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Company registration number: 02980841
PX Manufacturing Ltd
Financial statements
31 December 2023
PX Manufacturing Ltd
Contents
Directors and other information
Strategic report
Directors report
Independent auditor's report to the members
Statement of comprehensive income
Statement of financial position
Statement of changes in equity
Statement of cash flows
Notes to the financial statements
PX Manufacturing Ltd
Directors and other information
Directors Dr P Tetnowski
Mr S Tetnowski (Resigned 2 February 2023)
Mr R Tetnowski
Chivgate Limited
Secretary Ms E Tetnowska
Company number 02980841
Registered office 40 Thorby Avenue
March
Cambridgeshire
PE15 0AZ
Auditor Hamilton Coopers
66 Earl Street
Maidstone
ME14 1PS
PX Manufacturing Ltd
Strategic report
Year ended 31 December 2023
Business review
The business maintains a strong focus on rapid supply of BASEC and HAR approved premium quality cables to a diverse customer base in the UK market including large scale wholesalers and smaller independent businesses.
The market continued to experience some volatility in post Covid conditions with ongoing high interest and inflation rates causing subdued demand in the construction sector, particularly from March 2023. Global factors affecting copper price affected availability and pricing.
The company has over the course of 2023 continued it focus on refining its stocking policies for the long term and to shorten supply chains. This has enabled structured destocking although some exposure to adverse price factors affecting the market was suffered as the policies were rolled through.
The destocking along with the receipt of debt due from a related party and an opportunity for a land sale have enabled the Board to cut long term borrowing by £2m whilst maintaining fulsome working capital funding facilities and high levels of headroom in those facilities.
The main financial indicators during the year to 31 December 2023 were as follows:
- Turnover at £50m has fallen 11% on prior year of which 9% is volume related from subdued demand in the construction sector. Trading levels remained 8% higher than pre-Covid which the Board considers is a more relevant indicator of the strength of the business.
- Gross Profit Margin declined from 11.2% to 6.8% due to increased competition in a smaller market and pricing volatility experienced from mid 2023 factors which are now starting to ease.
- Operating loss for the year was £44,075 due to reduced margins and absorbing inflation in staff and other administration costs.
- Shareholders funds have reduced from £16.2m to £15.4m primarily as a result of revaluation and disposing of land.
Principal risk and uncertainties
To manage overall risk and uncertainty, the company monitors stocks, supply chain, sales order demand, foreign exchange rates and commodity pricing on a continual basis with long range forecasting for cash requirements as well as for trading, balance sheet and cash flows. It communicates regularly and in detail with all key stakeholder's.
The principal risks and uncertainties facing the company are as follows:
Economic risk
Economic risk continues to depend upon how the UK economy adapts to both domestic and global events, the cost of debt and what that means for customer demand. Stock planning is central to minimising the exposure to Economic Risk, as any downturn in economic activity is likely to slow demand for cable, but having a related party manufacturer assists with managing stock and its associated risks. The business has maintained its broad customer base to limit exposure to any sub segment of its market sector.
Price Risk
Copper prices are the most sensitive of the products' component commodities and are subject to daily board monitoring to limit exposure to price changes as well as careful management of stock levels.
Financial risk
Financial risk arises primarily from decades-high UK lending rates as well as fluctuations in foreign exchange rates, which are monitored daily. The majority of transactions are conducted in Sterling and the company continues its policy of only otherwise transacting in Euro and US Dollars, being the base currency of copper, using foreign exchange banking facilities and some forward trading to enable a policy of hedging some currency risk.
Credit risk
Credit Risk is addressed by insuring customer debts and setting credit limits in accordance with insured limits. Whilst this does not necessarily guarantee that no loss will occur from customer default, any loss is limited. Bad debt in the year was negligible.
Liquidity risk
Liquidity risk is managed by detailed short term and monthly forecasts to ensure that substantial purchasing commitments are always within working capital funding facilities. The working capital facilities are flexible and structured to support rapid growth as market conditions change. During the year £1.4m has been received in full repayment of debt due from a related party and being surplus to requirements were part of the £2m long term debt repaid to the company's bankers reducing interest costs for the future. The board considers its liquidity levels to remain very strong.
This report was approved by the board of directors on 25 July 2024 and signed on behalf of the board by:
Dr P Tetnowski
Director
PX Manufacturing Ltd
Directors report
Year ended 31 December 2023
The directors present their report and the financial statements of the company for the year ended 31 December 2023.
Directors
The directors who served the company during the year were as follows:
Dr P Tetnowski
Mr S Tetnowski (Resigned 2 February 2023)
Mr R Tetnowski
Chivgate Limited
Dividends
Particulars of recommended dividends are detailed in note 12 to the financial statements.
Future developments
The company is using its enhanced banking facilities to continually optimise stock holdings and mitigate against fluctuations in core material costs that can buffer demand working closely with its related parties to maximise opportunities in the Eurozone as well as in the UK.
Disclosure of information in the strategic report.
The information required by schedule 7 of the Large and Medium-sized Companies and Groups (Accounts and Reports) Regulations 2008 has been disclosed in the Strategic Report.
Directors responsibilities statement
The directors are responsible for preparing the strategic report, directors report and the financial statements in accordance with applicable law and regulations.
Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the company and 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 judgments and accounting estimates that are reasonable and prudent;
- state whether applicable UK Accounting Standards have been followed, subject to any material departures disclosed and explained in the financial statements; and
- 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.
Auditor
Each of the persons who is a director at the date of approval of this report confirms that:
- so far as they are aware, there is no relevant audit information of which the company's auditor is unaware; and - they have taken all steps that they ought to have taken as a director to make themselves aware of any relevant audit information and to establish that the company's auditor is aware of that information.
The auditor is deemed to have been re-appointed in accordance with section 487 of the Companies Act 2006.
This report was approved by the board of directors on 25 July 2024 and signed on behalf of the board by:
Dr P Tetnowski
Director
PX Manufacturing Ltd
Independent auditor's report to the members of
PX Manufacturing Ltd
Year ended 31 December 2023
Opinion
We have audited the financial statements of PX Manufacturing Ltd (the 'company') for the year ended 31 December 2023 which comprise the statement of comprehensive income, statement of financial position, statement of changes in equity, statement of cash flows 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 FRS 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 loss for the year then ended; - have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and - have been prepared in accordance with the requirements of the Companies Act 2006.
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the 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.
Other Information
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. 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 there is a material misstatement in the financial statements or a material misstatement of the other information. 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 directors' report for the financial year for which the financial statements are prepared is consistent with the financial statements; and
- the strategic report and the directors' report has been prepared in accordance with applicable legal requirements.
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 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 the 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, 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. Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below: Capability of the audit in detecting irregularities, including fraud.The objectives of our audit are to identify and assess the risks of material misstatement of the financial statements due to fraud or error; to obtain sufficient appropriate audit evidence regarding the assessed risks of material misstatement due to fraud or error; and to respond appropriately to those risks.Based on our understanding of the company and industry, and through discussion with the management (as required by auditing standards), we identified that the principal risks of non-compliance with laws and regulations related to their FCA permissions and requirements. We considered the extent to which non-compliance might have a material effect on the financial statements. We also considered those laws andregulations that have a direct impact on the preparation of the financial statements such as the Companies Act 2006 and taxation. We communicated identified laws and regulations throughout our team and remained alert to any indications of non-compliance throughout the audit. We evaluated management's incentives and opportunities for fraudulent manipulation of the financial statements (including the risk of override of controls) and determined that the principal risks were related to posting inappropriate journal entries to increaserevenue or reduce expenditure and management bias in accounting estimates and judgmental areas of the financial statements such as accrued income. Audit procedures performed by the engagement team included:- Discussions with management and assessment of known or suspected instances of non compliance with laws and regulations and fraud; and- Assessment of identified fraud risk factors; and- Challenging assumptions and judgements made by management in its significant accounting estimates; and- Performing analytical procedures to identify any unusual or unexpected relationships, including related party transactions, that may indicate risks of material misstatement due to fraud; and- Confirmation of related parties with management, and review of transactions throughout the period to identify any previously undisclosed transactions with related parties outside the normal course of business; and- Reading minutes of meetings of those charged with governance; and- Review of significant and unusual transactions and evaluation of the underlying financial rationale supporting the transactions; and- Identifying and testing journal entries, in particular any manual entries made at the year end for financial statement preparation. There are inherent limitations in the audit procedures described above and the further removed non compliance with laws and regulations is from the events and transactions reflected in the financial statements, the less likely we would become aware of it. Also, the risk of not detecting a material misstatement due tofraud is higher than the risk of not detecting one resulting from error, as fraud may involve deliberate concealment by, for example, forgery or intentional misrepresentations, or through collusion. As part of an audit in accordance with ISAs (UK), we exercise professional judgment and maintain professional scepticism throughout the audit. we also: - Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. - Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the internal control. - Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the directors. - Conclude on the appropriateness of the directors use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the company’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause the company to cease to continue as a going concern. - Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation. We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.
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 an auditors report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company's members as a body, for our audit work, for this report, or for the opinions we have formed.
Asim Malik FCA (Senior Statutory Auditor)
For and on behalf of
Hamilton Coopers
Chartered Accountants and Statutory Auditors
66 Earl Street
Maidstone
ME14 1PS
25 July 2024
PX Manufacturing Ltd
Statement of comprehensive income
Year ended 31 December 2023
2023 2022
as restated
Note £ £
Turnover 4 49,845,223 56,123,548
Cost of sales ( 46,467,713) ( 49,856,340)
_______ _______
Gross profit 3,377,510 6,267,208
Distribution costs ( 1,062,176) ( 1,155,560)
Administrative expenses ( 2,499,199) ( 2,770,256)
Other operating income 5 139,790 188,399
_______ _______
Operating (loss)/profit 6 ( 44,075) 2,529,791
Other interest receivable and similar income 9 34,010 3,748
Interest payable and similar expenses 10 ( 666,961) ( 478,505)
(Loss)/profit before taxation ( 677,026) 2,055,034
Tax on (loss)/profit 11 ( 120,469) ( 251,687)
_______ _______
(Loss)/profit for the financial year ( 797,495) 1,803,347
_______ _______
Revaluation of tangible assets - ( 1,300,000)
_______ _______
Total comprehensive income for the year ( 797,495) 503,347
_______ _______
All the activities of the company are from continuing operations.
PX Manufacturing Ltd
Statement of financial position
31 December 2023
2023 2022
as restated
Note £ £ £ £
Fixed assets
Intangible assets 13 243,722 292,466
Tangible assets 14 8,256,888 8,769,281
_______ _______
8,500,610 9,061,747
Current assets
Stocks 15 9,409,628 13,287,968
Debtors 16 7,871,339 12,079,083
Cash at bank and in hand 1,425,716 1,215,313
_______ _______
18,706,683 26,582,364
Creditors: amounts falling due
within one year 17 ( 7,998,911) ( 13,236,039)
_______ _______
Net current assets 10,707,772 13,346,325
_______ _______
Total assets less current liabilities 19,208,382 22,408,072
Creditors: amounts falling due
after more than one year 18 ( 2,732,541) ( 5,321,666)
Provisions for liabilities 19 ( 1,039,198) ( 852,268)
_______ _______
Net assets 15,436,643 16,234,138
_______ _______
Capital and reserves
Called up share capital 23 500,000 500,000
Revaluation reserve 3,446,424 3,633,354
Profit and loss account 11,490,219 12,100,784
_______ _______
Shareholders funds 15,436,643 16,234,138
_______ _______
These financial statements were approved by the board of directors and authorised for issue on 25 July 2024 , and are signed on behalf of the board by:
Dr P Tetnowski
Director
Company registration number: 02980841
PX Manufacturing Ltd
Statement of changes in equity
Year ended 31 December 2023
Called up share capital Revaluation reserve Profit and loss account Total
£ £ £ £
At 1 January 2022 500,000 4,788,646 11,842,145 17,130,791
(Loss)/profit for the year (as restated) 1,803,347 1,803,347
Other comprehensive income for the year:
Revaluation of tangible assets (as restated) ( 1,300,000) ( 1,300,000)
Tax relating to components of other comprehensive income (as restated) 144,708 ( 144,708) -
_______ _______ _______ _______
Total comprehensive income for the year (as restated) - ( 1,155,292) 1,658,639 503,347
Dividends paid and payable ( 1,400,000) ( 1,400,000)
_______ _______ _______ _______
Total investments by and distributions to owners - - ( 1,400,000) ( 1,400,000)
_______ _______ _______ _______
At 31 December 2022 and 1 January 2023 500,000 3,633,354 12,100,784 16,234,138
(Loss)/profit for the year ( 797,495) ( 797,495)
Other comprehensive income for the year:
Tax relating to components of other comprehensive income ( 186,930) 186,930 -
_______ _______ _______ _______
Total comprehensive income for the year - ( 186,930) ( 610,565) ( 797,495)
_______ _______ _______ _______
At 31 December 2023 500,000 3,446,424 11,490,219 15,436,643
_______ _______ _______ _______
PX Manufacturing Ltd
Statement of cash flows
Year ended 31 December 2023
2023 2022
as restated
£ £
Cash flows from operating activities
(Loss)/profit for the financial year ( 797,495) 1,803,347
Adjustments for:
Depreciation of tangible assets 18,993 19,394
Amortisation of intangible assets 48,744 48,744
Other interest receivable and similar income ( 34,010) ( 3,748)
Interest payable and similar expenses 666,961 478,505
Tax on loss/profit 120,469 251,687
Accrued expenses/(income) ( 111,607) ( 5,095)
Changes in:
Stocks 3,878,340 ( 2,361,095)
Trade and other debtors 4,276,116 3,660,323
Trade and other creditors ( 4,871,417) ( 3,313,756)
_______ _______
Cash generated from operations 3,195,094 578,306
Interest paid ( 666,961) ( 478,505)
Interest received 34,010 3,748
Tax paid ( 256,015) ( 281,706)
_______ _______
Net cash from/(used in) operating activities 2,306,128 ( 178,157)
_______ _______
Cash flows from investing activities
Purchase of tangible assets ( 6,600) ( 33,224)
Proceeds from sale of tangible assets 500,000 -
_______ _______
Net cash from/(used in) investing activities 493,400 ( 33,224)
_______ _______
Cash flows from financing activities
Proceeds from borrowings - 1,753,699
Repayments of borrowings ( 2,589,125) -
Equity dividends paid - ( 1,400,000)
_______ _______
Net cash (used in)/from financing activities ( 2,589,125) 353,699
_______ _______
Net increase/(decrease) in cash and cash equivalents 210,403 142,318
Cash and cash equivalents at beginning of year 1,215,313 1,072,995
_______ _______
Cash and cash equivalents at end of year 1,425,716 1,215,313
_______ _______
PX Manufacturing Ltd
Notes to the financial statements
Year ended 31 December 2023
1. General information
The company is a private company limited by shares, registered in England. The address of the registered office is 40 Thorby Avenue, March, Cambridgeshire, PE15 0AZ.
2. Statement of compliance
These financial statements have been prepared in compliance with FRS 102, 'The Financial Reporting Standard applicable in the UK and Republic of Ireland'.
3. Accounting policies
Basis of preparation
The financial statements have been prepared on the historical cost basis, as modified by the revaluation of certain financial assets and liabilities and investment properties measured at fair value through profit or loss.
The financial statements are prepared in sterling, which is the functional currency of the entity.
Turnover
Turnover is measured at the fair value of the consideration received or receivable for goods supplied and services rendered, net of discounts and Value Added Tax.
Revenue from the sale of goods is recognised when the significant risks and rewards of ownership have transferred to the buyer (usually on despatch of the goods); the amount of revenue can be measured reliably; it is probable that the associated economic benefits will flow to the entity; and the costs incurred or to be incurred in respect of the transactions can be measured reliably.
Taxation
The taxation expense represents the aggregate amount of current and deferred tax recognised in the reporting period. Tax is recognised in the statement of comprehensive income, except to the extent that it relates to items recognised in other comprehensive income or directly in capital and reserves. In this case, tax is recognised in other comprehensive income or directly in capital and reserves, respectively. Current tax is recognised on taxable profit for the current and past periods. Current tax is measured at the amounts of tax expected to pay or recover using the tax rates and laws that have been enacted or substantively enacted at the reporting date.
Deferred tax is recognised in respect of all timing differences at the reporting date. Unrelieved tax losses and other 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. Deferred tax is measured using the tax rates and laws that have been enacted or substantively enacted by the reporting date that are expected to apply to the reversal of the timing difference.
Foreign currencies
Foreign currency transactions are initially recorded in the functional currency, by applying the spot exchange rate as at the date of the transaction. Monetary assets and liabilities denominated in foreign currencies are translated at the exchange rate ruling at the reporting date, with any gains or losses being taken to profit or loss.
Operating leases
Lease payments are recognised as an expense over the lease term on a straight-line basis. The aggregate benefit of lease incentives is recognised as a reduction to expense over the lease term, on a straight-line basis.
Intangible assets
Intangible assets are initially recorded at cost, and are subsequently stated at cost less any accumulated amortisation and impairment losses. Any intangible assets carried at a revalued amount, are recorded at the fair value at the date of revaluation, as determined by reference to an active market, less any subsequent accumulated amortisation and subsequent accumulated impairment losses. Intangible assets acquired as part of a business combination are only recognised separately from goodwill when they arise from contractual or other legal rights, are separable, the expected future economic benefits are probable and the cost or value can be measured reliably.
Amortisation
Amortisation is calculated so as to write off the cost of an asset, less its estimated residual value, over the useful life of that asset as follows:
Patents, trademarks and licences - 10 % straight line
If there is an indication that there has been a significant change in amortisation rate, useful life or residual value of an intangible asset, the amortisation is revised prospectively to reflect the new estimates.
Tangible assets
tangible assets are initially recorded at cost, and are subsequently stated at cost less any accumulated depreciation and impairment losses. Any tangible assets carried at revalued amounts are recorded at the fair value at the date of revaluation less any subsequent accumulated depreciation and subsequent accumulated impairment losses. An increase in the carrying amount of an asset as a result of a revaluation, is recognised in other comprehensive income and accumulated in capital and reserves, except to the extent it reverses a revaluation decrease of the same asset previously recognised in profit or loss. A decrease in the carrying amount of an asset as a result of revaluation is recognised in other comprehensive income to the extent of any previously recognised revaluation increase accumulated in capital and reserves in respect of that asset. Where a revaluation decrease exceeds the accumulated revaluation gains accumulated in capital and reserves in respect of that asset, the excess shall be recognised in profit or loss.
Depreciation
Depreciation is calculated so as to write off the cost or valuation of an asset, less its residual value, over the useful economic life of that asset as follows:
Plant and machinery - 10 % reducing balance
Fittings fixtures and equipment - 25% reducing balance and straight line on equipment
If there is an indication that there has been a significant change in depreciation rate, useful life or residual value of tangible assets, the depreciation is revised prospectively to reflect the new estimates.
Impairment
A review for indicators of impairment is carried out at each reporting date, with the recoverable amount being estimated where such indicators exist. Where the carrying value exceeds the recoverable amount, the asset is impaired accordingly. Prior impairments are also reviewed for possible reversal at each reporting date. When it is not possible to estimate the recoverable amount of an individual asset, an estimate is made of the recoverable amount of the cash-generating unit to which the asset belongs. The cash-generating unit is the smallest identifiable group of assets that includes the asset and generates cash inflows that are largely independent of the cash inflows from other assets or groups of assets.
Stocks
Stocks are measured at the lower of cost and estimated selling price less costs to complete and sell. Cost includes all costs of purchase, costs of conversion and other costs incurred in bringing the stocks to their present location and condition.
Provisions
Provisions are recognised when the entity has an obligation at the reporting date as a result of a past event; it is probable that the entity will be required to transfer economic benefits in settlement and the amount of the obligation can be estimated reliably. Provisions are recognised as a liability in the statement of financial position and the amount of the provision as an expense. Provisions are initially measured at the best estimate of the amount required to settle the obligation at the reporting date and subsequently reviewed at each reporting date and adjusted to reflect the current best estimate of the amount that would be required to settle the obligation. Any adjustments to the amounts previously recognised are recognised in profit or loss unless the provision was originally recognised as part of the cost of an asset. When a provision is measured at the present value of the amount expected to be required to settle the obligation, the unwinding of the discount is recognised in finance costs in profit or loss in the period it arises.
Financial instruments
A financial asset or a financial liability is recognised only when the company becomes a party to the contractual provisions of the instrument. Basic financial instruments are initially recognised at the transaction price, unless the arrangement constitutes a financing transaction, where it is recognised at the present value of the future payments discounted at a market rate of interest for a similar debt instrument. Debt instruments are subsequently measured at amortised cost. Where investments in non-convertible preference shares and non-puttable ordinary shares or preference shares are publicly traded or their fair value can otherwise be measured reliably, the investment is subsequently measured at fair value with changes in fair value recognised in profit or loss. All other such investments are subsequently measured at cost less impairment. Other financial instruments, including derivatives, are initially recognised at fair value, unless payment for an asset is deferred beyond normal business terms or financed at a rate of interest that is not a market rate, in which case the asset is measured at the present value of the future payments discounted at a market rate of interest for a similar debt instrument. Other financial instruments are subsequently measured at fair value, with any changes recognised in profit or loss, with the exception of hedging instruments in a designated hedging relationship.
Financial assets that are measured at cost or amortised cost are reviewed for objective evidence of impairment at the end of each reporting date. If there is objective evidence of impairment, an impairment loss is recognised in profit or loss immediately. For all equity instruments regardless of significance, and other financial assets that are individually significant, these are assessed individually for impairment. Other financial assets or either assessed individually or grouped on the basis of similar credit risk characteristics. Any reversals of impairment are recognised in profit or loss immediately, to the extent that the reversal does not result in a carrying amount of the financial asset that exceeds what the carrying amount would have been had the impairment not previously been recognised.
Defined contribution plans
Contributions to defined contribution plans are recognised as an expense in the period in which the related service is provided. Prepaid contributions are recognised as an asset to the extent that the prepayment will lead to a reduction in future payments or a cash refund. When contributions are not expected to be settled wholly within 12 months of the end of the reporting date in which the employees render the related service, the liability is measured on a discounted present value basis. The unwinding of the discount is recognised in finance costs in profit or loss in the period in which it arises.
Revenue recognition
Revenue is measured at the fair vale of the consideration received, excluding discounts, rebates, VAT, and other sales taxes or duty.
4. Turnover
Turnover arises from:
2023 2022
£ £
Sale of goods 49,845,223 56,123,548
_______ _______
The turnover is attributable to the one principal activity of the company. An analysis of turnover by the geographical markets that substantially differ from each other is given below:
2023 2022
£ £
UK 49,812,813 55,920,040
Europe 32,410 203,508
_______ _______
49,845,223 56,123,548
_______ _______
5. Other operating income
2023 2022
£ £
Other operating income 139,790 188,399
_______ _______
6. Operating loss/profit
Operating loss/profit is stated after charging/(crediting):
2023 2022
£ £
Amortisation of intangible assets 48,744 48,744
Depreciation of tangible assets 18,993 19,394
Impairment of trade debtors 4,217 (52,850)
Operating lease rentals 18,448 17,737
Foreign exchange differences ( 77,680) 386,701
Fees payable for the audit of the financial statements 20,000 20,000
_______ _______
7. Staff costs
The average number of persons employed by the company during the year, including the directors, amounted to:
2023 2022
Office and management 17 15
Manufacturing and distribution 25 26
_______ _______
42 41
_______ _______
The aggregate payroll costs incurred during the year were:
2023 2022
£ £
Wages and salaries 1,532,246 1,396,488
Social security costs 147,576 129,483
Other pension costs 28,246 25,009
_______ _______
1,708,068 1,550,980
_______ _______
8. Directors remuneration
The directors aggregate remuneration in respect of qualifying services was:
2023 2022
£ £
Remuneration 253,994 203,185
_______ _______
Remuneration of the highest paid directors in respect of qualifying services:
2023 2022
£ £
Aggregate remuneration 126,997 114,432
Company contributions to pension plans in respect of qualifying services - -
_______ _______
126,997 114,432
_______ _______
9. Other interest receivable and similar income
2023 2022
£ £
Bank deposits 34,010 3,748
_______ _______
10. Interest payable and similar expenses
2023 2022
£ £
Bank loans and overdrafts 664,332 477,171
Other interest payable and similar expenses 2,629 1,334
_______ _______
666,961 478,505
_______ _______
11. Tax on loss/profit
Major components of tax expense
2023 2022
as restated
£ £
Current tax:
UK current tax income/expense ( 66,461) 396,395
_______ _______
Deferred tax:
Origination and reversal of timing differences 186,930 ( 144,708)
_______ _______
Tax on loss/profit 120,469 251,687
_______ _______
Reconciliation of tax expense
The tax assessed on the loss/profit for the year is higher than (2022: lower than) the standard rate of corporation tax in the UK of 19.00 % (2022: 19.00%).
2023 2022
as restated
£ £
(Loss)/profit before taxation ( 677,026) 2,055,034
_______ _______
(Loss)/profit multiplied by rate of tax ( 128,635) 390,456
Effect of capital allowances and depreciation 11,047 5,939
Utilisation of tax losses 51,127 -
Deferred taxation - Origination and reversal of timing differences 186,930 ( 144,708)
_______ _______
Tax on loss/profit 120,469 251,687
_______ _______
12. Dividends
Equity dividends
2023 2022
£ £
Dividends paid during the year (excluding those for which a liability existed at the end of the prior year) - 1,400,000
_______ _______
13. Intangible assets
Patents, trademarks & licences Total
£ £
Cost
At 1 January 2023 and 31 December 2023 487,442 487,442
_______ _______
Amortisation
At 1 January 2023 194,976 194,976
Charge for the year 48,744 48,744
_______ _______
At 31 December 2023 243,720 243,720
_______ _______
Carrying amount
At 31 December 2023 243,722 243,722
_______ _______
At 31 December 2022 292,466 292,466
_______ _______
The cost relates to licence fees for cable products to be sold in UK and Europe.
14. Tangible assets
Freehold property Plant and machinery Fixtures, fittings and equipment Total
£ £ £ £
Cost
At 1 January 2023 (as restated) 8,650,000 441,389 76,055 9,167,444
Additions - 6,600 - 6,600
Disposals ( 500,000) - - ( 500,000)
_______ _______ _______ _______
At 31 December 2023 8,150,000 447,989 76,055 8,674,044
_______ _______ _______ _______
Depreciation
At 1 January 2023 - 336,450 61,713 398,163
Charge for the year - 10,818 8,175 18,993
_______ _______ _______ _______
At 31 December 2023 - 347,268 69,888 417,156
_______ _______ _______ _______
Carrying amount
At 31 December 2023 8,150,000 100,721 6,167 8,256,888
_______ _______ _______ _______
At 31 December 2022 (as restated) 8,650,000 104,939 14,342 8,769,281
_______ _______ _______ _______
HSBC has a legal charge on the freehold property in order to secure company borrowing's.
Tangible assets held at valuation
On 29 September 2023 the company divested a portion of land adjacent to their warehouse.
15. Stocks
2023 2022
£ £
Finished goods and goods for resale 9,409,628 13,287,968
_______ _______
Finished goods consist of cable stocks comprised of copper and oil based insulation materials.
16. Debtors
2023 2022
£ £
Trade debtors 4,478,189 7,185,455
Amounts owed by group undertakings 2,851,944 2,851,944
Amounts owed by undertakings in which the company has a participating interest 310,454 1,898,715
Prepayments and accrued income 110,459 102,981
Other debtors 120,293 39,988
_______ _______
7,871,339 12,079,083
_______ _______
17. Creditors: amounts falling due within one year
2023 2022
£ £
Bank loans and overdrafts 620,000 620,000
Trade creditors 3,703,452 4,405,843
Accruals and deferred income 277,189 386,885
Corporation tax - 256,015
Social security and other taxes 956,825 1,727,742
Other creditors 2,441,445 5,839,554
_______ _______
7,998,911 13,236,039
_______ _______
Included in bank loans and overdrafts are amounts in the sum of £620,000 ( Dec 2022 : £620,000) in respect of secured bank loans due within one year.Included in other creditors are amounts in the sum of £2,434,721 ( Dec 2022 : £5,834,623) in respect of invoice financing.
18. Creditors: amounts falling due after more than one year
2023 2022
£ £
Bank loans and overdrafts 2,732,541 5,321,666
_______ _______
HSBC has a legal charge on the freehold property in order to secure company borrowing's.
Included within creditors: amounts falling due after more than one year is an amount of £252,581 ( Dec 2022: £ 3,100,000) in respect of liabilities payable or repayable by instalments which fall due for payment after more than five years from the reporting date.
19. Provisions
Deferred tax (note 20) Total
£ £
At 1 January 2023 (as restated) 852,268 852,268
Charges against provisions 186,930 186,930
_______ _______
At 31 December 2023 1,039,198 1,039,198
_______ _______
20. Deferred tax
The deferred tax included in the statement of financial position is as follows:
2023 2022
as restated
£ £
Included in provisions (note 19) 1,039,198 852,268
_______ _______
The deferred tax account consists of the tax effect of timing differences in respect of:
2023 2022
as restated
£ £
Revaluation of tangible assets 1,039,198 852,268
_______ _______
21. Employee benefits
The amount recognised in profit or loss in relation to defined contribution plans was £ 28,246 (2022: £ 25,009 ).
22. Financial instruments
The carrying amount for each category of financial instrument is as follows:
2023 2022
£ £
Financial assets that are debt instruments measured at amortised cost
Trade debtors 4,478,189 7,185,455
Other debtors 120,293 39,988
Cash at bank and in hand 1,425,716 1,215,313
Amounts owed by group undertakings 2,851,944 2,851,944
Amounts owed by related parties 310,454 1,898,715
_______ _______
9,186,596 13,191,415
_______ _______
Financial liabilities measured at amortised cost
Bank and other loans 3,352,541 5,941,666
Trade creditors 3,703,452 4,405,843
Other creditors 2,441,445 5,839,554
_______ _______
9,497,438 16,187,063
_______ _______
23. Called up share capital
Issued, called up and fully paid
2023 2022
No £ No £
Ordinary shares shares of £ 1.00 each 500,000 500,000 500,000 500,000
_______ _______ _______ _______
24. Analysis of changes in net debt
At 1 January 2023 Cash flows At 31 December 2023
£ £ £
Cash and cash equivalents 1,215,313 210,403 1,425,716
Debt due within one year (620,000) - (620,000)
Debt due after one year (5,321,666) 2,589,125 (2,732,541)
_______ _______ _______
( 4,726,353) 2,799,528 ( 1,926,825)
_______ _______ _______
25. Operating leases
The company as lessee
The total future minimum lease payments under non-cancellable operating leases are as follows:
£ £
Not later than 1 year 18,623 18,273
Later than 1 year and not later than 5 years 37,181 54,045
_______ _______
55,804 72,318
_______ _______
26. Related party transactions
During the year the company entered into the following transactions with related parties:
Transaction value Balance owed by/(owed to)
2023 2022 2023 2022
£ £ £ £
Chivgate Limited - - 2,851,944 2,851,944
PX Kabel GmbH - - - 1,422,786
EU Kabel Limited - - 310,454 478,604
Xanthi Electric Ltd - - - -
PX Kabel Spolka Z Ograniczona - - - ( 2,675)
_______ _______ _______ _______
PX Kabel GmbH is a company incorporated in Cottbus, Germany. Transactions with EU Kabel Ltd comprise of purchases of cable goods and manufacturing services totalling £23,544,920 (Dec 2022 : £28,441,834) and the sale of raw materials by the company to EU Kabel Ltd of £18,751,257 ( Dec 2022: 21,757,366l). A late payment charge of £129,537 (Dec 2022 : £158,608) was levied on and paid by PX Kabel GmbH. PX Kabel Spolka Z Ograniczon, is a company incorporated in Poland. The directors also control and are the beneficial owners of PX Cables Limited and Annex Energy Limited, which are all presently dormant.
27. Controlling party
The ultimate parent company is Chivgate Limited , a company registered in England & Wales.The Tetnowski family control Chivgate Limited which owns 100% of the share capital of this company.
28. Prior year adjustment
Land sold during the year for £500,000 was previously valued at £1,800,000 resulting in an impairment of the prior year revaluation reserves of £1,300,000 and an adjustment to the prior year deferred tax provision of £144,708.