Company registration number 02773166 (England and Wales)
CAVOTEC INTERNATIONAL LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
CAVOTEC INTERNATIONAL LIMITED
COMPANY INFORMATION
Directors
J Wahlquist
(Appointed 1 May 2023)
V Tisci
(Appointed 11 April 2024)
Company number
02773166
Registered office
33 St James's Square
London
SW1Y 4JS
Accountants
Moore
Rutland House
Minerva Business Park
Lynch Wood
Peterborough
PE2 6PZ
CAVOTEC INTERNATIONAL LIMITED
CONTENTS
Page
Strategic report
1
Directors' report
2 - 3
Independent auditor's report
4 - 6
Income statement
7
Statement of financial position
8
Statement of changes in equity
9
Statement of cash flows
10
Notes to the financial statements
11 - 24
CAVOTEC INTERNATIONAL LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
- 1 -
The directors present the strategic report for the year ended 31 December 2023.
Review of the business
The company's key performance indicators are turnover and operating profit.
Turnover has increased from £13,991,042 to £15,805,078 as the Ports and Maritime business grew, which the company took over in 2022 as part of a group restructure.
Operating profit has decreased year on year to a loss of 2% (2022 operating profit 0.8%) which represents some considerable impairments made against receivable balances.
Principal risks and uncertainties
The management of the business and the nature of the company’s strategy are subject to a number of risks.
The directors have set out below the principal risks facing the business.
The directors are of the opinion that a thorough risk management process is adopted which involves the formal review of all the risks identified below. Where possible, processes are in place to monitor and mitigate such risks.
Currency risk
The company is exposed to translation and transaction foreign exchange risk.
Transaction risk is managed on a day to day basis through pricing and buying decisions.
Translation risk is managed at group level.
Liquidity risk
The company seeks to manage financial risk by ensuring sufficient liquidity is available to meet foreseeable needs and to invest cash assets safely and profitably.
The directors have prepared forecasts extending to December 2024 and are satisfied that the company has adequate resources to fund its day to day requirements, growth and strategic objectives for the foreseeable future. Accordingly, the financial statements have been prepared on a going concern basis.
Interest rate risk
The company finances its operations through a group banking facility. Interest rate risk is therefore limited.
Credit risk
The company’s principal financial assets are bank deposits and cash.
The credit risk associated with the bank deposits and cash is limited as the counterparties have high credit ratings assigned by international credit-rating agencies. The principal credit risk arises therefore from the company’s trade debtors.
In order to manage credit risk the directors set limits for customers based on a combination of payment history and third party credit references. Credit limits are reviewed on a regular basis in conjunction with debt ageing and collection history.
J Wahlquist
Director
25 July 2024
CAVOTEC INTERNATIONAL LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
- 2 -
The directors present their annual report and financial statements for the year ended 31 December 2023.
Principal activities
The principal activity of the company continued to be that of the provision of various support services to members of the worldwide group. Other activities of the company include the procurement and management of installation of equipment including reels, sliprings, connectors and automated mooring systems to the Ports and Maritime sector.
Results and dividends
The results for the year are set out on page 7.
No ordinary dividends were paid. The directors do not recommend payment of a final dividend.
Directors
The directors who held office during the year and up to the date of signature of the financial statements were as follows:
G C Withers
(Resigned 1 May 2023)
S Sguizzardi
(Resigned 11 April 2024)
J Wahlquist
(Appointed 1 May 2023)
V Tisci
(Appointed 11 April 2024)
Auditor
The auditor, Moore, is deemed to be reappointed under section 487(2) of the Companies Act 2006.
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 International Financial Reporting Standards (IFRSs) as adopted by the United Kingdom. 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, International Accounting Standard 1 requires that directors:
properly select and apply accounting policies;
present information, including accounting policies, in a manner that provides relevant, reliable, comparable and understandable information;
provide additional disclosures when compliance with the specific requirements in IFRSs are insufficient to enable users to understand the impact of particular transactions, other events and conditions on the entity's financial position and financial performance; and
make an assessment of the company's ability to continue as a going concern.
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.
CAVOTEC INTERNATIONAL LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 3 -
Statement of disclosure to auditor
Each director in office at the date of approval of this annual report confirms that:
so far as the director is aware, there is no relevant audit information of which the company's auditor is unaware, and
the director has taken all the steps that he / she ought to have taken as a director in order to make himself / herself aware of any relevant audit information and to establish that the company's auditor is aware of that information.
This confirmation is given and should be interpreted in accordance with the provisions of section 418 of the Companies Act 2006.
On behalf of the board
J Wahlquist
Director
25 July 2024
CAVOTEC INTERNATIONAL LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF CAVOTEC INTERNATIONAL LIMITED
- 4 -
Opinion
We have audited the financial statements of Cavotec International Limited (the 'company') for the year ended 31 December 2023 which comprise the income statement, the statement of financial position, 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 UK adopted international accounting standards.
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 UK adopted international accounting standards; and
have been prepared in accordance with the requirements of the Companies Act 2006.
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditor's responsibilities for the audit of the financial statements section of our report. We are independent of the company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC’s Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Conclusions relating to going concern
In auditing the financial statements, we have concluded that the directors' use of the going concern basis of accounting in the preparation of the financial statements is appropriate.
Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the company's ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.
Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.
The other information comprises the information included in the annual report other than the financial statements and our auditor's report thereon. The directors are responsible for the other information contained within the annual report. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the course of the audit, or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.
We have nothing to report in this regard.
Opinions on other matters prescribed by the Companies Act 2006
In our opinion, based on the work undertaken in the course of our audit:
the information given in the strategic report and the directors' report for the financial year for which the financial statements are prepared is consistent with the financial statements; and
the strategic report and the directors' report have been prepared in accordance with applicable legal requirements.
CAVOTEC INTERNATIONAL LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF CAVOTEC INTERNATIONAL LIMITED (CONTINUED)
- 5 -
Matters on which we are required to report by exception
In the light of the knowledge and understanding of the company and its environment obtained in the course of the audit, we have not identified material misstatements in the strategic report or the directors' report.
We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to report to you if, in our opinion:
adequate accounting records have not been kept, or returns adequate for our audit have not been received from branches not visited by us; or
the financial statements are not in agreement with the accounting records and returns; or
certain disclosures of 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.
The extent to which our procedures are capable of detecting irregularities, including fraud, is detailed below.
Explanation as to what extent the audit was considered capable of detecting irregularities, including fraud
The objectives of our audit in respect of fraud, are; to identify and assess the risks of material misstatement of the financial statements due to fraud; to obtain sufficient appropriate audit evidence regarding the assessed risks of material misstatement due to fraud, through designing and implementing appropriate responses to those assessed risks; and to respond appropriately to instances of fraud or suspected fraud identified during the audit. However, the primary responsibility for the prevention and detection of fraud rests with both management and those charged with governance of the company.
Our approach was as follows
We obtained an understanding of the legal and regulatory requirements applicable to the company and considered that the most significant are the Companies Act 2006, International Financial Reporting Standards (IFRS) as adopted for use in the United Kingdom, and UK taxation legislation.
We obtained an understanding of how the company complies with these requirements by discussions with management and those charged with governance.
We assessed the risk of material misstatement of the financial statements, including the risk of material misstatement due to fraud and how it might occur, by holding discussions with management and those charged with governance.
We inquired of management and those charged with governance as to any known instances of non-compliance or suspected non-compliance with laws and regulations.
CAVOTEC INTERNATIONAL LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF CAVOTEC INTERNATIONAL LIMITED (CONTINUED)
- 6 -
Based on this understanding, we designed specific appropriate audit procedures to identify instances of non-compliance with laws and regulations. This included making enquiries of management and those charged with governance and obtaining additional corroborative evidence as required.
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.
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 auditor's report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company’s members as a body, for our audit work, for this report, or for the opinions we have formed.
Robert Pluck (Senior Statutory Auditor)
For and on behalf of Moore
20 August 2024
Chartered Accountants
Statutory Auditor
Rutland House
Minerva Business Park
Lynch Wood
Peterborough
PE2 6PZ
CAVOTEC INTERNATIONAL LIMITED
INCOME STATEMENT
FOR THE YEAR ENDED 31 DECEMBER 2023
- 7 -
2023
2022
Notes
£
£
Revenue
4
15,805,078
13,991,042
Cost of sales
(1,188,123)
(453,486)
Gross profit
14,616,955
13,537,556
Administrative expenses
(14,867,463)
(12,969,414)
Exceptional items
5
(62,972)
(462,264)
Operating (loss)/profit
6
(313,480)
105,878
Investment revenues
10
110,366
Finance costs
11
(175,640)
(35)
(Loss)/profit before taxation
(489,120)
216,209
Income tax expense
12
(95,639)
(127,033)
(Loss)/profit and total comprehensive income for the year
(584,759)
89,176
CAVOTEC INTERNATIONAL LIMITED
STATEMENT OF FINANCIAL POSITION
AS AT 31 DECEMBER 2023
31 December 2023
- 8 -
2023
2022
Notes
£
£
Non-current assets
Property, plant and equipment
13
60,350
91,919
Current assets
Trade and other receivables
14
19,439,554
8,321,671
Cash and cash equivalents
128,935
189,635
19,568,489
8,511,306
Current liabilities
Trade and other payables
15
14,548,517
2,849,945
Current tax liabilities
129,566
33,927
Deferred revenue
17
120,425
304,263
14,798,508
3,188,135
Net current assets
4,769,981
5,323,171
Non-current liabilities
Deferred tax liabilities
16
11,880
11,880
Net assets
4,818,451
5,403,210
Equity
Called up share capital
19
1,300,000
1,300,000
Retained earnings
3,518,451
4,103,210
Total equity
4,818,451
5,403,210
The financial statements were approved by the board of directors and authorised for issue on 25 July 2024 and are signed on its behalf by:
J Wahlquist
Director
Company registration number 02773166 (England and Wales)
CAVOTEC INTERNATIONAL LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2023
- 9 -
Share capital
Retained earnings
Total
£
£
£
Balance at 1 January 2022
1,300,000
4,014,034
5,314,034
Year ended 31 December 2022:
Profit and total comprehensive income
-
89,176
89,176
Balance at 31 December 2022
1,300,000
4,103,210
5,403,210
Year ended 31 December 2023:
Loss and total comprehensive income
-
(584,759)
(584,759)
Balance at 31 December 2023
1,300,000
3,518,451
4,818,451
CAVOTEC INTERNATIONAL LIMITED
STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 DECEMBER 2023
- 10 -
2023
2022
Notes
£
£
£
£
Cash flows from operating activities
Cash generated from/(absorbed by) operations
23
137,539
(3,325,982)
Interest paid
(175,640)
(35)
Net cash outflow from operating activities
(38,101)
(3,326,017)
Investing activities
Purchase of property, plant and equipment
(22,599)
(108,552)
Proceeds from disposal of subsidiaries
1,040,035
Interest received
110,366
Net cash (used in)/generated from investing activities
(22,599)
1,041,849
Net decrease in cash and cash equivalents
(60,700)
(2,284,168)
Cash and cash equivalents at beginning of year
189,635
2,473,803
Cash and cash equivalents at end of year
128,935
189,635
CAVOTEC INTERNATIONAL LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
- 11 -
1
Accounting policies
Company information
Cavotec International Limited is a private company limited by shares incorporated in England and Wales. The registered office is 33 St James's Square, London, SW1Y 4JS. The company's principal activities and nature of its operations are disclosed in the directors' report.
1.1
Accounting convention
The financial statements have been prepared in accordance with International Financial Reporting Standards (IFRS) as adopted for use in the United Kingdom and with those parts of the Companies Act 2006 applicable to companies reporting under IFRS, except as otherwise stated.
The financial statements are prepared in sterling, which is the functional currency of the company. Monetary amounts in these financial statements are rounded to the nearest £.
The financial statements have been prepared under the historical cost convention. The principal accounting policies adopted are set out below.
1.2
Going concern
At the time of approving the financial statements, the directors have a reasonable expectation that thetrue 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
Revenue
Revenue is measured based on the consideration specified in a contract with a customer and excludes amounts collected on behalf of third parties. The company recognises revenue when it transfers control of a product or service to a customer.
When cash inflows are deferred and represent a financing arrangement, the fair value of the consideration is the present value of the future receipts. The difference between the fair value of the consideration and the nominal amount received is recognised as interest income.
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.
Revenue from group management services is recognised in the period when the services are performed.
1.4
Property, plant and equipment
Property, plant and equipment are initially measured at cost and subsequently measured at cost, net of depreciation and any impairment losses.
Depreciation is recognised so as to write off the cost of assets less their residual values over their useful lives on the following bases:
Fixtures and fittings
3, 5 or 7 years straight line
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 recognised in the income statement.
CAVOTEC INTERNATIONAL LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 12 -
1.5
Impairment of tangible and intangible assets
At each reporting end date, the company reviews the carrying amounts of its tangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where it is not possible to estimate the recoverable amount of an individual asset, the company estimates the recoverable amount of the cash-generating unit to which the asset belongs.
Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.
If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (or cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the impairment loss is treated as a revaluation decrease.
Where an impairment loss subsequently reverses, the carrying amount of the asset (or cash-generating unit) is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset (or cash-generating unit) in prior years. A reversal of an impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the reversal of the impairment loss is treated as a revaluation increase.
1.6
Cash and cash equivalents
Cash and cash equivalents 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 assets
Financial assets are recognised in the company's statement of financial position when the company becomes party to the contractual provisions of the instrument. Financial assets are classified into specified categories, depending on the nature and purpose of the financial assets.
At initial recognition, financial assets classified as fair value through profit and loss are measured at fair value and any transaction costs are recognised in profit or loss. Financial assets not classified as fair value through profit and loss are initially measured at fair value plus transaction costs.
Financial assets at fair value through profit or loss
Financial assets are classified as at FVTPL when the financial asset is held for trading. This is the case if:
the asset has been acquired principally for the purpose of selling in the near term, or
on initial recognition it is part of a portfolio of identified financial instruments that the manages together and has a recent actual pattern of short-term profit taking, or
it is a derivative that is not designated and effective as a hedging instrument.
Financial assets at FVTPL are stated at fair value with any gains or losses arising on remeasurement recognised in profit or loss. The net gain or loss recognised in profit or loss incorporates any dividend or interest earned on the financial asset. Interest and dividends are included in 'Investment income' and gains and losses on remeasurement included in 'other gains and losses' in the statement of comprehensive income.
CAVOTEC INTERNATIONAL LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 13 -
Financial assets held at amortised cost
Financial assets with fixed or determinable payments and fixed maturity dates that the Company has the positive intent and ability to hold to maturity are classified as held to maturity investments.
Held to maturity investments are measured at amortised cost using the effective interest method less any impairment, with revenue recognised on an effective yield basis.
The effective interest method is a method of calculating the amortised cost of a debt instrument and of allocating the interest income over the relevant period. The effective interest rate is the rate that exactly discounts estimated future cash receipts through the expected life of the debt instrument to the net carrying amount on initial recognition.
Trade Receivables, loans and other receivables that have fixed or determinable payments that are not quoted in an active market are classified as loans and receivables. Loans and receivables are measured at amortised cost using the effective interest method, less any impairment.
Interest is recognised by applying the effective interest rate, except for short-term receivables when the recognition of interest would be immaterial. The effective interest method is a method of calculating the amortised cost of a debt instrument and of allocating the interest income over the relevant period. The effective interest rate is the rate that exactly discounts estimated future cash receipts through the expected life of the debt instrument to the net carrying amount on initial recognition.
Financial assets at fair value through other comprehensive income
Debt instruments are classified as financial assets measured at fair value through other comprehensive income where the financial assets are held within the company’s business model whose objective is achieved by both collecting contractual cash flows and selling financial assets, and the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.
A debt instrument measured at fair value through other comprehensive income is recognised initially at fair value plus transaction costs directly attributable to the asset. After initial recognition, each asset is measured at fair value, with changes in fair value included in other comprehensive income. Accumulated gains or losses recognised through other comprehensive income are directly transferred to profit or loss when the debt instrument is derecognised.
Financial assets classified as available for sale are measured at fair value with gains and losses arising from changes in fair value recognised in other comprehensive income. Where an AFS financial asset is disposed of or determined to be impaired, the cumulative gain or loss previously recognised in other comprehensive income is reclassified to profit or loss.
Dividends and interest earned on AFS financial assets are included in the investment income line item in the statement of comprehensive income.
Impairment of financial assets
Financial assets carried at amortised cost and FVOCI are assessed for indicators of impairment at each reporting end date.
The expected credit losses associated with these assets are estimated on a forward-looking basis. A broad range of information is considered when assessing credit risk and measuring expected credit losses, including past events, current conditions, and reasonable and supportable forecasts that affect the expected collectability of the future cash flows of the instrument.
Derecognition of financial assets
Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire, or when it transfers the financial asset and substantially all the risks and rewards of ownership to another entity.
CAVOTEC INTERNATIONAL LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 14 -
1.8
Financial liabilities
The company recognises financial debt when the company becomes a party to the contractual provisions of the instruments. Financial liabilities are classified as either 'financial liabilities at fair value through profit or loss' or 'other financial liabilities'.
Other financial liabilities
Other financial liabilities, including borrowings, trade payables and other short-term monetary liabilities, are initially measured at fair value net of transaction costs directly attributable to the issuance of the financial liability. They are subsequently measured at amortised cost using the effective interest method. For the purposes of each financial liability, interest expense includes initial transaction costs and any premium payable on redemption, as well as any interest or coupon payable while the liability is outstanding.
Derecognition of financial liabilities
Financial liabilities are derecognised when, and only when, the company’s obligations are discharged, cancelled, or they expire.
1.9
Equity instruments
Equity instruments issued by the company are recorded at the proceeds received, net of direct issue costs. Dividends payable on equity instruments are recognised as liabilities once they are no longer at the discretion of the company.
1.10
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 income statement because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The company’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.
Deferred tax
Deferred tax is the tax expected to be payable or recoverable on differences between the carrying amounts of assets and liabilities in the financial statements and the corresponding tax bases used in the computation of taxable profit, and is accounted for using the balance sheet liability method. Deferred tax liabilities are generally recognised for all taxable temporary differences and deferred tax assets are recognised to the extent that it is probable that taxable profits will be available against which deductible temporary differences can be utilised. Such assets and liabilities are not recognised if the temporary 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 income statement, 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.
CAVOTEC INTERNATIONAL LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 15 -
1.11
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 inventories or non-current 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.
1.12
Retirement benefits
Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.
1.13
Leases
At inception, the company assesses whether a contract is, or contains, a lease within the scope of IFRS 16. A contract is, or contains, a lease if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration. Where a tangible asset is acquired through a lease, the company recognises a right-of-use asset and a lease liability at the lease commencement date. Right-of-use assets are included within property, plant and equipment, apart from those that meet the definition of investment property.
The company has elected not to recognise right-of-use assets and lease liabilities for short-term leases of machinery that have a lease term of 12 months or less, or for leases of low-value assets including IT equipment. The payments associated with these leases are recognised in profit or loss on a straight-line basis over the lease term.
1.14
Foreign exchange
Transactions in currencies other than pounds sterling are recorded at the rates of exchange prevailing at the dates of the transactions. At each reporting end date, monetary assets and liabilities that are denominated in foreign currencies are retranslated at the rates prevailing on the reporting end date. Gains and losses arising on translation in the period are included in profit or loss.
CAVOTEC INTERNATIONAL LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 16 -
2
Adoption of new and revised standards and changes in accounting policies
Standards which are in issue but not yet effective
At the date of authorisation of these financial statements, the following Standards and Interpretations, which have not yet been applied in these financial statements, were in issue but not yet effective (and in some cases had not yet been adopted by the UK):
IFRS 1
General Requirements for Disclosure of Sustainability-related Financial Information
IFRS 2
Climate-related Disclosures
Amendments to IAS 1
Classification of Liabilities as Current or Non-Current
Amendments to IAS 1
Classification of Liabilities as Current or Non-current — Deferral of Effective Date
Amendments to IFRS 16
Lease Liability in a Sale and Leaseback
Amendments to IAS 1
Non-current Liabilities with Covenants
Amendments to IAS 7 and IFRS 7
Supplier Finance Arrangements
Amendments to IAS 21
Lack of Exchangeability
Amendments to the IASB standards
To enhance their international applicability
The intention is to adopt those standards which apply to the company when they become effective but early adoption has not been undertaken.
The directors do not anticipate that the application of these amendments and new standards will have a material impact on the company's financial statements.
CAVOTEC INTERNATIONAL LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 17 -
3
Critical accounting estimates and judgements
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, if the revision affects only that period, or in the period of the revision and future periods if the revision affects both current and future periods.
4
Revenue
2023
2022
£
£
Revenue analysed by class of business
Group product marketing
14,446,996
13,602,792
Ports & maritime
1,358,082
388,250
15,805,078
13,991,042
5
Exceptional items
2023
2022
£
£
Expenditure
Loss on disposal of subsidiary
62,972
462,264
Exceptional items of £62,972 are in relation to the further loss on the sale of a subsidiary company, Dabico Airport Solutions UK Limited (formerly Cavotec UK Limited) in 2022.
6
Operating (loss)/profit
2023
2022
Operating (loss)/profit for the year is stated after charging/(crediting):
£
£
Exchange losses/(gains)
123,904
(43,620)
Depreciation of property, plant and equipment
54,147
38,169
Loss on disposal of property, plant and equipment
21
-
7
Auditor's remuneration
2023
2022
Fees payable to the company's auditor and associates:
£
£
For audit services
Audit of the financial statements of the company
15,750
11,343
CAVOTEC INTERNATIONAL LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 18 -
8
Employees
The average monthly number of persons (including directors) employed by the company during the year was:
2023
2022
Number
Number
Office and management
2
2
Ports and maritime
2
1
Total
4
3
Their aggregate remuneration comprised:
2023
2022
£
£
Wages and salaries
5,252,685
4,812,770
Social security costs
13,160
9,859
Pension costs
29,280
160,642
5,295,125
4,983,271
9
Directors' remuneration
2023
2022
£
£
Remuneration for qualifying services
254,562
Company pension contributions to defined contribution schemes
-
53,601
308,163
Remuneration disclosed above include the following amounts paid to the highest paid director:
2023
2022
£
£
Remuneration for qualifying services
n/a
254,562
Company pension contributions to defined contribution schemes
n/a
53,601
As total directors' remuneration was less than £200,000 in the current year, no disclosure is provided for that year.
CAVOTEC INTERNATIONAL LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
(Continued)
- 19 -
10
Investment income
2023
2022
£
£
Interest income
Bank deposits
109,928
Other interest income
438
Total interest revenue
110,366
110,366
Total interest income for financial assets that are not held at fair value through profit or loss is £- (2022 £109,928).
11
Finance costs
2023
2022
£
£
Interest on bank overdrafts and loans
-
35
Other interest payable
175,640
Total interest expense
175,640
35
12
Income tax expense
2023
2022
£
£
Current tax
UK corporation tax on profits for the current period
95,639
108,957
Deferred tax
Origination and reversal of temporary differences
18,076
Total tax charge
95,639
127,033
CAVOTEC INTERNATIONAL LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
12
Income tax expense
(Continued)
- 20 -
The charge for the year can be reconciled to the (loss)/profit per the income statement as follows:
2023
2022
£
£
(Loss)/profit before taxation
(489,120)
216,209
Expected tax (credit)/charge based on a corporation tax rate of 25.00% (2022: 19.00%)
(122,280)
41,080
Effect of expenses not deductible in determining taxable profit
218,391
87,830
Income not taxable
(1,877)
Effect of change in UK corporation tax rate
(6,017)
Other permanent differences
(349)
Change in unrecognised deferred tax provision
5,894
Taxation charge for the year
95,639
127,033
13
Property, plant and equipment
Fixtures and fittings
£
Cost
At 1 January 2022
594,472
Additions
108,552
At 31 December 2022
703,024
Additions
22,594
Disposals
(577,568)
At 31 December 2023
148,050
Accumulated depreciation and impairment
At 1 January 2022
572,936
Charge for the year
38,169
At 31 December 2022
611,105
Charge for the year
54,147
Eliminated on disposal
(577,552)
At 31 December 2023
87,700
Carrying amount
At 31 December 2023
60,350
At 31 December 2022
91,919
CAVOTEC INTERNATIONAL LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 21 -
14
Trade and other receivables
2023
2022
£
£
Trade receivables
620,388
380,333
Amounts owed by fellow group undertakings
17,084,146
5,771,190
Other receivables
1,163,421
1,179,856
Prepayments
571,599
990,292
19,439,554
8,321,671
Trade receivables disclosed above are classified as loans and receivables and are therefore measured at amortised cost.
15
Trade and other payables
2023
2022
£
£
Trade payables
188,222
299,129
Amounts owed to fellow group undertakings
13,272,661
2,179,634
Accruals
567,372
10,669
Social security and other taxation
108,884
34,629
Other payables
411,378
325,884
14,548,517
2,849,945
16
Deferred taxation
The following are the major deferred tax liabilities and assets recognised by the company and movements thereon during the current and prior reporting period.
Tax allowances in excess of depreciation
£
Asset at 1 January 2022
(6,196)
Deferred tax movements in prior year
Charge/(credit) to profit or loss
18,076
Liability at 1 January 2023 and 31 December 2023
11,880
Deferred tax assets and liabilities are offset in the financial statements only where the company has a legally enforceable right to do so.
CAVOTEC INTERNATIONAL LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 22 -
17
Deferred revenue
2023
2022
£
£
Ports and maritime
120,425
304,263
All deferred revenues are expected to be settled within 12 months from the reporting date.
18
Retirement benefit schemes
2023
2022
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
29,280
160,642
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.
CAVOTEC INTERNATIONAL LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 23 -
19
Share capital
2023
2022
2023
2022
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary shares of £1 each
1,300,000
1,300,000
1,300,000
1,300,000
Ordinary shares, which have a par value of £1, carry one vote per share and a right to dividends.
20
Capital risk management
The company is not subject to any externally imposed capital requirements.
21
Related party transactions
During the year the company entered into the following transactions with related parties:
Sales
Purchases
2023
2022
2023
2022
£
£
£
£
Entities with joint control or significant influence over the company
14,467,671
13,580,530
10,716,787
9,142,612
The following amounts were outstanding at the reporting end date:
2023
2022
Amounts due to related parties
£
£
Entities with joint control or significant influence over the company
13,272,661
2,179,634
The following amounts were outstanding at the reporting end date:
2023
2022
Amounts due from related parties
£
£
Entities with joint control or significant influence over the company
17,084,146
5,771,190
22
Controlling party
Cavotec Group Holdings NV is the immediate parent company. The ultimate parent company is Cavotec SA, a company incorporated in Switzerland.
The smallest and largest group for which consolidated accounts are prepared is that headed by Cavotec SA.
Accounts for the ultimate parent company can be obtained from Via S. Balestra 27, CH-6900 Lugano, Switzerland.
CAVOTEC INTERNATIONAL LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 24 -
23
Cash generated from/(absorbed by) operations
2023
2022
£
£
(Loss)/profit for the year before income tax
(489,120)
216,209
Adjustments for:
Finance costs
175,640
35
Investment income
(110,366)
Loss on disposal of property, plant and equipment
21
-
Depreciation and impairment of property, plant and equipment
54,147
38,169
Loss on sale of investments
62,972
462,264
Movements in working capital:
Increase in trade and other receivables
(11,180,855)
(3,194,600)
Increase/(decrease) in trade and other payables
11,698,572
(1,041,956)
(Decrease)/increase in deferred revenue outstanding
(183,838)
304,263
Cash generated from/(absorbed by) operations
137,539
(3,325,982)
24
Analysis of changes in net funds
1 January 2023
Cash flows
31 December 2023
£
£
£
Cash at bank and in hand
189,635
(60,700)
128,935
1 January 2022
Cash flows
31 December 2022
Prior year:
£
£
£
Cash at bank and in hand
2,473,803
(2,284,168)
189,635
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