Company Registration No. 05478352 (England and Wales)
AMS NEVE LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
PM+M Solutions for Business LLP
Chartered Accountants
New Century House
Greenbank Technology Park
Challenge Way
Blackburn
Lancashire
BB1 5QB
AMS NEVE LIMITED
COMPANY INFORMATION
Director
Mr Mark Crabtree OBE
Company number
05478352
Registered office
Head Office
Billington Road
Burnley
Lancashire
BB11 5UB
Auditor
PM+M Solutions for Business LLP
New Century House
Greenbank Technology Park
Challenge Way
Blackburn
Lancashire
BB1 5QB
AMS NEVE LIMITED
CONTENTS
Page
Strategic report
1 - 2
Director's report
3
Independent auditor's report
4 - 7
Statement of income and retained earnings
8
Balance sheet
9
Notes to the financial statements
10 - 23
AMS NEVE LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
- 1 -
The director presents the strategic report for the year ended 31 December 2023.
Fair review of the business
The principal activity of AMS Neve is the design, manufacture, supply and support of professional audio equipment. The company is a world renowned, dedicated, engineering-led business whose aim is to provide the best possible sound, capability and operational experience for the most creative people in the world – whether it be for film, recorded music, or TV and broadcast.
The company designs and builds all its products in England and prides itself on ensuring high quality and performance, continuously investing in research and development to offer the most effective technology to its markets and building on its excellent long term relationships with its customers.
Principal risks and uncertainties
The company's operations expose it to a variety of financial risks, price risk, interest rate risk and credit risks. The group's policy in respect of managing financial risk has not changed significantly in the year ended 31 December 2023.
The company is exposed to price risk principally in respect of certain materials required in the production of consoles. The company actively monitors price fluctuations to manage the purchase of materials where possible in times when prices are favourable to the business.
The company is no longer exposed to any significant interest rate risk as borrowings are on fixed rates.
Where appropriate, relevant credit checks are performed on potential customers before sales are made. The amount of exposure to any given customer is controlled by means of credit control procedures that are monitored closely by management.
The extent of these risks is regularly reviewed and assessed by management. This process is effective given the size and nature of the risks involved, but will be reviewed in the future should circumstances change.
AMS NEVE LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 2 -
Key performance indicators
The director is pleased to report that the company achieved another profitable year in 2023, leading to further strengthening of the Balance Sheet; total equity increased by 27% from £6.7m to £8.5m. 2023 has been a year of consolidation following the significant increase in sales in the previous year. Sales in the first half of 2024 continue to be strong.
Turnover during 2023 showed a small decrease on 2022, due to the timing of sales of larger units and a general consolidation form the previous year. Gross margin percentage has slightly increased despite cost pressures. Expenses have been tightly controlled with a modest increase. These factors have resulted in a profit before tax of £2,431,103 (2022 - £2,495,124).
The company has continued to invest heavily in both research and development and tangible fixed assets during the financial year with a continued drive to develop new and enhanced products and to enable increased manufacturing capacity and efficiency.
The company continues to be recognised as an international leader and pioneer in its field and will continue to seek opportunities to strengthen that position.
Mr Mark Crabtree OBE
Director
23 September 2024
AMS NEVE LIMITED
DIRECTOR'S REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
- 3 -
The director presents his annual report and financial statements for the year ended 31 December 2023.
Principal activities
The company's principal activity is the design, manufacture, supply and support of professional audio equipment.
Director
The director who held office during the year and up to the date of signature of the financial statements was as follows:
Mr Mark Crabtree OBE
Results and dividends
The results for the year are set out on page 8.
Ordinary dividends were paid amounting to £250,000. The director does not recommend payment of a final dividend.
No preference dividends were paid.
Auditor
The auditor, PM+M Solutions for Business LLP, is deemed to be reappointed under section 487(2) of the Companies Act 2006.
Statement of director's responsibilities
The director is responsible for preparing the annual report and the financial statements in accordance with applicable law and regulations.
Company law requires the director to prepare financial statements for each financial year. Under that law the director has 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 director must not approve the financial statements unless he is 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 director is required to:
select suitable accounting policies and then apply them consistently;
make judgements and accounting estimates that are reasonable and prudent;
prepare the financial statements on the going concern basis unless it is inappropriate to presume that the company will continue in business.
The director is 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. He is 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.
Statement of disclosure to auditor
So far as the director at the date of approving this report is aware, there is no relevant audit information of which the company’s auditor is unaware. Additionally, the director has taken all the necessary steps that he ought to have taken as director in order to make himself aware of all relevant audit information and to establish that the company’s auditor is aware of that information.
On behalf of the board
Mr Mark Crabtree OBE
Director
23 September 2024
AMS NEVE LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBER OF AMS NEVE LIMITED
- 4 -
Opinion
We have audited the financial statements of AMS Neve Limited (the 'company') for the year ended 31 December 2023 which comprise the statement of income and retained earnings, 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 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 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.
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 director's 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 director 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 director is 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 director's report for the financial year for which the financial statements are prepared is consistent with the financial statements; and
the strategic report and the director's report have been prepared in accordance with applicable legal requirements.
AMS NEVE LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBER OF AMS NEVE LIMITED
- 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 director's report.
We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to report to you if, in our opinion:
adequate accounting records have not been kept, or returns adequate for our audit have not been received from branches not visited by us; or
the financial statements are not in agreement with the accounting records and returns; or
certain disclosures of remuneration specified by law are not made; or
we have not received all the information and explanations we require for our audit.
Responsibilities of director
As explained more fully in the director's responsibilities statement, the director is 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 director determines 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 director is 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 director either intends to liquidate the company or to cease operations, or has 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.
Extent to which the audit was considered capable of detecting irregularities, including fraud
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud, is detailed below.
We identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, and then design and perform audit procedures responsive to those risks, including obtaining audit evidence that is sufficient and appropriate to provide a basis for our opinion.
AMS NEVE LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBER OF AMS NEVE LIMITED
- 6 -
Identifying and assessing potential risks related to irregularities
In identifying and assessing risks of material misstatement in respect of irregularities, including fraud and non-compliance with laws and regulations, we have considered the following:
the nature of the industry and sector, control environment and business performance including the design of the Company's remuneration policies, key drivers for directors’ remuneration, bonus levels and performance targets;
results of our enquiries of management about their own identification and assessment of the risks of irregularities;
the matters discussed among the audit engagement team and relevant specialists regarding how and where fraud might occur in the financial statements and any potential indicators of fraud;
any matters we identified having obtained and reviewed the Company's documentation of their policies and procedures relating to:
identifying, evaluating and complying with laws and regulations and whether they were aware of any instances of non-compliance;
detecting and responding to the risks of fraud and whether they have knowledge of any actual, suspected or alleged fraud;
the internal controls established to mitigate risks of fraud or non-compliance with laws and regulations.
As a result of these procedures, we considered the opportunities and incentives that may exist within the organisation for fraud and identified the greatest potential for fraud in the following areas: timing of recognition of commercial income, posting of unusual journals and complex transactions; and manipulating the Company's performance profit measures and other key performance indicators to meet remuneration targets and externally communicated targets. In common with all audits under ISAs (UK), we are also required to perform specific procedures to respond to the risk of management override.
We also obtained an understanding of the legal and regulatory frameworks that the Company operates in, focusing on provisions of those laws and regulations that had a direct effect on the determination of material amounts and disclosures in the financial statements. The key laws and regulations we considered in this context included UK Companies Act, employment law, health and safety regulations, pensions legislation and tax legislation.
AMS NEVE LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBER OF AMS NEVE LIMITED
- 7 -
Audit response to risks identified
Our procedures to respond to risks identified included the following:
reviewing the financial statement disclosures and testing to supporting documentation to assess compliance with provisions of relevant laws and regulations described as having a direct effect on the financial statements;
enquiring of management concerning actual and potential litigation and claims;
performing analytical procedures to identify any unusual or unexpected relationships that may indicate risks of material misstatement due to fraud;
reading minutes of meetings of those charged with governance and reviewing correspondence with HMRC; and
in addressing the identified risks of fraud through management override of controls, 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.
Our procedures did not identify any matters material to the financial statements.
Owing to the inherent limitations of an audit, there is an unavoidable risk that we may not have detected some material misstatements in the financial statements, even though we have properly planned and performed our audit in accordance with auditing standards. For example, the further removed non-compliance with laws and regulations (irregularities) is from the events and transactions reflected in the financial statements, the less likely the inherently limited procedures required by auditing standards would identify it. In addition, as with any audit, there remained a higher risk of non-detection of irregularities, as these may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal controls. We are not responsible for preventing non-compliance and cannot be expected to detect non-compliance with all laws and regulations.
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 member 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 member those matters we are required to state to the member 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 member, for our audit work, for this report, or for the opinions we have formed.
Nigel Wright BSc FCA
Senior Statutory Auditor
For and on behalf of PM+M Solutions for Business LLP
23 September 2024
Chartered Accountants
Statutory Auditor
New Century House
Greenbank Technology Park
Challenge Way
Blackburn
Lancashire
BB1 5QB
AMS NEVE LIMITED
STATEMENT OF INCOME AND RETAINED EARNINGS
FOR THE YEAR ENDED 31 DECEMBER 2023
- 8 -
2023
2022
Notes
£
£
Turnover
3
13,070,559
13,335,085
Cost of sales
(7,497,188)
(7,774,903)
Gross profit
5,573,371
5,560,182
Administrative expenses
(3,173,853)
(3,095,731)
Other operating income
35,000
35,000
Operating profit
4
2,434,518
2,499,451
Interest payable and similar expenses
7
(3,415)
(4,327)
Profit before taxation
2,431,103
2,495,124
Tax on profit
8
(361,661)
(207,338)
Profit for the financial year
2,069,442
2,287,786
Retained earnings brought forward
4,734,561
3,646,775
Dividends
9
(250,000)
(1,200,000)
Retained earnings carried forward
6,554,003
4,734,561
The Statement of Income and Retained Earnings has been prepared on the basis that all operations are continuing operations.
AMS NEVE LIMITED
BALANCE SHEET
AS AT 31 DECEMBER 2023
31 December 2023
- 9 -
2023
2022
Notes
£
£
£
£
Fixed assets
Tangible assets
11
3,117,391
2,810,576
Investments
12
1
1
3,117,392
2,810,577
Current assets
Stocks
14
6,389,118
5,242,009
Debtors
15
534,547
571,151
Cash at bank and in hand
1,129,343
1,385,176
8,053,008
7,198,336
Creditors: amounts falling due within one year
16
(2,233,762)
(2,928,233)
Net current assets
5,819,246
4,270,103
Total assets less current liabilities
8,936,638
7,080,680
Creditors: amounts falling due after more than one year
17
(55,587)
Provisions for liabilities
Provisions
19
60,994
60,994
Deferred tax liability
21
342,234
250,131
(403,228)
(311,125)
Net assets
8,533,410
6,713,968
Capital and reserves
Called up share capital
22
1,979,407
1,979,407
Profit and loss reserves
6,554,003
4,734,561
Total equity
8,533,410
6,713,968
These financial statements have been prepared in accordance with the provisions relating to medium-sized companies.
The financial statements were approved and signed by the director and authorised for issue on 23 September 2024
Mr Mark Crabtree OBE
Director
Company registration number 05478352 (England and Wales)
AMS NEVE LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
- 10 -
1
Accounting policies
Company information
AMS Neve Limited is a private company limited by shares incorporated in England and Wales. The registered office is Head Office, Billington Road, Burnley, Lancashire, BB11 5UB.
1.1
Accounting convention
These financial statements have been prepared in accordance with FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” (“FRS 102”) and the requirements of the Companies Act 2006.
The financial statements are prepared in sterling, which is the functional currency of the company. Monetary amounts in these financial statements are rounded to the nearest £.
The financial statements have been prepared under the historical cost convention. The principal accounting policies adopted are set out below.
This company is a qualifying entity for the purposes of FRS 102, being a member of a group where the parent of that group prepares publicly available consolidated financial statements, including this company, which are intended to give a true and fair view of the assets, liabilities, financial position and profit or loss of the group. The company has therefore taken advantage of exemptions from the following disclosure requirements:
Section 7 ‘Statement of Cash Flows’: Presentation of a statement of cash flow and related notes and disclosures;
Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instrument Issues: The disclosure requirements of paragraphs 11.42, 11.44, 11.45, 11.47, 11.48(a)(iii), 11.48(a)(iv), 11.48(b), 11.48(c), 12.26, 12.27, 12.29(a), 12.29(b), and 12.29A;
Section 33 ‘Related Party Disclosures’: Compensation for key management personnel.
The financial statements of the company are consolidated in the financial statements of Engledene Limited. These consolidated financial statements are available from its registered office, which is the same as this company.
The company has taken advantage of the exemption under section 400 of the Companies Act 2006 not to prepare consolidated accounts. The financial statements present information about the company as an individual entity and not about its group.
AMS Neve Limited is a wholly owned subsidiary of Engledene Limited and the results of AMS Neve Limited are included in the consolidated financial statements of Engledene Limited which are available from the registered address.
1.2
Going concern
Atruet the time of approving the financial statements, the director has a reasonable expectation that the company has adequate resources to continue in operational existence for the foreseeable future. Thus the director continues to adopt the going concern basis of accounting in preparing the financial statements.
1.3
Turnover
Turnover is recognised at the fair value of the consideration received or receivable for goods and services provided in the normal course of business, and is shown net of VAT and other sales related taxes. The fair value of consideration takes into account trade discounts, settlement discounts and volume rebates.
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.
AMS NEVE LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 11 -
1.4
Intangible fixed assets
Intangible assets are initially recognised at cost. After recognition, under the cost model, intangible assets are measured at cost less any accumulated amortisation and any accumulated impairment losses.
All intangible assets are considered to have a finite useful life. If a reliable estimate of the useful life cannot be made, the useful life shall not exceed ten years.
1.5
Tangible fixed assets
Tangible fixed assets are initially measured at cost and subsequently measured at cost or valuation, net of depreciation and any impairment losses.
Depreciation is recognised so as to write off the cost or valuation of assets less their residual values over their useful lives, using the straight line method, on the following bases:
Freehold land and buildings
50 years and 20% straight line for improvements
Plant and equipment
20% and 33% straight line for tooling
Fixtures and fittings
33% straight line
Office equipment
33% straight line
Motor vehicles
20% 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.
1.6
Fixed asset investments
Interests in subsidiaries are initially measured at cost and subsequently measured at cost less any accumulated impairment losses. The investments are assessed for impairment at each reporting date and any impairment losses or reversals of impairment losses are recognised immediately in profit or loss.
A subsidiary is an entity controlled by the company. Control is the power to govern the financial and operating policies of the entity so as to obtain benefits from its activities.
1.7
Impairment of fixed assets
At each reporting period end date, the company reviews the carrying amounts of its tangible and intangible 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.
1.8
Stocks
Stocks are stated at the lower of cost and net realisable value, being the estimated selling price less costs to complete and sell. Cost is based on the cost of purchase on a standard costing basis. Work in progress and finished goods include labour and attributable overheads.
At each reporting date, an assessment is made for impairment. Any excess of the carrying amount of stocks over its estimated selling price less costs to complete and sell is recognised as an impairment loss in profit or loss. Reversals of impairment losses are also recognised in profit or loss.
1.9
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.
AMS NEVE LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 12 -
1.10
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.
Basic financial assets
Basic financial assets, which include debtors and cash and bank balances, are initially measured at transaction price including transaction costs and are subsequently carried at amortised cost using the effective interest method unless the arrangement constitutes a financing transaction, where the transaction is measured at the present value of the future receipts discounted at a market rate of interest. Financial assets classified as receivable within one year are not amortised.
Other financial assets
Other financial assets, including investments in equity instruments which are not subsidiaries, associates or joint ventures, are initially measured at fair value, which is normally the transaction price. Such assets are subsequently carried at fair value and the changes in fair value are recognised in profit or loss, except that investments in equity instruments that are not publicly traded and whose fair values cannot be measured reliably are measured at cost less impairment.
Impairment of financial assets
Financial assets, other than those held at fair value through profit and loss, are assessed for indicators of impairment at each reporting end date.
Financial assets are impaired where there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial asset, the estimated future cash flows have been affected. If an asset is impaired, the impairment loss is the difference between the carrying amount and the present value of the estimated cash flows discounted at the asset’s original effective interest rate. The impairment loss is recognised in profit or loss.
If there is a decrease in the impairment loss arising from an event occurring after the impairment was recognised, the impairment is reversed. The reversal is such that the current carrying amount does not exceed what the carrying amount would have been, had the impairment not previously been recognised. The impairment reversal is recognised in profit or loss.
Derecognition of financial assets
Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire or are settled, or when the company transfers the financial asset and substantially all the risks and rewards of ownership to another entity, or if some significant risks and rewards of ownership are retained but control of the asset has transferred to another party that is able to sell the asset in its entirety to an unrelated third party.
Classification of financial liabilities
Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the company after deducting all of its liabilities.
AMS NEVE LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 13 -
Basic financial liabilities
Basic financial liabilities, including creditors, bank loans and loans from fellow group companies 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.
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.
Derecognition of financial liabilities
Financial liabilities are derecognised when the company’s contractual obligations expire or are discharged or cancelled.
1.11
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.
1.12
Taxation
The tax expense represents the sum of the tax currently payable and deferred tax.
Current tax
The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the profit and loss account because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The company’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.
Deferred tax
Deferred tax liabilities are generally recognised for all timing differences and deferred tax assets are recognised to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits. Such assets and liabilities are not recognised if the timing difference arises from goodwill or from the initial recognition of other assets and liabilities in a transaction that affects neither the tax profit nor the accounting profit.
The carrying amount of deferred tax assets is reviewed at each reporting end date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realised. Deferred tax is charged or credited in the profit and loss account, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity. Deferred tax assets and liabilities are offset when the company has a legally enforceable right to offset current tax assets and liabilities and the deferred tax assets and liabilities relate to taxes levied by the same tax authority.
AMS NEVE LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 14 -
1.13
Provisions
Provisions are recognised when the company has a legal or constructive present obligation as a result of a past event, it is probable that the company will be required to settle that obligation and a reliable estimate can be made of the amount of the obligation.
The amount recognised as a provision is the best estimate of the consideration required to settle the present obligation at the reporting end date, taking into account the risks and uncertainties surrounding the obligation. Where the effect of the time value of money is material, the amount expected to be required to settle the obligation is recognised at present value. When a provision is measured at present value, the unwinding of the discount is recognised as a finance cost in profit or loss in the period in which it arises.
1.14
Employee benefits
The costs of short-term employee benefits are recognised as a liability and an expense, unless those costs are required to be recognised as part of the cost of stock or fixed assets.
The cost of any unused holiday entitlement is recognised in the period in which the employee’s services are received.
Termination benefits are recognised immediately as an expense when the company is demonstrably committed to terminate the employment of an employee or to provide termination benefits.
1.15
Retirement benefits
Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.
1.16
Leases
Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessees. All other leases are classified as operating leases.
Assets held under finance leases are recognised as assets at the lower of the assets fair value at the date of inception and the present value of the minimum lease payments. The related liability is included in the balance sheet as a finance lease obligation. Lease payments are treated as consisting of capital and interest elements. The interest is charged to profit or loss so as to produce a constant periodic rate of interest on the remaining balance of the liability.
Rentals payable under operating leases, including any lease incentives received, are charged to profit or loss on a straight line basis over the term of the relevant lease except where another more systematic basis is more representative of the time pattern in which economic benefits from the leases asset are consumed.
Rental income from operating leases is recognised on a straight line basis over the term of the relevant lease. Initial direct costs incurred in negotiating and arranging an operating lease are added to the carrying amount of the leased asset and recognised on a straight line basis over the lease term.
1.17
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.
1.18
Provision is made for the estimated cost of rectification of products sold which are still covered by unexpired contractual warranties.
AMS NEVE LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 15 -
1.19
Research and development expenditure
Research expenditure is written off against profits in the year in which it is incurred. Identifiable development expenditure is capitalised to the extent that the technical, commercial and financial feasibility can be demonstrated.
2
Judgements and key sources of estimation uncertainty
In the application of the company’s accounting policies, the director is 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.
The main areas of judgement, that have a risk of causing material adjustment to the carrying amounts of assets and liabilities within the next financial year, are in relation to stock and debtor provisions, and the useful economic lives of the company's fixed assets.
3
Turnover
2023
2022
£
£
Turnover analysed by geographical market
UK
1,653,659
1,233,822
Europe
2,621,130
2,925,362
Rest of World
8,795,770
9,175,901
13,070,559
13,335,085
4
Operating profit
2023
2022
Operating profit for the year is stated after charging/(crediting):
£
£
Exchange (gains)/losses
40,024
(35,788)
Fees payable to the company's auditor for the audit of the company's financial statements
11,000
10,400
Depreciation of owned tangible fixed assets
499,778
442,889
Depreciation of tangible fixed assets held under finance leases
38,150
53,587
Operating lease charges
25,413
25,862
AMS NEVE LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 16 -
5
Employees
The average monthly number of persons (including directors) employed by the company during the year was:
2023
2022
Number
Number
Production
59
60
Sales & marketing
5
5
Research & development
18
18
Administration
9
9
Director
1
1
Total
92
93
Their aggregate remuneration comprised:
2023
2022
£
£
Wages and salaries
2,985,905
2,732,092
Social security costs
267,976
251,341
Pension costs
60,027
54,027
3,313,908
3,037,460
6
Director's remuneration
2023
2022
£
£
Remuneration for qualifying services
156,841
154,704
7
Interest payable and similar expenses
2023
2022
£
£
Interest on finance leases and hire purchase contracts
3,415
4,327
8
Taxation
2023
2022
£
£
Current tax
UK corporation tax on profits for the current period
269,558
162,239
AMS NEVE LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
8
Taxation
2023
2022
£
£
(Continued)
- 17 -
Deferred tax
Origination and reversal of timing differences
92,103
45,099
Total tax charge
361,661
207,338
The actual charge for the year can be reconciled to the expected charge for the year based on the profit or loss and the standard rate of tax as follows:
2023
2022
£
£
Profit before taxation
2,431,103
2,495,124
Expected tax charge based on the standard rate of corporation tax in the UK of 23.52% (2022: 19.00%)
571,795
474,074
Tax effect of expenses that are not deductible in determining taxable profit
1,397
880
Deferred tax impact of future increase in tax rate
5,452
10,823
Group relief
(63,993)
(146,595)
Depreciation on assets not qualifying for tax allowances
26,080
(24,307)
Research and development tax credit
(240,242)
(246,990)
Payment/(receipt) of group relief
61,172
139,453
Taxation charge for the year
361,661
207,338
9
Dividends
2023
2022
£
£
Interim paid
250,000
1,200,000
AMS NEVE LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 18 -
10
Intangible fixed assets
Goodwill
£
Cost
At 1 January 2023 and 31 December 2023
1,462,412
Amortisation and impairment
At 1 January 2023 and 31 December 2023
1,462,412
Carrying amount
At 31 December 2023
At 31 December 2022
11
Tangible fixed assets
Freehold land and buildings
Plant and equipment
Fixtures and fittings
Office equipment
Motor vehicles
Total
£
£
£
£
£
£
Cost
At 1 January 2023
2,503,331
2,819,081
380,413
1,009,562
124,970
6,837,357
Additions
188,360
510,404
82,076
69,448
850,288
Transfers
(5,545)
(5,545)
At 31 December 2023
2,691,691
3,329,485
462,489
1,073,465
124,970
7,682,100
Depreciation and impairment
At 1 January 2023
593,958
2,087,706
308,842
916,732
119,543
4,026,781
Depreciation charged in the year
134,098
280,678
57,401
61,410
4,341
537,928
At 31 December 2023
728,056
2,368,384
366,243
978,142
123,884
4,564,709
Carrying amount
At 31 December 2023
1,963,635
961,101
96,246
95,323
1,086
3,117,391
At 31 December 2022
1,909,373
731,375
71,571
92,830
5,427
2,810,576
The net carrying value of tangible fixed assets includes the following in respect of assets held under finance leases or hire purchase contracts.
2023
2022
£
£
Plant and equipment
111,271
149,421
AMS NEVE LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 19 -
12
Fixed asset investments
2023
2022
Notes
£
£
Investments in subsidiaries
13
1
1
Movements in fixed asset investments
Shares in group undertakings
£
Cost or valuation
At 1 January 2023 & 31 December 2023
1
Carrying amount
At 31 December 2023
1
At 31 December 2022
1
13
Subsidiaries
Details of the company's subsidiaries at 31 December 2023 are as follows:
Name of undertaking
Registered
Nature of business
Class of
% Held
office
shares held
Direct
Neve Electronics Limited
As AMS Neve Limited
Dormant
Ordinary
100
14
Stocks
2023
2022
£
£
Raw materials and consumables
3,978,843
3,169,205
Work in progress
1,198,793
1,362,172
Finished goods and goods for resale
1,211,482
710,632
6,389,118
5,242,009
AMS NEVE LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 20 -
15
Debtors
2023
2022
Amounts falling due within one year:
£
£
Trade debtors
225,538
325,245
Amounts owed by group undertakings
28,451
10,225
Other debtors
158,399
120,705
Prepayments and accrued income
122,159
114,976
534,547
571,151
16
Creditors: amounts falling due within one year
2023
2022
Notes
£
£
Obligations under finance leases
18
55,587
60,640
Payments received on account
947,885
1,691,045
Trade creditors
553,111
747,971
Amounts owed to group undertakings
61,172
139,453
Corporation tax
208,386
22,786
Other taxation and social security
66,509
65,174
Deferred income
22,973
6,450
Other creditors
14,620
14,286
Accruals and deferred income
303,519
180,428
2,233,762
2,928,233
17
Creditors: amounts falling due after more than one year
2023
2022
Notes
£
£
Obligations under finance leases
18
55,587
18
Finance lease obligations
2023
2022
Future minimum lease payments due under finance leases:
£
£
Within one year
55,587
60,640
In two to five years
55,587
55,587
116,227
The finance lease obligations are secured over the assets to which they relate.
Finance lease payments represent rentals payable by the company for certain items of plant and machinery. Leases include purchase options at the end of the lease period, and no restrictions are placed on the use of the assets. The average lease term is 3 years. All leases are on a fixed repayment basis and no arrangements have been entered into for contingent rental payments.
AMS NEVE LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 21 -
19
Provisions for liabilities
2023
2022
£
£
Warranty provision
60,994
60,994
Movements on provisions:
Warranty provision
£
At 1 January 2023 and 31 December 2023
60,994
Provision is made for the estimated cost of rectification of products sold which are still covered by unexpired contractual warranties.
20
Retirement benefit schemes
2023
2022
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
60,027
54,027
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.
An amount of £12,036 (2022- £11,142) was outstanding at the year end and is included in creditors.
21
Deferred taxation
The following are the major deferred tax liabilities and assets recognised by the company and movements thereon:
Liabilities
Liabilities
2023
2022
Balances:
£
£
Accelerated capital allowances
343,515
251,349
Short term timing differences
(1,281)
(1,218)
342,234
250,131
AMS NEVE LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
21
Deferred taxation
(Continued)
- 22 -
2023
Movements in the year:
£
Liability at 1 January 2023
250,131
Charge to profit or loss
92,103
Liability at 31 December 2023
342,234
The deferred tax liability set out above relates mainly to accelerated capital allowances and is not expected to change significantly in the next 12 months due to continued fixed asset investment.
22
Share capital
2023
2022
2023
2022
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary Shares of £1 each
1,000
1,000
1,000
1,000
2023
2022
2023
2022
Preference share capital
Number
Number
£
£
Issued and fully paid
Shares of £1 each
1,978,407
1,978,407
1,978,407
1,978,407
Preference shares classified as equity
1,978,407
1,978,407
Total equity share capital
1,979,407
1,979,407
The shares shall confer on their holders the following rights:
Ordinary Shares
- Full voting rights, with a ranking behind Preference Shares on a return of capital.
Preference Shares
- As to capital, the right, on winding-up or other return of capital, to repayment, in priority to any payment to the holders of any other shares in the capital of the company of the amounts paid up on the Preference Shares held by them including any premium;
- As to other rights, the right to receive notice of, to be present and speak either in person or by proxy, at any general meeting of the company but not to have any voting rights whatsoever at any general working of the company nor the right to participate in any written resolution.
AMS NEVE LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 23 -
23
Operating lease commitments
Lessee
At the reporting end date the company had outstanding commitments for future minimum lease payments under non-cancellable operating leases, which fall due as follows:
2023
2022
£
£
Within one year
24,000
24,000
Lessor
At the reporting end date the company had contracted with tenants for the following minimum lease payments:
2023
2022
£
£
Within one year
17,500
30,000
Between two and five years
17,500
17,500
47,500
24
Related party transactions
Transactions with related parties
During the year the company entered into the following transactions with related parties:
As permitted by FRS102, the financial statements do not disclose transactions with the parent company and fellow subsidiaries where 100% of the voting rights are controlled within the group.
The company purchased goods amounting to £30,744 (2022 - £24,000) from a company controlled by the director.
The company pays royalties for the use of intellectual property rights held by the company pension scheme, of which the director is a trustee and member. During the year royalties and other related amounts were charged to the company amounting to £456,756 (2022 - £495,542). Engineering costs amounting to £97,240 (2022 - £131,560) were recharged to the company pension scheme.
25
Directors' transactions
Included within other debtors at the year ended 31 December 2023, is a balance of £5,069 (2022: £3,413) that was owed by a director of the company. The maximum outstanding balance in the year was £5,069 (2022: £13,396).
26
Ultimate controlling party
The parent company, which is also the ultimate holding company, is Engledene Limited. The registered office is the same as this company. Consolidated accounts have been prepared for the group and are available at Companies House.
The ultimate controlling party is Mr Mark Crabtree OBE.
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