Company registration number 01912532 (England and Wales)
ARKRAY FACTORY LTD.
FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 OCTOBER 2023
PAGES FOR FILING WITH REGISTRAR
ARKRAY FACTORY LTD.
CONTENTS
Page
Balance sheet
1
Notes to the financial statements
2 - 7
ARKRAY FACTORY LTD.
BALANCE SHEET
AS AT
31 OCTOBER 2023
31 October 2023
- 1 -
2023
2022
Notes
£
£
£
£
Current assets
Debtors
5
2,500
22,350
Cash at bank and in hand
3,216,480
3,396,613
3,218,980
3,418,963
Creditors: amounts falling due within one year
6
(35,933)
(21,871)
Net current assets
3,183,047
3,397,092
Capital and reserves
Called up share capital
5,255,383
5,255,383
Profit and loss reserves
(2,072,336)
(1,858,291)
Total equity
3,183,047
3,397,092
The directors of the company have elected not to include a copy of the profit and loss account within the financial statements.true
These financial statements have been prepared and delivered in accordance with the provisions applicable to companies subject to the small companies regime.
The financial statements were approved by the board of directors and authorised for issue on 29 August 2024 and are signed on its behalf by:
Mr Y Yao
Director
Company Registration No. 01912532
ARKRAY FACTORY LTD.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 OCTOBER 2023
- 2 -
1
Accounting policies
Company information
Arkray Factory Ltd is a private company limited by shares incorporated in England and Wales with registration number 01912532. The registered office is W2-03 Columba House, Adastral Park, Martlesham Heath, Ipswich, IP5 3RE.
1.1
Accounting convention
These financial statements have been prepared in accordance with FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” (“FRS 102”) and the requirements of the Companies Act 2006 as applicable to companies subject to the small companies regime. The disclosure requirements of section 1A of FRS 102 have been applied other than where additional disclosure is required to show a true and fair view.
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, modified to include the revaluation of freehold properties and to include investment properties and certain financial instruments at fair value. The principal accounting policies adopted are set out below.
1.2
Going concern
The company has ceased trading and it is the directors intention to wind up the company once the defined pension scheme liability has been settled. Accordingly, these financial statements have been prepared on a basis other than going concern. There are no adjustments to the amounts included in these financial statements as a result of preparing them on a basis other than going concern other than in relation to the defined pension scheme liability. The defined pension scheme liability on a buy-out basis was last valued at 1 June 2020 and had a deficit of £4.914m. The next buyout valuation is due to be performed as at 1 June 2023, however, this is yet to be finalised at the date of signing these accounts. On the basis that the buyout valuation is not available, the defined pensions scheme liability has been included on an FRS102 basis.
1.3
Tangible fixed assets
Tangible fixed assets are included at recoverable amount
Depreciation is recognised so as to write off the cost or valuation of assets less their residual values over their useful lives on the following bases:
Fixtures, fittings & equipment
3 - 5 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 credited or charged to profit or loss.
1.4
Cash at bank and in hand
Cash and cash equivalents are basic financial assets and include cash in hand, deposits held at call with banks, other short-term liquid investments with original maturities of three months or less, and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities.
ARKRAY FACTORY LTD.
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 OCTOBER 2023
1
Accounting policies
(Continued)
- 3 -
1.5
Financial instruments
The company has elected to apply the provisions of Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instruments Issues’ of FRS 102 to all of its financial instruments.
Financial instruments are recognised in the company's balance sheet when the company becomes party to the contractual provisions of the instrument.
Financial assets and liabilities are offset, with the net amounts presented in the financial statements, when there is a legally enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously.
Basic financial assets
Basic financial assets, which include debtors and cash and bank balances, are initially measured at transaction price including transaction costs and are subsequently carried at amortised cost using the effective interest method unless the arrangement constitutes a financing transaction, where the transaction is measured at the present value of the future receipts discounted at a market rate of interest. Financial assets classified as receivable within one year are not amortised.
Classification of financial liabilities
Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the company after deducting all of its liabilities.
Basic financial liabilities
Basic financial liabilities, including creditors, bank loans, loans from fellow group companies and preference shares that are classified as debt, are initially recognised at transaction price unless the arrangement constitutes a financing transaction, where the debt instrument is measured at the present value of the future payments discounted at a market rate of interest. Financial liabilities classified as payable within one year are not amortised.
Debt instruments are subsequently carried at amortised cost, using the effective interest rate method.
Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Amounts payable are classified as current liabilities if payment is due within one year or less. If not, they are presented as non-current liabilities. Trade creditors are recognised initially at transaction price and subsequently measured at amortised cost using the effective interest method.
1.6
Equity instruments
Equity instruments issued by the company are recorded at the proceeds received, net of transaction costs. Dividends payable on equity instruments are recognised as liabilities once they are no longer at the discretion of the company.
The company operates a defined benefit pension scheme providing benefits based on final pensionable pay. The assets of the scheme are held separately from those of the company.
Pension scheme assets are measured using market values. For quoted securities the current bid price is taken as market value. Pension scheme liabilities are measured using a projected unit method and discounted at the current rate of return on a high quality corporate bond of equivalent term and currency to the liability.
The pension scheme surplus (to the extent that it is recoverable) or deficit is recognised in full. The movement in the scheme surplus/deficit is split between operating charges, finance items and, in the statement of total recognised gains and losses, actuarial gains and losses.
ARKRAY FACTORY LTD.
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 OCTOBER 2023
1
Accounting policies
(Continued)
- 4 -
The net interest element is determined by multiplying the net defined benefit liability by the discount rate, taking into account any changes in the net defined benefit liability during the period as a result of contribution and benefit payments. The net interest is recognised in profit or loss as other finance revenue or cost.
Remeasurement changes comprise actuarial gains and losses, the effect of the asset ceiling and the return on the net defined benefit liability excluding amounts included in net interest. These are recognised immediately in other comprehensive income in the period in which they occur and are not reclassified to profit and loss in subsequent periods.
The net defined benefit pension asset or liability in the balance sheet comprises the total for each plan of the present value of the defined benefit obligation (using a discount rate based on high quality corporate bonds), less the fair value of plan assets out of which the obligations are to be settled directly. Fair value is based on market price information, and in the case of quoted securities is the published bid price. The value of a net pension benefit asset is limited to the amount that may be recovered either through reduced contributions or agreed refunds from the scheme.
1.7
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.
2
Judgements and key sources of estimation uncertainty
In the application of the company’s accounting policies, the directors are required to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised where the revision affects only that period, or in the period of the revision and future periods where the revision affects both current and future periods.
Critical judgements
The following judgements (apart from those involving estimates) have had the most significant effect on amounts recognised in the financial statements.
Defined benefit pension scheme
The company has a Defined Benefit Pension Scheme which has a number of inputs into the valuation. The relevant note shows the assumptions used in arriving at the valuation disclosed. The cost of defined benefit pension plans are determined using actuarial valuations. The actuarial valuation involves making assumptions about discount rates, future salary increases, mortality rates and future pension increases. Due to the complexity of the valuation, the underlying assumptions and the long term nature of these plans, such estimates are subject to significant uncertainty.
ARKRAY FACTORY LTD.
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 OCTOBER 2023
- 5 -
3
Employees
The average monthly number of persons (including directors) employed by the company during the year was:
2023
2022
Number
Number
Total
4
Tangible fixed assets
Plant and machinery etc
£
Cost
At 1 November 2022 and 31 October 2023
792
Depreciation and impairment
At 1 November 2022 and 31 October 2023
792
Carrying amount
At 31 October 2023
At 31 October 2022
5
Debtors
2023
2022
Amounts falling due within one year:
£
£
Amounts owed by group undertakings
19,330
Prepayments and accrued income
2,500
3,020
2,500
22,350
6
Creditors: amounts falling due within one year
2023
2022
£
£
Trade creditors
3,355
3,135
Amounts owed to group undertakings
12,276
Accruals and deferred income
20,302
18,736
35,933
21,871
ARKRAY FACTORY LTD.
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 OCTOBER 2023
- 6 -
7
Audit report information
As the income statement has been omitted from the filing copy of the financial statements, the following information in relation to the audit report on the statutory financial statements is provided in accordance with s444(5B) of the Companies Act 2006:
The auditor's report was qualified and the auditor reported as follows:
We have audited the financial statements of Arkray Factory Ltd. (the 'company') for the year ended 31 October 2023 which comprise , the balance sheet and notes to the financial statements, including significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice).
In our opinion, except for the effects of the matter described in the basis for qualified opinion sectopn of our report, the financial statements:
give a true and fair view of the state of the company's affairs as at 31 October 2023 and of its profit for the year then ended;
have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and
have been prepared in accordance with the requirements of the Companies Act 2006.
Basis for qualified opinion
The company has prepared these financial statements using a basis other than going concern. This necessitates including the defined benefit pension obligation in the balance sheet at both 31 October 2023 and 31 October 2022 on a buy out basis. Such a valuation was not available at 31 October 2023. We were unable to satisfy ourselves by alternative means in relation to the valuation of the defined benefit pension obligation.
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 qualified opinion.
Emphasis of matter - basis of preparation
We draw attention to note 1.2 to the financial statements which explains that it is the directors' intention to wind down the company's activities and ultimately strike it off once they have put in place the necessary arrangement to fund the company's pension scheme obligations. The directors' therefore do not consider it to be appropriate to adopt the going concern basis of accounting in preparing the financial statements. Accordingly the financial statements have been prepared on a basis other than going concern as described in note 1.2. Our opinion is not modified in respect of this matter.
Senior Statutory Auditor:
Malcolm McGready
Statutory Auditor:
Ensors Accountants LLP
Date of audit report:
29 August 2024
ARKRAY FACTORY LTD.
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 OCTOBER 2023
- 7 -
8
Financial commitments, guarantees and contingent liabilities
The most recent actuarial valuations of plan assets and the present value of the defined benefit obligation were carried out at 1st June 2020 by Michael Boore, Fellow of the Institute of Actuaries. The present value of the defined benefit obligation, the related current service cost and past service cost were measured using the projected unit credit method. As the scheme is in surplus on the valuation basis, no asset or liability has been recognised in these financial statements.
The actuarial valuation dated 1st June 2020 calculates that on a buy out basis the Scheme has a deficit of £4.914m. This contingent liability is not recognised in these financial statements.
The buy out basis is a more pessimistic valuation than the FRS102 valuation as it assumes the company is relieved of the pension obligation by securing future pension payments with a third party insurer.
9
Parent company
The parent company is Arkray Europe B.V, a company incorporated in the Netherlands. The registered office is: Prof J.h Bavincklaan 5 6 hg, Amstelveen, 1183 AT, Netherlands.
The ultimate controlling party is Arkray Inc, a company incorporated in Japan.