 months from the date of signing these accounts. . Despite a loss of the major customer in June 2024 the directors are committed to support the business financially during this transition to the new contracts with other various retailers (both online and digital retailing). In forming their opinion, they have considered current and anticipated turnover, profit and cashflows. Going concern is presumed in preparing these financial statements.
Statement of directors' responsibilities
The directors are responsible for preparing the annual report and the financial statements in accordance with applicable law and regulations.
Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the company and of the profit or loss of the company for that period. In preparing these financial statements, the directors are required to:
select suitable accounting policies and then apply them consistently;
make judgements and accounting estimates that are reasonable and prudent;
prepare the financial statements on the going concern basis unless it is inappropriate to presume that the company will continue in business.
The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the company’s transactions and disclose with reasonable accuracy at any time the financial position of the company and enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
Strategic report
The company has chosen in accordance with Companies Act 2006, s. 414C(11) to set out in the company's strategic report information required by Large and Medium-sized Companies and Groups (Accounts and Reports) Regulations 2008, Sch. 7 to be contained in the directors' report. It has done so in respect of future developments, research & development and financial instruments.
ACL (2002) LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE PERIOD ENDED 31 MARCH 2023
- 4 -
Statement of disclosure to auditor
So far as each person who was a director at the date of approving this report is aware, there is no relevant audit information of which the company’s auditor is unaware. Additionally, the directors individually have taken all the necessary steps that they ought to have taken as directors in order to make themselves aware of all relevant audit information and to establish that the company’s auditor is aware of that information.
Medium-sized companies exemption
This report has been prepared in accordance with the provisions applicable to companies entitled to the medium-sized companies exemption.
On behalf of the board
Mr C R Watts
Director
12 August 2024
ACL (2002) LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF ACL (2002) LIMITED
- 5 -
Opinion
We have audited the financial statements of ACL (2002) Limited (the 'company') for the Period ended 31 March 2023 which comprise the profit and loss account, the statement of comprehensive income, the balance sheet, the statement of changes in equity, the statement of cash flows and notes to the financial statements, including significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice).
In our opinion the financial statements:
give a true and fair view of the state of the company's affairs as at 31 March 2023 and of its loss for the Period 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 Period 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.
ACL (2002) LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF ACL (2002) LIMITED (CONTINUED)
- 6 -
Matters on which we are required to report by exception
In the light of the knowledge and understanding of the company and its environment obtained in the course of the audit, we have not identified material misstatements in the strategic report or the directors' report.
We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to report to you if, in our opinion:
adequate accounting records have not been kept, or returns adequate for our audit have not been received from branches not visited by us; or
the financial statements are not in agreement with the accounting records and returns; or
certain disclosures of remuneration specified by law are not made; or
we have not received all the information and explanations we require for our audit.
Responsibilities of directors
As explained more fully in the directors' responsibilities statement, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. In preparing the financial statements, the directors are responsible for assessing the company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the company or to cease operations, or have no realistic alternative but to do so.
Auditor's responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.
The extent to which our procedures are capable of detecting irregularities, including fraud, is detailed below.
The auditor’s explanation of its audit response will depend on the risks identified but may include:
- Enquiry of management, those charged with governance and the entity’s solicitors (or in-house legal team) around actual and potential litigation and claims.
- Enquiry of entity staff in tax and compliance functions to identify any instances of non-compliance with laws and regulations.
- Reviewing minutes of meetings of those charged with governance.
- Reviewing internal audit reports.
- Reviewing financial statement disclosures and testing to supporting documentation to assess compliance with applicable laws and regulations.
- Auditing the risk of management override of controls, including through testing journal entries and other adjustments for appropriateness, and evaluating the business rationale of significant transactions outside the normal course of business.
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.
Mrs Stella Louise Broomhall FCCA
Senior Statutory Auditor
For and on behalf of Fields Business Advisors Limited
12 August 2024
Chartered Certified Accountant
Statutory Auditor
91 Birmingham Road
West Bromwich
West Midlands
B70 6PX
ACL (2002) LIMITED
PROFIT AND LOSS ACCOUNT
FOR THE PERIOD ENDED 31 MARCH 2023
- 7 -
Period
Year
ended
ended
31st March
1 April
2023
2022
Notes
£
£
Turnover
12,388,172
14,003,669
Cost of sales
(10,219,077)
(11,159,492)
Gross profit
2,169,095
2,844,177
Distribution costs
(690,592)
(705,296)
Administrative expenses
(1,845,098)
(2,025,397)
Other operating income
11,667
61,616
Operating (loss)/profit
3
(354,928)
175,100
Interest payable and similar expenses
6
(72,770)
(47,053)
(Loss)/profit before taxation
(427,698)
128,047
Tax on (loss)/profit
7
32,970
(33,825)
(Loss)/profit for the financial Period
(394,728)
94,222
The profit and loss account has been prepared on the basis that all operations are continuing operations.
ACL (2002) LIMITED
STATEMENT OF COMPREHENSIVE INCOME
FOR THE PERIOD ENDED 31 MARCH 2023
- 8 -
Period
Year
ended
ended
31st March
1 April
2023
2022
£
£
(Loss)/profit for the Period
(394,728)
94,222
Other comprehensive income
-
-
Total comprehensive income for the Period
(394,728)
94,222
ACL (2002) LIMITED
BALANCE SHEET
AS AT 31 MARCH 2023
31 March 2023
- 9 -
31st March 2023
1 April 2022
Notes
£
£
£
£
Fixed assets
Tangible assets
8
1,587,629
1,611,995
Current assets
Stocks
9
347,112
409,901
Debtors
10
6,349,572
6,866,039
Cash at bank and in hand
56,080
511,174
6,752,764
7,787,114
Creditors: amounts falling due within one year
11
(4,554,936)
(5,102,493)
Net current assets
2,197,828
2,684,621
Total assets less current liabilities
3,785,457
4,296,616
Creditors: amounts falling due after more than one year
12
(218,750)
(343,750)
Provisions for liabilities
Provisions
14
257,456
248,000
Deferred tax liability
15
3,397
4,284
(260,853)
(252,284)
Net assets
3,305,854
3,700,582
Capital and reserves
Called up share capital
17
4,998
4,998
Profit and loss reserves
3,300,856
3,695,584
Total equity
3,305,854
3,700,582
These financial statements have been prepared in accordance with the provisions relating to medium-sized companies.
The financial statements were approved by the board of directors and authorised for issue on 12 August 2024 and are signed on its behalf by:
Mr C R Watts
Director
Company registration number 04578644 (England and Wales)
ACL (2002) LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE PERIOD ENDED 31 MARCH 2023
- 10 -
Share capital
Profit and loss reserves
Total
£
£
£
Balance at 3 April 2021
4,998
3,601,362
3,606,360
Year ended 1 April 2022:
Profit and total comprehensive income
-
94,222
94,222
Balance at 1 April 2022
4,998
3,695,584
3,700,582
Period ended 31 March 2023:
Loss and total comprehensive income
-
(394,728)
(394,728)
Balance at 31 March 2023
4,998
3,300,856
3,305,854
ACL (2002) LIMITED
STATEMENT OF CASH FLOWS
FOR THE PERIOD ENDED 31 MARCH 2023
- 11 -
2023
2022
Notes
£
£
£
£
Cash flows from operating activities
Cash absorbed by operations
20
(164,806)
(1,545,667)
Interest paid
(72,770)
(47,053)
Income taxes refunded/(paid)
11,101
(68,922)
Net cash outflow from operating activities
(226,475)
(1,661,642)
Investing activities
Purchase of tangible fixed assets
(7,838)
(18,848)
Net cash used in investing activities
(7,838)
(18,848)
Financing activities
Repayment of bank loans
(179,598)
334,680
Amount withdrawn by directors
(41,183)
4,721
Net cash (used in)/generated from financing activities
(220,781)
339,401
Net decrease in cash and cash equivalents
(455,094)
(1,341,089)
Cash and cash equivalents at beginning of Period
511,174
1,852,263
Cash and cash equivalents at end of Period
56,080
511,174
ACL (2002) LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 MARCH 2023
- 12 -
1
Accounting policies
Company information
ACL (2002) Limited is a private company limited by shares incorporated in England and Wales. The registered office is Block 15, Narrowboat Way, Blackbrook Business Park, Dudley, West Midlands, DY2 0XQ.
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 £1.
The financial statements have been prepared under the historical cost convention. The principal accounting policies adopted are set out below.
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 the amount derived from the sale of goods and services falling within the company's ordinary activities, excluding value added tax and is reduced for estimated customer returns and trade discounts.
Revenue from the sale of goods is recognised when the significant risks and rewards of ownership of the goods have passed to the buyer (usually on dispatch of the goods), the amount of revenue can be measured reliably, it is probable that the economic benefits associated with the transaction will flow to the entity and the costs incurred or to be incurred in respect of the transaction can be measured reliably.
1.4
Tangible fixed assets
Tangible fixed assets are initially measured at cost and subsequently measured at cost or valuation, net of depreciation and any impairment losses.
Depreciation is recognised so as to write off the cost or valuation of assets less their residual values over their useful lives on the following bases:
Freehold land and buildings
2% on cost
Improvements to property
10% on cost
Plant and equipment
20% on cost
Fixtures and fittings
15% on reducing balance
Computers
33% on cost
Motor vehicles
20% on reducing balance
The gain or loss arising on the disposal of an asset is determined as the difference between the sale proceeds and the carrying value of the asset, and is credited or charged to profit or loss.
Freehold land is not depreciated.
ACL (2002) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 31 MARCH 2023
1
Accounting policies
(Continued)
- 13 -
1.5
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.
Stocks held for distribution at no or nominal consideration are measured at the lower of cost and replacement 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.
1.6
Cash and cash equivalents
Cash and cash equivalents are basic financial assets and include cash in hand, deposits held at call with banks, other short-term liquid investments with original maturities of three months or less, and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities.
1.7
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.
ACL (2002) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 31 MARCH 2023
1
Accounting policies
(Continued)
- 14 -
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.
ACL (2002) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 31 MARCH 2023
1
Accounting policies
(Continued)
- 15 -
Derecognition of financial liabilities
Financial liabilities are derecognised when the company’s contractual obligations expire or are discharged or cancelled.
1.8
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 liabilities are generally recognised for all timing differences and deferred tax assets are recognised to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits. Such assets and liabilities are not recognised if the timing difference arises from goodwill or from the initial recognition of other assets and liabilities in a transaction that affects neither the tax profit nor the accounting profit.
The carrying amount of deferred tax assets is reviewed at each reporting end date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realised. Deferred tax is charged or credited in the profit and loss account, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity. Deferred tax assets and liabilities are offset when the company has a legally enforceable right to offset current tax assets and liabilities and the deferred tax assets and liabilities relate to taxes levied by the same tax authority.
1.9
Provisions
Provisions are recognised when the company has a legal or constructive present obligation as a result of a past event, it is probable that the company will be required to settle that obligation and a reliable estimate can be made of the amount of the obligation.
The amount recognised as a provision is the best estimate of the consideration required to settle the present obligation at the reporting end date, taking into account the risks and uncertainties surrounding the obligation. Where the effect of the time value of money is material, the amount expected to be required to settle the obligation is recognised at present value. When a provision is measured at present value, the unwinding of the discount is recognised as a finance cost in profit or loss in the period in which it arises.
1.10
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.
1.11
Retirement benefits
Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.
ACL (2002) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 31 MARCH 2023
1
Accounting policies
(Continued)
- 16 -
1.12
Government grants
Government grants are recognised at the fair value of the asset received or receivable when there is reasonable assurance that the grant conditions will be met and the grants will be received.
A grant that specifies performance conditions is recognised in income when the performance conditions are met. Where a grant does not specify performance conditions it is recognised in income when the proceeds are received or receivable. A grant received before the recognition criteria are satisfied is recognised as a liability.
1.13
Foreign exchange
Assets and liabilities of the company, denominated in foreign currencies that are in existence at the balance sheet date are translated into sterling at the rates of exchange ruling at that date. Transactions in foreign currencies are translated into sterling at standard exchange rates that are reviewed during the year and amended as necessary in order to reflect actual exchange rates. Monetary items denominated in other currencies are translated at the rate prevailing at the end of the reporting period. Exchange differences are taken into account in arriving at the operating result.
.
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.
3
Operating (loss)/profit
2023
2022
Operating (loss)/profit for the period is stated after charging/(crediting):
£
£
Exchange losses
569
Government grants
(11,667)
(61,616)
Fees payable to the company's auditor for the audit of the company's financial statements
29,000
29,000
Depreciation of owned tangible fixed assets
31,629
32,376
Loss on disposal of tangible fixed assets
575
-
ACL (2002) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 31 MARCH 2023
- 17 -
4
Employees
The average monthly number of persons (including directors) employed by the company during the Period was:
2023
2022
Number
Number
Direct
63
67
Indirect
34
40
Office
5
6
Management
2
2
Total
104
115
Their aggregate remuneration comprised:
2023
2022
£
£
Wages and salaries
2,929,134
3,143,419
Social security costs
263,217
295,014
Pension costs
78,017
89,091
3,270,368
3,527,524
5
Directors' remuneration
2023
2022
£
£
Remuneration for qualifying services
113,120
111,952
Company pension contributions to defined contribution schemes
288
288
113,408
112,240
The number of directors for whom retirement benefits are accruing under defined contribution schemes amounted to 2 (2022 - 2).
ACL (2002) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 31 MARCH 2023
- 18 -
6
Interest payable and similar expenses
2023
2022
£
£
Interest on financial liabilities measured at amortised cost:
Interest on bank overdrafts and loans
31,480
23,504
Other interest on financial liabilities
38,817
23,549
70,297
47,053
Other finance costs:
Other interest
2,473
72,770
47,053
7
Taxation
2023
2022
£
£
Current tax
UK corporation tax on profits for the current period
32,589
Adjustments in respect of prior periods
(32,083)
93
Total current tax
(32,083)
32,682
Deferred tax
Origination and reversal of timing differences
(887)
1,143
Total tax (credit)/charge
(32,970)
33,825
The actual (credit)/charge for the Period can be reconciled to the expected (credit)/charge for the Period based on the profit or loss and the standard rate of tax as follows:
2023
2022
£
£
(Loss)/profit before taxation
(427,698)
128,047
Expected tax (credit)/charge based on the standard rate of corporation tax in the UK of 19.00% (2022: 19.00%)
(81,263)
24,329
Tax effect of expenses that are not deductible in determining taxable profit
14,649
5,603
Gains not taxable
410
Tax effect of utilisation of tax losses not previously recognised
32,083
Unutilised tax losses carried forward
30,619
Adjustments in respect of prior years
(32,083)
93
Depreciation in excess of capital allowances
3,912
2,247
Deferred tax charge/(credit)
(887)
1,143
Taxation (credit)/charge for the period
(32,970)
33,825
ACL (2002) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 31 MARCH 2023
- 19 -
8
Tangible fixed assets
Freehold land and buildings
Improvements to property
Plant and equipment
Fixtures and fittings
Computers
Motor vehicles
Total
£
£
£
£
£
£
£
Cost
At 2 April 2022
1,684,775
1,433
374,932
15,967
56,286
65,408
2,198,801
Additions
7,838
7,838
Disposals
(1,433)
(1,433)
At 31 March 2023
1,684,775
374,932
15,967
64,124
65,408
2,205,206
Depreciation and impairment
At 2 April 2022
106,284
858
351,947
8,571
55,721
63,425
586,806
Depreciation charged in the Period
17,695
9,540
1,109
2,888
397
31,629
Eliminated in respect of disposals
(858)
(858)
At 31 March 2023
123,979
361,487
9,680
58,609
63,822
617,577
Carrying amount
At 31 March 2023
1,560,796
13,445
6,287
5,515
1,586
1,587,629
At 1 April 2022
1,578,491
575
22,985
7,396
565
1,983
1,611,995
ACL (2002) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 31 MARCH 2023
8
Tangible fixed assets
(Continued)
- 20 -
Included in cost of land and buildings is freehold land of £800,000 (2022: £800,000) which is not depreciated.
9
Stocks
2023
2022
£
£
Raw materials and consumables
279,610
290,077
Work in progress
64,494
116,023
Finished goods and goods for resale
3,008
3,801
347,112
409,901
10
Debtors
2023
2022
Amounts falling due within one year:
£
£
Trade debtors
105,026
112,487
Corporation tax recoverable
11,238
7,664
Other debtors
5,891,952
6,506,712
Prepayments and accrued income
92,602
4,460
6,100,818
6,631,323
2023
2022
Amounts falling due after more than one year:
£
£
Corporation tax recoverable
248,754
234,716
Total debtors
6,349,572
6,866,039
Included within other debtors are amounts due from directors of £853,488 (2022: £812,305) with no formal terms attached. Under FRS 102, in the absence of any specific terms, the loans are regarded as repayable on demand.
ACL (2002) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 31 MARCH 2023
- 21 -
11
Creditors: amounts falling due within one year
2023
2022
Notes
£
£
Bank loans
13
1,051,680
1,106,278
Trade creditors
2,105,604
2,447,649
Corporation tax
68,117
71,487
Other taxation and social security
809,609
893,368
Other creditors
32,621
41,089
Accruals and deferred income
487,305
542,622
4,554,936
5,102,493
12
Creditors: amounts falling due after more than one year
2023
2022
Notes
£
£
Bank loans and overdrafts
13
218,750
343,750
13
Loans and overdrafts
2023
2022
£
£
Bank loans
1,270,430
1,450,028
Payable within one year
1,051,680
1,106,278
Payable after one year
218,750
343,750
Bank loans include unsecured loans totalling £375,000 (2022: £468.750) and secured loans totalling £895,430 (2022; £981,278).
The bank loan is secured by way of a legal charge over the company's freehold property which has a carrying value of £1.6 million (2022-£1.6m). The loan is repayable by monthly instalments over a term of seven years commencing January 2016 with one final instalment of an amount sufficient to repay the loan and interest in full. The loan bears interest at 2.1% per annum over base rate.
The loan has been disclosed as due within one year because the company has failed to meet the terms of the loan covenant for this year.
14
Provisions for liabilities
2023
2022
£
£
257,456
248,000
ACL (2002) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 31 MARCH 2023
14
Provisions for liabilities
(Continued)
- 22 -
Movements on provisions:
£
At 2 April 2022
248,000
Additional provisions in the year
9,456
At 31 March 2023
257,456
Other provisions relates to warranty provisions which have been estimated on future returns over a period of seven months.
15
Deferred taxation
The following are the major deferred tax liabilities and assets recognised by the company and movements thereon:
Liabilities
Liabilities
2023
2022
Balances:
£
£
Accelerated capital allowances
3,397
4,284
2023
Movements in the Period:
£
Liability at 2 April 2022
4,284
Credit to profit or loss
(887)
Liability at 31 March 2023
3,397
The deferred tax liability set out above is expected to reverse within [12 months] and relates to accelerated capital allowances that are expected to mature within the same period.
16
Retirement benefit schemes
2023
2022
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
78,017
89,091
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.
ACL (2002) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 31 MARCH 2023
- 23 -
17
Share capital
2023
2022
2023
2022
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary 'A' shares of £1 each
3,607
3,607
3,607
3,607
Ordinary 'B' shares of £1 each
1,391
1,391
1,391
1,391
4,998
4,998
4,998
4,998
The holders of the ordinary A and B shares are entitled to receive dividends as declared from time to time and all shares have equal voting rights being one vote per share. All ordinary shares rank equally with regard to the Company's residual assets.
18
Related party transactions
Transactions with related parties
During the Period the company entered into the following transactions with related parties:
Rent paid
2023
2022
£
£
Delmoor Property Investment Company
82,500
160,000
The company leases land and buildings from the related party and rent is payable quarterly under an informal lease which came to an end on 31st December 2022.
2023
2022
Amounts due to related parties
£
£
Delmoor Property Investment Company
85,080
-
The following amounts were outstanding at the reporting end date:
2023
2022
Amounts due from related parties
£
£
Craig & Watts Holdings Ltd
5,075,776
5,692,144
Other information
C R Watts a director and shareholder of the company is also a director and shareholder of the related parties.
The amounts due from and to related parties are unsecured, interest free and repayable on demand.
19
Directors' transactions
The total aggregated advances to directors during the year was £41,183 (2022: aggregated credits £4,722) and the balance outstanding at the year end was £853,488 (2022: £812,305).
ACL (2002) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE PERIOD ENDED 31 MARCH 2023
- 24 -
20
Cash absorbed by operations
2023
2022
£
£
(Loss)/profit for the Period after tax
(394,728)
94,222
Adjustments for:
Taxation (credited)/charged
(32,970)
33,825
Finance costs
72,770
47,053
Loss on disposal of tangible fixed assets
575
-
Depreciation and impairment of tangible fixed assets
31,629
32,376
Increase in provisions
9,456
50,000
Movements in working capital:
Decrease/(increase) in stocks
62,789
(45,357)
Decrease/(increase) in debtors
575,262
(1,675,412)
Decrease in creditors
(489,589)
(82,374)
Cash absorbed by operations
(164,806)
(1,545,667)
21
Analysis of changes in net debt
2 April 2022
Cash flows
31 March 2023
£
£
£
Cash at bank and in hand
511,174
(455,094)
56,080
Borrowings excluding overdrafts
(1,450,028)
179,598
(1,270,430)
(938,854)
(275,496)
(1,214,350)
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