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REGISTERED NUMBER: 04568580 (England and Wales)












Strategic Report, Report of the Directors and

Financial Statements

for the Year Ended 31 August 2023

for

Advanced Pallet Systems Ltd

Advanced Pallet Systems Ltd (Registered number: 04568580)

Contents of the Financial Statements
for the Year Ended 31 August 2023










Page

Company Information 1

Strategic Report 2

Report of the Directors 3

Report of the Independent Auditors 5

Statement of Income and Retained Earnings 9

Balance Sheet 10

Cash Flow Statement 11

Notes to the Financial Statements 12


Advanced Pallet Systems Ltd

Company Information
for the Year Ended 31 August 2023







DIRECTORS: Mr A J R Bowes
Mrs K Bowes
Mr M J R Bowes
Mr P J R Bowes



REGISTERED OFFICE: 69 High Street
Bideford
Devon
EX39 2AT



REGISTERED NUMBER: 04568580 (England and Wales)



AUDITORS: Sumer Auditco Ltd
Statutory Auditors and Chartered Accountants
69 High Street
Bideford
Devon
EX39 2AT



BUSINESS ADDRESS: Chubb Road
East The Water
Bideford
Devon
EX39 4HE

Advanced Pallet Systems Ltd (Registered number: 04568580)

Strategic Report
for the Year Ended 31 August 2023


The directors present their strategic report for the year ended 31 August 2023.

REVIEW OF BUSINESS
The 22/23 financial year saw the business continue to perform strongly with tight controls on direct and administrative costs.

The companies key financial indicators showed the turnover for the year decreased by 3.7% to £18,178,241, down from £18,872,617 in 2022. Despite an increase in units produced and sold, overall turnover was affected by price reductions necessitated by the continuous rise in material costs during 2021 and 2022. This is evident in the operating profit of £4,976,118 for the year, compared to £5,682,940 in 2022.

The balance sheet shows net assets of £4,803,792 (2022 - £3,567,979) as at 31 August 2023. Notably tangible asset additions of £870,677 from investment and upgrades in a wide range of advanced machines.

RESULTS
The results for the year are set out in the statement of comprehensive income on page 9.

PRINCIPAL RISKS AND UNCERTAINTIES
There are several potential risks and uncertainties that could significantly affect the company's performance, leading to outcomes that may differ from both expected and historical results. The company continuously monitors these operational risks, which are outlined below:

Ensuring adequate resources to underpin operations: The risk is managed by financial planning, analysis and continuous forecasting, both financially and operationally, and maintaining long term relationships with stakeholders.

Financial risks mainly involve exposure to bad debt: however, this risk is mitigated by the company's robust credit control practices, which include thorough credit assessments, ongoing monitoring of customer accounts, and prompt action to address any potential payment issues.

Ongoing supply chain challenges, including shortages of raw materials, increased transportation costs, and delays, can affect production schedules and increase costs: We continue to build strategic partnerships with key suppliers to negate risks and improve overall company performance.

The directors consider the main risks to the business not to have changed from previous years and will continue with current policies and procedures that have served the business well in their management.

The directors are not aware of any significant risks or uncertainties which would cast significant doubt about the ability of the company to continue as a going concern.

FUTURE DEVELOPMENTS
A new 10-year lease has been signed for our current location, targeting continued profitable growth, with planned upgrades to the site and further investment in sustainable advanced manufacturing techniques.

SIGNED ON BEHALF OF THE BOARD:





Mr M J R Bowes - Director


29 August 2024

Advanced Pallet Systems Ltd (Registered number: 04568580)

Report of the Directors
for the Year Ended 31 August 2023


The directors present their report with the financial statements of the company for the year ended 31 August 2023.

PRINCIPAL ACTIVITY
The company's principal activity is to manufacture packaging solutions using wood as the core product, offering tailored and sustainable solutions across the Southwest. We specialise in the manufacturing of pallets and crates to our customers' exact specification but also distribute a wide range of competitively priced paper, plastic and consumable packaging.

DIVIDENDS
Interim dividends of £2,706,328 (2022 - £4,206,328) were paid during the year.

The directors recommend that no final dividend be paid.

The total distribution for the year ended 31 August 2023 will be £2,706,328 (2022 - £4,206,328).

EVENTS SINCE THE END OF THE YEAR
Since the balance sheet date the company has renewed the lease to occupy the premises for a further 10 years at an initial annual rental of £150,000, increasing by 5% every second year.

DIRECTORS
The directors shown below have held office during the whole of the period from 1 September 2022 to the date of this report.

Mr A J R Bowes
Mrs K Bowes
Mr M J R Bowes
Mr P J R Bowes

POLITICAL DONATIONS AND EXPENDITURE
During the year the company made charitable contributions totalling £12,855 (2022 - £1,645).

DISCLOSURE IN THE STRATEGIC REPORT
Particulars of the financial risk management objectives and policies of the company and future developments are set out in the strategic report.

STATEMENT OF DIRECTORS' RESPONSIBILITIES
The directors are responsible for preparing the Strategic Report, the Report of the Directors and the financial statements in accordance with applicable law and regulations.

Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the company and of the profit or loss of the company for that period. In preparing these financial statements, the directors are required to:

-select suitable accounting policies and then apply them consistently;
-make judgements and accounting estimates that are reasonable and prudent;
-prepare the financial statements on the going concern basis unless it is inappropriate to presume that the company will continue in business.


Advanced Pallet Systems Ltd (Registered number: 04568580)

Report of the Directors
for the Year Ended 31 August 2023

STATEMENT OF DIRECTORS' RESPONSIBILITIES - continued
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.

The directors are responsible for the maintenance and integrity of the corporate and financial information included on the company's website. Legislation in the United Kingdom governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions.

STATEMENT AS TO DISCLOSURE OF INFORMATION TO AUDITORS
So far as the directors are aware, there is no relevant audit information (as defined by Section 418 of the Companies Act 2006) of which the company's auditors are unaware, and each director has taken all the steps that he or she ought to have taken as a director in order to make himself or herself aware of any relevant audit information and to establish that the company's auditors are aware of that information.

SIGNED ON BEHALF OF THE BOARD:





Mr M J R Bowes - Director


29 August 2024

Report of the Independent Auditors to the Members of
Advanced Pallet Systems Ltd


Qualified Opinion
We have audited the financial statements of Advanced Pallet Systems Ltd (the 'company') for the year ended 31 August 2023 which comprise the Statement of Income and Retained Earnings, Balance Sheet, Cash Flow Statement and Notes to the Financial Statements, including a summary of significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland' (United Kingdom Generally Accepted Accounting Practice).

In our opinion, except for the possible effects of the matters described in the Basis for Qualified Opinion section of our report, the accompanying financial statements:

- give a true and fair view of the state of the company's affairs as at 31st August 2023 and of its profit for the period then ended;

- have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and

- have been prepared in accordance with the requirements of the Companies Act 2006.

Basis for qualified opinion
We were not appointed auditors until after 31st August 2022 and thus did not observe the counting of the stock and work in progress at 31 August 2021 or 31 August 2022. We were unable to obtain sufficient appropriate audit evidence about the existence of stock and work in progress of £809,548 at 31 August 2021 and £1,274,190 at 31 August 2022 using alternative audit procedures. Consequently we were unable to determine whether any adjustments to the carrying value at 31 August 2021 and 31 August 2022 were necessary or whether there was any consequential effect on the cost of sales for the year ended 31 August 2023 and also for the year ended 31 August 2022. Our audit opinion on the financial statements for the year ended 31 August 2023 has been modified accordingly.

We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditors' responsibilities for the audit of the financial statements section of our report. We are independent of the company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC's Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our qualified 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.

Corresponding figures
The corresponding figures for the year ended 31 August 2022 are unaudited.

Report of the Independent Auditors to the Members of
Advanced Pallet Systems Ltd


Other information
The directors are responsible for the other information. The other information comprises the information in the Strategic Report and the Report of the Directors, but does not include the financial statements and our Report of the Auditors thereon.

Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon.

In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.

As described in our basis for qualified opinion of our report, we were unable to satisfy ourselves concerning the inventory quantities help at 31st August 2022 and 31st August 2021, which were included in the balance sheet at £1,274,190 and £809,548 respectively. We have concluded that were the other information refers to the inventory balance or related balances such as cost of sales , it may be materially misstated for the same reason.

Opinions on other matters prescribed by the Companies Act 2006
In our opinion, based on the work undertaken in the course of the audit:
- the information given in the Strategic Report and the Report of the Directors for the financial year for which the financial statements are prepared is consistent with the financial statements; and
- the Strategic Report and the Report of the Directors have been prepared in accordance with applicable legal requirements.
We were not appointed as auditor of the company until after 31st August 2022 and thus did not observe the counting of physical inventories at the beginning or end of the year. We were unable to satisfy ourselves by alternative means concerning the inventory quantities held at 31s August 2021 and 31st August 2022, which are included in the balance sheet at £809,548 and £1,274,190 respectively, by using other audit procedures.

Consequently we were unable to determine whether any adjustment to these amounts were necessary or whether there was any consequential effect on the cost of sales for the period ended 31st August 2023 and also for the year ended 31st August 2022. In addition, were any adjustments to the stock and work in progress balance to be required, the strategic report would also need to be amended.

Except for the possible effects of the matters described in the basis for qualified opinion section of our report, in the light of the knowledge and understanding of the company and its environment obtained in the course of our audit, we have not identified material misstatements in the strategic report or the directors report.

Matters on which we are required to report by exception
In the light of the knowledge and understanding of the company and its environment obtained in the course of the audit, we have not identified material misstatements in the Strategic Report or the Report of the Directors. Arising solely from the limitation on the scope ot our work relating to inventory, referred to above:
- we have not obtained all the information and explanations that we considered necessary for the purpose of our audit;
and
- we were unable to determine whether adequate accounting records have been kept.

We have nothing to report in respect of the following matters where the Companies Act 2006 requires us to report to you if, in our opinion:
- adequate accounting records have not been kept, or returns adequate for our audit have not been received from branches not visited by us; or
- the financial statements are not in agreement with the accounting records and returns; or
- certain disclosures of directors' remuneration specified by law are not made; or
- we have not received all the information and explanations we require for our audit.

Report of the Independent Auditors to the Members of
Advanced Pallet Systems Ltd


Responsibilities of directors
As explained more fully in the Statement of Directors' Responsibilities, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the financial statements, the directors are responsible for assessing the company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the company or to cease operations, or have no realistic alternative but to do so.

Auditors' responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue a Report of the Auditors that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.

The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below:

As part of designing our audit, we determined materiality and assessed the risks of material misstatement in the financial statements, including how fraud may occur by enquiring of management of its own consideration of fraud. We also considered potential financial or other pressures, opportunity and motivations for fraud. As part of this discussion we identified the internal controls established to mitigate risks related to fraud or non-compliance with laws and regulations and how management monitor these processes. In common with all audits under UK ISAs we are also required to perform specific procedures to respond to the threat of management override. This work included testing the appropriateness of journal entries and other adjustments; assessing whether the judgements made in making accounting estimates are indicative of a potential bias; and evaluating the business rationale of any significant transactions that are unusual or outside the normal course of business.

We gained an understanding of the legal and regulatory framework applicable to the company and the industry in which it operates, and considered the risk of acts by the company that were contrary to these laws and regulations, including fraud.

We focused on laws and regulations that could give rise to a material misstatement in the financial statements, including, but not limited to, the Health and Safety Act, UK Companies Act and UK tax legislation.

Our tests included agreeing the financial statements disclosures to underlying supporting documentation and enquiries with management.

We did not identify any key audit matters relating to irregularities, including fraud.

Our audit procedures were designed to respond to risks of material misstatement in the financial statements, recognising that the risk of not detecting a material misstatement due to fraud is higher than the risk of not detecting one resulting from error, as fraud may involve deliberate concealment by, for example, forgery, misrepresentations or through collusion. There are inherent limitations in the audit procedures performed 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 are to become aware of it.

A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council's website at www.frc.org.uk/auditorsresponsibilities. This description forms part of our Report of the Auditors.

Report of the Independent Auditors to the Members of
Advanced Pallet Systems Ltd


Use of our report
This report is made solely to the company's members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the company's members those matters we are required to state to them in a Report of the Auditors and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company's members as a body, for our audit work, for this report, or for the opinions we have formed.




David Sims BSc FCA (Senior Statutory Auditor)
for and on behalf of Sumer Auditco Ltd
Statutory Auditors and Chartered Accountants
69 High Street
Bideford
Devon
EX39 2AT

29 August 2024

Advanced Pallet Systems Ltd (Registered number: 04568580)

Statement of Income and Retained Earnings
for the Year Ended 31 August 2023

2023 2022
as restated
Notes £    £   

TURNOVER 4 18,178,241 18,872,617

Cost of sales 11,816,838 12,122,234
GROSS PROFIT 6,361,403 6,750,383

Administrative expenses 1,472,988 1,171,206
4,888,415 5,579,177

Other operating income 87,703 103,763
OPERATING PROFIT 6 4,976,118 5,682,940

Interest receivable and similar income 51,004 7,747
5,027,122 5,690,687

Interest payable and similar expenses 8 879 -
PROFIT BEFORE TAXATION 5,026,243 5,690,687

Tax on profit 9 1,084,102 1,080,925
PROFIT FOR THE FINANCIAL YEAR 3,942,141 4,609,762

Retained earnings at beginning of year as
previously reported

3,348,839

3,164,333

Dividends 10 (2,706,328 ) (4,206,328 )
Prior year adjustment 11 218,928 -

RETAINED EARNINGS AT END OF
YEAR

4,803,580

3,567,767

Advanced Pallet Systems Ltd (Registered number: 04568580)

Balance Sheet
31 August 2023

2023 2022
as restated
Notes £    £    £    £   
FIXED ASSETS
Intangible assets 12 10,526 1,312
Tangible assets 13 1,277,259 700,347
1,287,785 701,659

CURRENT ASSETS
Stocks 14 1,373,497 1,274,190
Debtors 15 2,408,856 2,968,853
Cash at bank and in hand 2,541,468 1,487,883
6,323,821 5,730,926
CREDITORS
Amounts falling due within one year 16 2,608,517 2,773,920
NET CURRENT ASSETS 3,715,304 2,957,006
TOTAL ASSETS LESS CURRENT
LIABILITIES

5,003,089

3,658,665

CREDITORS
Amounts falling due after more than one
year

17

(2,241

)

-

PROVISIONS FOR LIABILITIES 20 (197,056 ) (90,686 )
NET ASSETS 4,803,792 3,567,979

CAPITAL AND RESERVES
Called up share capital 21 212 212
Retained earnings 22 4,803,580 3,567,767
SHAREHOLDERS' FUNDS 4,803,792 3,567,979

The financial statements were approved by the Board of Directors and authorised for issue on 29 August 2024 and were signed on its behalf by:





Mr M J R Bowes - Director


Advanced Pallet Systems Ltd (Registered number: 04568580)

Cash Flow Statement
for the Year Ended 31 August 2023

2023 2022
as restated
Notes £    £   
Cash flows from operating activities
Cash generated from operations 29 5,569,459 4,783,309
Tax paid (1,071,195 ) (611,323 )
Net cash from operating activities 4,498,264 4,171,986

Cash flows from investing activities
Purchase of intangible fixed assets (11,375 ) -
Purchase of tangible fixed assets (816,889 ) (192,014 )
Sale of tangible fixed assets 62,046 29,000
Interest received 51,004 7,747
Net cash from investing activities (715,214 ) (155,267 )

Cash flows from financing activities
Capital repayments in year (24,653 ) -
Amount introduced by directors 1,516 1,115
Amount withdrawn by directors - (11 )
Equity dividends paid (2,706,328 ) (4,206,328 )
Net cash from financing activities (2,729,465 ) (4,205,224 )

Increase/(decrease) in cash and cash equivalents 1,053,585 (188,505 )
Cash and cash equivalents at beginning of
year

30

1,487,883

1,676,388

Cash and cash equivalents at end of year 30 2,541,468 1,487,883

Advanced Pallet Systems Ltd (Registered number: 04568580)

Notes to the Financial Statements
for the Year Ended 31 August 2023


1. STATUTORY INFORMATION

Advanced Pallet Systems Ltd is a private company, limited by shares , registered in England and Wales. The company's registered number and registered office address can be found on the Company Information page.

The presentation currency of the financial statements is the Pound Sterling (£).


2. STATEMENT OF COMPLIANCE

These financial statements have been prepared in accordance with Financial Reporting Standard 102 "The Financial Reporting Standard applicable in the UK and Republic of Ireland" and the Companies Act 2006. There were no material departures from that standard.

3. ACCOUNTING POLICIES

Basis of preparing the financial statements
The financial statements have been prepared under the historical cost convention.

The principal accounting policies adopted in the preparation of the financial statements are set out below and remain unchanged from the previous period, and also have been consistently applied within the same accounts.

Significant judgements and estimates
In the application of the company's accounting policies, the directors are required to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.

The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised where the revision affects only that period, or in the period of the revision and future periods where the revision affects both current and future periods.

Key sources of estimation uncertainty
The estimates and assumptions which have a significant risk of causing a material adjustment to the carrying amount of assets and liabilities are as follows.

Estimated useful lives
In determining the estimated useful life the company considers the expected usage (capacity or physical output) of the asset, expected physical wear and tear of the asset and expected technical advancements in the industry that could lead to obsolescence of the asset. Each year the company reviews the above to establish if there is any change is expected useful life of tangible assets. The depreciation charge for the year ended 31 August 2023 was £262,061 (2022 - £195,711).

Work in progress
The labour cost associated to jobs in progress is estimated based on an average of labour time spent. The total value of work in progress at 31 August 2023 was £195,025 (2022 - £273,453).

Turnover
Turnover is measured at the fair value of the consideration received or receivable, excluding discounts, rebates, value added tax and other sales taxes.

Goodwill
Goodwill representing the excess of the purchase price over the fair value of the net assets of undertakings acquired is capitalised in the balance sheet and is amortised by equal annual instalments over the expected useful economic life of 20 years.

Advanced Pallet Systems Ltd (Registered number: 04568580)

Notes to the Financial Statements - continued
for the Year Ended 31 August 2023


3. ACCOUNTING POLICIES - continued

Intangible assets
Intangible assets are initially measured at cost. After initial recognition, intangible assets are measured at cost less any accumulated amortisation and any accumulated impairment losses.

Computer software is being amortised evenly over its estimated useful life of three years.

Tangible fixed assets
Depreciation is provided at the following annual rates in order to write off each asset over its estimated useful life or, if held under a finance lease, over the lease term, whichever is the shorter.
Planning costs - Written off in year of purchase
Improvements to property - 10% straight line
Plant and machinery - 33% straight line and 20% straight line
Fixtures and fittings - 33% straight line
Motor vehicles - 25% straight line

Tangible fixed assets are stated at cost (or deemed cost) or valuation less accumulated depreciation and accumulated impairment losses. Cost includes costs directly attributable to making the asset capable of operating as intended by management.

Government grants
Government grants in respect of capital expenditure are treated as deferred income and are credited to the profit and loss account over the estimated useful life of the assets to which they relate.

Government grants in respect of revenue items are credited to the profit and loss account when they are receivable.

Stocks
Stocks and work in progress are valued at the lower of cost and estimated selling price less costs to complete and sell, after making due allowance for obsolete and slow moving items.

Cost is calculated using the first-in, first-out method and includes all purchase, transport, and handling costs in bringing stocks to their present location and condition.

Financial instruments
Basic financial instruments with no stated interest rate and receivable or payable within one year are recorded at transaction price. Any losses arising from impairment are recognised in the profit and loss account in administrative expenses. Loans and borrowings are initially recognised at the transaction price including transaction costs.

Taxation
Taxation for the year comprises current and deferred tax. 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 equity.

Current or deferred taxation assets and liabilities are not discounted.

Current tax is recognised at the amount of tax payable using the tax rates and laws that have been enacted or substantively enacted by the balance sheet date.


Advanced Pallet Systems Ltd (Registered number: 04568580)

Notes to the Financial Statements - continued
for the Year Ended 31 August 2023


3. ACCOUNTING POLICIES - continued
Deferred tax
Deferred tax is recognised in respect of all timing differences that have originated but not reversed at the balance sheet date.

Timing differences arise from the inclusion of income and expenses in tax assessments in periods different from those in which they are recognised in financial statements. Deferred tax is measured using tax rates and laws that have been enacted or substantively enacted by the year end and that are expected to apply to the reversal of the timing difference.

Unrelieved tax losses and other deferred tax assets are recognised only to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits.

Foreign currencies
Assets and liabilities in foreign currencies are translated into sterling at the rates of exchange ruling at the balance sheet date. Transactions in foreign currencies are translated into sterling at the rate of exchange ruling at the date of transaction. Exchange differences are taken into account in arriving at the operating result.

Hire purchase and leasing commitments
Assets obtained under hire purchase contracts or finance leases are capitalised in the balance sheet. Those held under hire purchase contracts are depreciated over their estimated useful lives. Those held under finance leases are depreciated over their estimated useful lives or the lease term, whichever is the shorter.

The interest element of these obligations is charged to profit or loss over the relevant period. The capital element of the future payments is treated as a liability.

Rentals paid under operating leases are charged to profit or loss on a straight line basis over the period of the lease.

Pension costs and other post-retirement benefits
The company operates a defined contribution pension scheme. Contributions payable to the company's pension scheme are charged to profit or loss in the period to which they relate.

Going concern
Having regard to the company's anticipated future revenues and costs including repayment of debt where appropriate, together with the expected availability of working capital, the directors consider that it is appropriate to prepare the financial statements on the going concern basis.

4. TURNOVER

The turnover and profit before taxation are attributable to the one principal activity of the company.

An analysis of turnover by geographical market is given below:

2023 2022
as restated
£    £   
United Kingdom 18,178,241 18,872,617
18,178,241 18,872,617

Advanced Pallet Systems Ltd (Registered number: 04568580)

Notes to the Financial Statements - continued
for the Year Ended 31 August 2023


5. EMPLOYEES AND DIRECTORS
2023 2022
as restated
£    £   
Wages and salaries 1,643,888 1,771,465
Social security costs 147,438 159,272
Other pension costs 222,617 31,328
2,013,943 1,962,065

The average number of employees during the year was as follows:
2023 2022
as restated

Directors 4 4
Production 53 58
Administration 6 6
63 68

2023 2022
as restated
£    £   
Directors' remuneration 36,400 37,293
Directors' pension contributions to money purchase schemes 180,086 96

The number of directors to whom retirement benefits were accruing was as follows:

Money purchase schemes 4 1

6. OPERATING PROFIT

The operating profit is stated after charging/(crediting):

2023 2022
as restated
£    £   
Depreciation - owned assets 248,365 195,711
Depreciation - assets on hire purchase contracts 13,696 -
Profit on disposal of fixed assets (30,342 ) (15,080 )
Goodwill amortisation 1,312 3,150
Computer software amortisation 849 -

7. AUDITORS' REMUNERATION
2023 2022
as restated
£    £   
Fees payable to the company's auditors for the audit of the company's
financial statements

12,000

-

Advanced Pallet Systems Ltd (Registered number: 04568580)

Notes to the Financial Statements - continued
for the Year Ended 31 August 2023


8. INTEREST PAYABLE AND SIMILAR EXPENSES
2023 2022
as restated
£    £   
Interest payable 879 -

9. TAXATION

Analysis of the tax charge
The tax charge on the profit for the year was as follows:
2023 2022
as restated
£    £   
Current tax:
UK corporation tax 977,732 1,049,406

Deferred tax 106,370 31,519
Tax on profit 1,084,102 1,080,925

Reconciliation of total tax charge included in profit and loss
The tax assessed for the year is higher than the standard rate of corporation tax in the UK. The difference is explained below:

2023 2022
as restated
£    £   
Profit before tax 5,026,243 5,690,687
Profit multiplied by the standard rate of corporation tax in the UK of
21.515% (2022 - 19%)

1,081,396

1,081,231

Effects of:
Property improvements depreciation and loss on disposals 12,052 10,459
Amortisation 282 598
Effect of super deductions (22,487 ) (8,813 )
Movement in general bad debt provision (1,974 ) (24,315 )
Impact of change in tax rate on deferred tax 14,833 21,765
Total tax charge 1,084,102 1,080,925

10. DIVIDENDS

Interim dividends of £2,706,328 (2022 - £4,206,328) were paid during the year.

11. PRIOR YEAR ADJUSTMENT

The prior year figures have been restated to reflect understated closing stock of £270,282 and consequent increase in corporation tax expense of £51,354.

The effect of this has been to increase current assets by £270,282, increase creditors due within one year by £51,354 and to increase retained earnings by £218,928.

Advanced Pallet Systems Ltd (Registered number: 04568580)

Notes to the Financial Statements - continued
for the Year Ended 31 August 2023


12. INTANGIBLE FIXED ASSETS
Computer
Goodwill software Totals
£    £    £   
COST
At 1 September 2022 63,000 - 63,000
Additions - 11,375 11,375
At 31 August 2023 63,000 11,375 74,375
AMORTISATION
At 1 September 2022 61,688 - 61,688
Amortisation for year 1,312 849 2,161
At 31 August 2023 63,000 849 63,849
NET BOOK VALUE
At 31 August 2023 - 10,526 10,526
At 31 August 2022 1,312 - 1,312

13. TANGIBLE FIXED ASSETS
Improvements
Planning to Plant and
costs property machinery
£    £    £   
COST
At 1 September 2022 49,644 659,545 1,447,904
Additions - 33,219 675,476
Disposals - (3,926 ) (380,468 )
At 31 August 2023 49,644 688,838 1,742,912
DEPRECIATION
At 1 September 2022 49,644 287,721 1,178,860
Charge for year - 63,651 144,619
Eliminated on disposal - (3,642 ) (349,048 )
At 31 August 2023 49,644 347,730 974,431
NET BOOK VALUE
At 31 August 2023 - 341,108 768,481
At 31 August 2022 - 371,824 269,044

Advanced Pallet Systems Ltd (Registered number: 04568580)

Notes to the Financial Statements - continued
for the Year Ended 31 August 2023


13. TANGIBLE FIXED ASSETS - continued

Fixtures
and Motor
fittings vehicles Totals
£    £    £   
COST
At 1 September 2022 42,687 253,409 2,453,189
Additions 31,705 130,277 870,677
Disposals (14,652 ) (30,050 ) (429,096 )
At 31 August 2023 59,740 353,636 2,894,770
DEPRECIATION
At 1 September 2022 38,330 198,287 1,752,842
Charge for year 8,652 45,139 262,061
Eliminated on disposal (14,652 ) (30,050 ) (397,392 )
At 31 August 2023 32,330 213,376 1,617,511
NET BOOK VALUE
At 31 August 2023 27,410 140,260 1,277,259
At 31 August 2022 4,357 55,122 700,347

Fixed assets, included in the above, which are held under hire purchase contracts are as follows:
Motor
vehicles
£   
COST
Additions 59,764
At 31 August 2023 59,764
DEPRECIATION
Charge for year 13,696
At 31 August 2023 13,696
NET BOOK VALUE
At 31 August 2023 46,068

14. STOCKS
2023 2022
as restated
£    £   
Stocks 1,178,472 1,000,737
Work-in-progress 195,025 273,453
1,373,497 1,274,190

Advanced Pallet Systems Ltd (Registered number: 04568580)

Notes to the Financial Statements - continued
for the Year Ended 31 August 2023


15. DEBTORS: AMOUNTS FALLING DUE WITHIN ONE YEAR
2023 2022
as restated
£    £   
Trade debtors 2,344,883 2,794,376
Other debtors 57,616 171,025
Directors' current accounts 629 1,565
Corporation tax 683 -
Prepayments and accrued income 5,045 1,887
2,408,856 2,968,853

At 31 August 2023, the provision for doubtful debts totalled £47,855 (2022 - £62,580).

16. CREDITORS: AMOUNTS FALLING DUE WITHIN ONE YEAR
2023 2022
as restated
£    £   
Hire purchase contracts (see note 18) 26,894 -
Trade creditors 1,388,558 1,586,591
Corporation tax 501,912 594,692
Social security and other taxes 37,216 49,848
VAT 363,429 395,605
Other creditors 8,353 7,749
Directors' current accounts 2,889 2,309
Accrued expenses 279,266 137,126
2,608,517 2,773,920

17. CREDITORS: AMOUNTS FALLING DUE AFTER MORE THAN ONE
YEAR
2023 2022
as restated
£    £   
Hire purchase contracts (see note 18) 2,241 -

18. LEASING AGREEMENTS

Minimum lease payments fall due as follows:

Hire purchase contracts
2023 2022
as restated
£    £   
Net obligations repayable:
Within one year 26,894 -
Between one and five years 2,241 -
29,135 -

Advanced Pallet Systems Ltd (Registered number: 04568580)

Notes to the Financial Statements - continued
for the Year Ended 31 August 2023


18. LEASING AGREEMENTS - continued

Non-cancellable operating leases
2023 2022
as restated
£    £   
Within one year 67,088 138,800
Between one and five years - 67,500
67,088 206,300

19. SECURED DEBTS

The following secured debts are included within creditors:

2023 2022
as restated
£    £   
Hire purchase contracts 29,135 -

The hire purchase contracts are secured over the assets to which they relate.

20. PROVISIONS FOR LIABILITIES
2023 2022
as restated
£    £   
Deferred tax 197,056 90,686

Deferred
tax
£   
Balance at 1 September 2022 90,686
Deferred tax charge for year 106,370
Balance at 31 August 2023 197,056

Deferred tax is in respect of accelerated capital allowances and is not expected to change significantly in the year to 31 August 2024.

Advanced Pallet Systems Ltd (Registered number: 04568580)

Notes to the Financial Statements - continued
for the Year Ended 31 August 2023


21. CALLED UP SHARE CAPITAL

Allotted, issued and fully paid:
Number: Class: Nominal 2023 2022
value: as restated
£    £   
200 Ordinary A £1 200 200
11 Ordinary B £1 11 11
1 Ordinary C £1 1 1
212 212

Shares rank equally for voting purposes. On a show of hands each member shall have one vote and on a poll each member shall have one vote per share held. The voting rights are more particularly described in the Articles of Association.

There are no rights, preferences or restrictions including restrictions on the payment of dividends and the repayment of capital on shares.

22. RESERVES
Retained
earnings
£   

At 1 September 2022 3,348,839
Prior year adjustment 218,928
3,567,767
Profit for the year 3,942,141
Dividends (2,706,328 )
At 31 August 2023 4,803,580

23. PENSION COMMITMENTS

The company operates a defined contribution pension scheme. The assets of the scheme are held separately from those of the company in an independently administered fund. The pension cost and charge represents contributions payable by the company to the fund and amounted to £222,617 (2022 - £31,328).

24. CAPITAL COMMITMENTS
2023 2022
as restated
£    £   
Contracted but not provided for in the
financial statements 81,326 -

Advanced Pallet Systems Ltd (Registered number: 04568580)

Notes to the Financial Statements - continued
for the Year Ended 31 August 2023


25. DIRECTORS' ADVANCES, CREDITS AND GUARANTEES

The following advances and credits to directors subsisted during the years ended 31 August 2023 and 31 August 2022:

2023 2022
as restated
£    £   
Mr A J R Bowes and Mrs K Bowes
Balance outstanding at start of year 1,565 2,100
Amounts repaid (936 ) (535 )
Amounts written off - -
Amounts waived - -
Balance outstanding at end of year 629 1,565

The maximum overdrawn balance during the year was £1,565.

The loans were interest free and had no fixed date for repayment.

26. RELATED PARTY DISCLOSURES

During the year, total dividends of £2,706,328 (2022 - £4,206,328) were paid to the directors .

During the year the company made purchases of £64,598 (2022 - £36,411) from Four Square Bowes Ltd, a company controlled by the directors. The transactions were carried out at arms length in the normal course of business. At the balance sheet date £17,330 (2022 - £10,400) was outstanding.

During the year the company was charged rent of £115,008 (2022 - £104,998) by Bowes Family Pension Trust, a trust controlled by the directors. The transactions were carried out at arms length in the normal course of business. At the balance sheet date £nil (2022 - £nil) was outstanding.

The total compensation payable for the year to those individuals whom the directors consider to be key management personnel was £216,486 (2022 - £37,596).

27. POST BALANCE SHEET EVENTS

Since the balance sheet date the company has renewed the lease to occupy the premises for a further 10 years at an initial annual rental of £150,000, increasing by 5% every second year.

28. ULTIMATE CONTROLLING PARTY

The ultimate controlling party is the directors.

Advanced Pallet Systems Ltd (Registered number: 04568580)

Notes to the Financial Statements - continued
for the Year Ended 31 August 2023


29. RECONCILIATION OF PROFIT BEFORE TAXATION TO CASH GENERATED FROM
OPERATIONS
2023 2022
as restated
£    £   
Profit before taxation 5,026,243 5,690,687
Depreciation charges 264,222 198,861
Profit on disposal of fixed assets (30,342 ) (15,080 )
Finance costs 879 -
Finance income (51,004 ) (7,747 )
5,209,998 5,866,721
Increase in stocks (99,307 ) (464,642 )
Decrease/(increase) in trade and other debtors 559,744 (1,135,903 )
(Decrease)/increase in trade and other creditors (100,976 ) 517,133
Cash generated from operations 5,569,459 4,783,309

30. CASH AND CASH EQUIVALENTS

The amounts disclosed on the Cash Flow Statement in respect of cash and cash equivalents are in respect of these Balance Sheet amounts:

Year ended 31 August 2023
31.8.23 1.9.22
£    £   
Cash and cash equivalents 2,541,468 1,487,883
Year ended 31 August 2022
31.8.22 1.9.21
as restated
£    £   
Cash and cash equivalents 1,487,883 1,676,388


31. ANALYSIS OF CHANGES IN NET FUNDS

Other
non-cash
At 1.9.22 Cash flow changes At 31.8.23
£    £    £    £   
Net cash
Cash at bank
and in hand 1,487,883 1,053,585 2,541,468
1,487,883 1,053,585 2,541,468
Debt
Finance leases - 24,653 (53,788 ) (29,135 )
- 24,653 (53,788 ) (29,135 )
Total 1,487,883 1,078,238 (53,788 ) 2,512,333