Company registration number 02360563 (England and Wales)
ADAPTAINER LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
ADAPTAINER LIMITED
COMPANY INFORMATION
Directors
J Clark
P Clark
Company number
02360563
Registered office
166 College Road
Harrow
Middlesex
HA1 1RA
Auditors
Charterhouse (Audit) Limited
166 College Road
Harrow
Middlesex
HA1 1RA
Business address
Reliant House
3 Angel Lane
Fore Street
Ipswich
Suffolk
IP4 1JX
ADAPTAINER LIMITED
CONTENTS
Page
Strategic report
1 - 2
Directors' report
3 - 4
Independent auditor's report
5 - 7
Statement of comprehensive income
8
Balance sheet
9
Statement of changes in equity
10
Statement of cash flows
11
Notes to the financial statements
12 - 24
ADAPTAINER LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
- 1 -
The directors present the strategic report for the year ended 31 December 2023.
Review of the business
The results for the year and the financial position at the year end were considered satisfactory by the directors.
It is the directors’ intention to promote growth in the business by increasing its market share through extensive marketing and by developing innovative products which are not available from its competitors such as Adaptainer’s patented XL Vent system, at the same time as investing in increasing hire fleet.
Principal risks and uncertainties
The management of the business and the execution of the company’s strategies are subject to risk, the key risks being supply chain conditions, foreign exchange fluctuations, wider economic conditions and competition in the marketplace. The board of directors closely monitors the performance of the business on a continuous basis and takes ongoing steps to mitigate these risks.
Financial risks and uncertanities
The primary financial risks to the business are foreign exchange risk and liquidity risk. The directors and finance team manage these risks on an ongoing basis.
Foreign exchange
The business makes significant stock purchases in US Dollars. Exchange rate risk is managed by entering into forward contracts to purchase foreign currency at future dates and values in line with stock purchase commitments.
Liquidity
At the year end the business held significant cash balances and had a relatively small amount of asset finance borrowing. Trade debtors are managed through controlling the credit offered to customers and regular monitoring. Stock orders are phased to meet expected customer demand. Cash flow is forecast to ensure funds are available for payment of creditors to terms.
In respect of balances due from group and associated companies, the directors are aware of the individual companies' finance requirements and had determined that these will only be repaid, in whole or in part, when sufficient funds are available.
Key performance indicators
The key financial highlights are as follows:
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Earnings before interest, tax, depreciation and amortisation (EBITDA) | | |
Turnover and gross margin in the year were affected by the loss of a significant hire customer. The number of hire customers continued to increase during 2023. Despite strong price competition in the container sales market the volume of containers sold increased significantly.
The year on year reduction in EBITDA includes significant Director’s bonuses which were not paid in previous years. The results are considered acceptable considering the challenging market conditions.
ADAPTAINER LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 2 -
P Clark
Director
20 September 2024
ADAPTAINER LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
- 3 -
The directors present their annual report and financial statements for the year ended 31 December 2023.
Principal activities
The company’s principal activities during the year were the sale, hire and conversion of shipping containers. This includes skip hire, waste disposal and recycling.
Results and dividends
The results for the year are set out on page 8.
Ordinary dividends were paid amounting to £100,000. The directors do not recommend payment of a final dividend.
Directors
The directors who held office during the year and up to the date of signature of the financial statements were as follows:
C Walker
(Resigned 31 March 2023)
J Clark
P Clark
Statement of directors' responsibilities
The directors are responsible for preparing the annual report and the financial statements in accordance with applicable law and regulations.
Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with 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.
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.
Statement of disclosure to auditors
So far as each person who was a director at the date of approving this report is aware, there is no relevant audit information of which the company’s auditors are unaware. Additionally, the directors individually have taken all the necessary steps that they ought to have taken as directors in order to make themselves aware of all relevant audit information and to establish that the company’s auditors are aware of that information.
Medium-sized companies exemption
This report has been prepared in accordance with the provisions applicable to companies entitled to the medium-sized companies exemption.
ADAPTAINER LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 4 -
On behalf of the board
P Clark
Director
20 September 2024
ADAPTAINER LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF ADAPTAINER LIMITED
- 5 -
Opinion
We have audited the financial statements of Adaptainer Limited (the 'company') for the year ended 31 December 2023 which comprise the statement of comprehensive income, the balance sheet, the statement of changes in equity, the statement of cash flows and notes to the financial statements, including significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and 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 directors' use of the going concern basis of accounting in the preparation of the financial statements is appropriate.
Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the company's ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.
Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.
The other information comprises the information included in the annual report other than the financial statements and our auditor's report thereon. The directors are responsible for the other information contained within the annual report. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the course of the audit, or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.
We have nothing to report in this regard.
Opinions on other matters prescribed by the Companies Act 2006
In our opinion, based on the work undertaken in the course of our audit:
the information given in the strategic report and the directors' report for the financial year for which the financial statements are prepared is consistent with the financial statements; and
the strategic report and the directors' report have been prepared in accordance with applicable legal requirements.
ADAPTAINER LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF ADAPTAINER LIMITED
- 6 -
Matters on which we are required to report by exception
In the light of the knowledge and understanding of the company and its environment obtained in the course of the audit, we have not identified material misstatements in the strategic report or the directors' report.
We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to report to you if, in our opinion:
adequate accounting records have not been kept, or returns adequate for our audit have not been received from branches not visited by us; or
the financial statements are not in agreement with the accounting records and returns; or
certain disclosures of remuneration specified by law are not made; or
we have not received all the information and explanations we require for our audit.
Responsibilities of directors
As explained more fully in the directors' responsibilities statement, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. In preparing the financial statements, the directors are responsible for assessing the company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the company or to cease operations, or have no realistic alternative but to do so.
Auditor's responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud, is detailed below.
The extent to which the audit was considered capable of detacting irregularities including fraud
Our approach to identifying and assessing the risks of material misstatement in respect of irregularities, including fraud and non-compliance with laws and regulations, was as follows:
the client partner ensured that the engagement team collectively had the appropriate competence, capabilities and skills to identify and recognise non-compliance with applicable laws and regulations;
we identified the laws and regulations applicable to the company through discussions with directors, key management personnel and from our commercial knowledge and experience of the IT sector.
we focused on specific laws and regulations which we considered may have a direct effect on the financial statements or the operations of the company including the Companies Act 2006, current taxation legislation, data protection, anti-bribery and money laundering, employment and health and safety legislation;
we assessed the extent of compliance with the laws and regulations identified above through making enquiries of management;
identified laws and regulations were communicated within the audit team regularly and the team remained alert to instances of non-compliance throughout the audit.
We assessed the susceptibility of the company's financial statements to material misstatement, including obtaining an understanding of how fraud might occur by;
making enquiries of management as to where they considered there was susceptibility to fraud, their knowledge of actual suspected and alleged fraud; and
considering the internal controls in place to mitigate risks of fraud and non-compliance with laws and regulations.
ADAPTAINER LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF ADAPTAINER LIMITED
- 7 -
To address the risk of fraud through management bias and override of controls we have;
performed analytical procedures to identify any unusual or unexpected relationships;
tested journal entries to identify unusual transactions;
assessed whether judgements and assumptions made in determining the any accounting estimates were indicative of potential bias.
In response to the risk of irregularities and non-compliance with laws and regulations, we designed procedures which included, but were not limited to:
agreeing financial statements disclosures to underlying supporting documentation;
enquiring of management as to actual and potential litigation and claims; and
reviewing correspondence with HMRC, enquiring of management over health and safety.
There are inherent limitations in our audit procedures described above. Auditing standards also limit the audit procedures required to identifying non-compliance with laws and regulations to enquiry of the directors and other management and the inspection of regulatory and legal correspondence, if any.
Material misstatements that arise due to fraud can be harder to detect than those that arise from error as they may involve deliberate concealment or collusion.
A further description of our responsibilities is available on the Financial Reporting Council’s website at: https://www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor's report.
This report is made solely to the company's members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the company's members those matters we are required to state to them in an auditor's report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company's members as a body, for our audit work, for this report, or for the opinions we have formed.
.......................................................................
24 September 2024
Nirav Sheth (Senior Statutory Auditor)
For and on behalf of Charterhouse (Audit) Limited
Statutory Auditor
Charterhouse (Audit) Limited
166 College Road
Harrow
Middlesex
HA1 1RA
ADAPTAINER LIMITED
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2023
- 8 -
2023
2022
Notes
£
£
Turnover
3
17,659,740
18,130,067
Cost of sales
(14,174,313)
(12,238,423)
Gross profit
3,485,427
5,891,644
Administrative expenses
(3,181,689)
(2,281,171)
Other operating income
232,033
143,249
Operating profit
4
535,771
3,753,722
Interest receivable and similar income
7
31,039
489
Interest payable and similar expenses
8
(263,422)
(326,328)
Profit before taxation
303,388
3,427,883
Tax on profit
9
(130,506)
(1,362,390)
Profit for the financial year
172,882
2,065,493
The profit and loss account has been prepared on the basis that all operations are continuing operations.
ADAPTAINER LIMITED
BALANCE SHEET
AS AT
31 DECEMBER 2023
31 December 2023
- 9 -
2023
2022
Notes
£
£
£
£
Fixed assets
Tangible assets
11
3,571,199
4,694,682
Current assets
Stocks
12
6,363,729
7,302,425
Debtors
13
3,740,369
2,163,293
Cash at bank and in hand
1,969,004
2,272,647
12,073,102
11,738,365
Creditors: amounts falling due within one year
14
(3,872,775)
(3,109,031)
Net current assets
8,200,327
8,629,334
Total assets less current liabilities
11,771,526
13,324,016
Creditors: amounts falling due after more than one year
15
(1,727,510)
(3,376,033)
Provisions for liabilities
Provisions
18
280,250
273,200
Deferred tax liability
20
892,800
876,699
(1,173,050)
(1,149,899)
Net assets
8,870,966
8,798,084
Capital and reserves
Called up share capital
21
471
471
Share premium account
22
999
999
Profit and loss reserves
8,869,496
8,796,614
Total equity
8,870,966
8,798,084
These financial statements have been prepared in accordance with the provisions relating to medium-sized companies.
The financial statements were approved by the board of directors and authorised for issue on 20 September 2024 and are signed on its behalf by:
P Clark
Director
Company registration number 02360563 (England and Wales)
ADAPTAINER LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2023
- 10 -
Share capital
Share premium account
Profit and loss reserves
Total
Notes
£
£
£
£
Balance at 1 January 2022
471
999
6,731,121
6,732,591
Year ended 31 December 2022:
Profit and total comprehensive income
-
-
2,065,493
2,065,493
Balance at 31 December 2022
471
999
8,796,614
8,798,084
Year ended 31 December 2023:
Profit and total comprehensive income
-
-
172,882
172,882
Dividends
10
-
-
(100,000)
(100,000)
Balance at 31 December 2023
471
999
8,869,496
8,870,966
ADAPTAINER LIMITED
STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 DECEMBER 2023
- 11 -
2023
2022
Notes
£
£
£
£
Cash flows from operating activities
Cash (absorbed by)/generated from operations
27
(130,504)
4,413,228
Interest paid
(263,422)
(326,329)
Income taxes paid
(5,947)
Net cash (outflow)/inflow from operating activities
(399,873)
4,086,899
Investing activities
Purchase of tangible fixed assets
(806,852)
(2,186,076)
Proceeds from disposal of tangible fixed assets
2,856,327
1,048,124
Interest received
31,039
489
Net cash generated from/(used in) investing activities
2,080,514
(1,137,463)
Financing activities
Repayment of borrowings
(1,414,382)
(890,558)
Payment of finance leases obligations
(469,902)
(657,410)
Dividends paid
(100,000)
Net cash used in financing activities
(1,984,284)
(1,547,968)
Net (decrease)/increase in cash and cash equivalents
(303,643)
1,401,468
Cash and cash equivalents at beginning of year
2,272,647
871,179
Cash and cash equivalents at end of year
1,969,004
2,272,647
ADAPTAINER LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
- 12 -
1
Accounting policies
Company information
Adaptainer Limited is a private company limited by share incorporated in England and Wales. The registered office is 166 College Road, Harrow, Middlesex, HA1 1RA. The principal place of business is Reliant House, 3 Angel Lane, Fore Street, Ipswich, Suffolk, IP4 1JX.
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.
1.2
Turnover
Turnover represents amounts receivable for goods and services net of VAT and trade discounts. Income is recognised in the period to which it relates. Turnover consists of sale, hire, conversion of shipping containers and other sales.
1.3
Tangible fixed assets
Tangible fixed assets are measured at cost net of depreciation and any impairment losses.
Depreciation is recognised so as to write off the cost of assets less their residual values over their useful lives on the following bases:
Plant & machinery
20% on cost
Fixtures & fittings
20% on cost
Office & computer equipment
33% on cost
Motor vehicles
20% on cost
Maritime containers
3% to 10% on cost
The gain or loss arising on the disposal of an asset is determined as the difference between the sale proceeds and the carrying value of the asset, and is credited or charged to profit or loss.
1.4
Stocks
Stocks are stated at the lower of cost and estimated selling price less costs to complete and sell. Cost comprises direct materials and, where applicable, direct labour costs and those overheads that have been incurred in bringing the stocks to their present location and condition. Stock consists of containers.
1.5
Financial instruments
The company has elected to apply the provisions of Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instruments Issues’ of FRS 102 to all of its financial instruments.
Financial instruments are recognised in the company's balance sheet when the company becomes party to the contractual provisions of the instrument.
Financial assets and liabilities are offset, with the net amounts presented in the financial statements, when there is a legally enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously.
ADAPTAINER LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 13 -
Basic financial assets
Basic financial assets, which include debtors and cash and bank balances, are measured at transaction price including transaction costs. Financial assets classified as receivable within one year are not amortised.
Basic financial liabilities
Basic financial liabilities, including creditors, are 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.
1.6
Equity instruments
Equity instruments issued by the company are recorded at the proceeds received, net of transaction costs. Dividends payable on equity instruments are recognised as liabilities once they are no longer at the discretion of the company.
1.7
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.
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.
1.8
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.
ADAPTAINER LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 14 -
1.9
Foreign exchange
Monetary assets and liabilities denominated in foreign currencies are translated into sterling at the rates of exchange ruling at the balance sheet date. Transactions in foreign currencies are recorded at the rate ruling at the date of the transaction. All differences are taken to profit and loss account.
1.10
Retirement benefits
The company provides pension benefits for senior employees. Under the terms of the pension contracts entered into with the senior employees, fixed sums are provided for now in order to provide pension benefits to the individuals upon their retirement. The pension contracts allow for an annual increase in respect of indexation over and above the initial contracted amount.
Although under section 28 of FRS 102 this pension arrangement is regarded as being a defined benefit scheme, the directors consider that it does not bear any of the hallmarks of a defined benefit scheme as the company's contributions are fixed until the point of retirement at which point any further contributions of annual increases cease. Further information can be found in note 19 to the financial statements.
The company also provides pension benefits (defined contribution) in respect of its employees. Amounts payable are charged to the profit and loss account in the year the contracts are entered into between the company and the employees. The assets of the scheme are held separately from those of the company in an independently administered fund.
2
Judgements and key sources of estimation uncertainty
In the application of the company’s accounting policies, the directors are required to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised where the revision affects only that period, or in the period of the revision and future periods where the revision affects both current and future periods.
ADAPTAINER LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
2
Judgements and key sources of estimation uncertainty
(Continued)
- 15 -
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.
Establishing useful economic lives for depreciation of fixed assets
Fixed assets, consisting primarily of plant and machinery, fixtures and fittings, office and computer equipment, maritime containers and motor vehicles. The annual depreciation charge depends primarily on the estimated useful economic lives of each type of asset and estimated residual values. The directors regularly review these asset useful lives and change them as necessary to reflect current thinking on remaining lives in light of prospective economic utilisation and physical condition of the assets concerned. Changes in asset useful lives can have a significant impact on depreciation and amortisation charges for the period. Detail of the useful economic lives is included in the accounting policies.
Inventory provision
The company is involved in sales and hire of containers. To be able to service the customers promptly, it holds stock for a long time. As a result it is necessary to consider the recoverability of the cost of inventory and the associated provisioning required. When calculating the inventory provision, management consider the length of time a particular stock has been held for. If a stock is held for several years then a provision is made. Any significant reduction in the level of inventory provision would have a positive impact on the operating result. The level of provision required is reviewed on an on-going basis and has been disclosed in note 12.
Provision for doubtful debts
The company makes an estimate of the recoverable value of the trade and other debtors. The company uses estimates based on historical experience determining the level of debts, which the group believes, will not be collected. These estimates include such factors as the current credit rating of the debtor, the ageing profile of the debtors and historical experience. Any significant reduction in the level of customers that default on payments or other significant improvements that resulted in a reduction in the level of bad debt provision would have a positive impact on the operating results. The level of provision required is reviewed on an on-going basis and is disclosed in note 13.
3
Turnover and other revenue
An analysis of the company's turnover is as follows:
2023
2022
£
£
Turnover analysed by class of business
Container sales
15,770,893
15,488,335
Container hire
1,705,968
2,641,732
Other sales
182,879
-
17,659,740
18,130,067
2023
2022
£
£
Other revenue
Interest income
31,039
489
ADAPTAINER LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 16 -
4
Operating profit
2023
2022
Operating profit for the year is stated after charging/(crediting):
£
£
Exchange losses
391,670
244,887
Fees payable to the company's auditors for the audit of the company's financial statements
14,000
12,000
Depreciation of owned tangible fixed assets
375,549
409,487
Depreciation of tangible fixed assets held under finance leases
16,169
248,555
Profit on disposal of tangible fixed assets
(1,311,710)
(490,058)
Operating lease charges
17,599
15,916
5
Employees
The average monthly number of persons (including directors) employed by the company during the year was:
2023
2022
Number
Number
16
19
Their aggregate remuneration comprised:
2023
2022
£
£
Wages and salaries
2,382,645
1,011,193
Social security costs
305,130
104,245
Pension costs
58,708
80,928
2,746,483
1,196,366
6
Directors' remuneration
2023
2022
£
£
Remuneration for qualifying services
1,757,565
272,363
Company pension obligations
14,237
39,556
1,771,802
311,919
Key management personnel of the company consists of its directors only.
ADAPTAINER LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 17 -
7
Interest receivable and similar income
2023
2022
£
£
Interest income
Interest on bank deposits
22,273
489
Other interest income
8,766
Total income
31,039
489
2023
2022
Investment income includes the following:
£
£
Interest on financial assets not measured at fair value through profit or loss
22,273
489
8
Interest payable and similar expenses
2023
2022
£
£
Interest on financial liabilities measured at amortised cost:
Interest on bank overdrafts and loans
-
3,196
Other finance costs:
Interest on finance leases and hire purchase contracts
36,003
48,397
Other interest
227,419
274,735
263,422
326,328
9
Taxation
2023
2022
£
£
Current tax
UK corporation tax on profits for the current period
116,233
385,117
Adjustments in respect of prior periods
(1,828)
100,574
Total current tax
114,405
485,691
Deferred tax
Origination and reversal of timing differences
16,101
876,699
Total tax charge
130,506
1,362,390
ADAPTAINER LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
9
Taxation
(Continued)
- 18 -
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
303,388
3,427,883
Expected tax charge based on the standard rate of corporation tax in the UK of 25.00% (2022: 19.00%)
75,847
651,298
Tax effect of expenses that are not deductible in determining taxable profit
157,021
35,448
Gains not taxable
(93,111)
Adjustments in respect of prior years
100,574
Effect of change in corporation tax rate
(9,138)
Group relief
(4,041)
(6,441)
Permanent capital allowances in excess of depreciation
(105,284)
(202,077)
Deferred tax
16,101
876,699
Taxation charge for the year
130,506
1,362,390
10
Dividends
2023
2022
£
£
Interim paid
100,000
ADAPTAINER LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 19 -
11
Tangible fixed assets
Plant & machinery
Fixtures & fittings
Office & computer equipment
Motor vehicles
Maritime containers
Total
£
£
£
£
£
£
Cost
At 1 January 2023
434,500
36,851
35,224
141,613
5,286,065
5,934,253
Additions
51,110
998
760,744
812,852
Disposals
(1,979,870)
(1,979,870)
At 31 December 2023
485,610
36,851
36,222
141,613
4,066,939
4,767,235
Depreciation and impairment
At 1 January 2023
89,575
27,139
24,315
40,082
1,058,460
1,239,571
Depreciation charged in the year
91,095
6,642
6,937
28,323
258,721
391,718
Eliminated in respect of disposals
(435,253)
(435,253)
At 31 December 2023
180,670
33,781
31,252
68,405
881,928
1,196,036
Carrying amount
At 31 December 2023
304,940
3,070
4,970
73,208
3,185,011
3,571,199
At 31 December 2022
344,925
9,712
10,909
101,531
4,227,605
4,694,682
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
£
£
Maritime containers
111,078
1,703,321
The depreciation charge in respect of such assets amounted to £16,169 (2022: £248,555) for the period.
12
Stocks
2023
2022
£
£
Containers
6,363,729
7,302,425
Stock is stated after provisions for impairment of £579,580 (2022: £391,527).
ADAPTAINER LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 20 -
13
Debtors
2023
2022
Amounts falling due within one year:
£
£
Trade debtors
1,627,899
1,173,131
Corporation tax recoverable
60,838
169,296
Amounts owed by group undertakings
1,402,695
714,505
Other debtors
359,443
28,713
Prepayments and accrued income
259,494
37,648
3,710,369
2,123,293
2023
2022
Amounts falling due after more than one year:
£
£
Other debtors
30,000
40,000
Total debtors
3,740,369
2,163,293
Trade debtors are stated after provisions for doubtful debts of £41,812 (2022: £26,846)
14
Creditors: amounts falling due within one year
2023
2022
Notes
£
£
Obligations under finance leases
17
221,733
451,494
Trade creditors
2,040,243
1,444,064
Taxation and social security
612,006
448,196
Other creditors
219,205
36,055
Accruals and deferred income
779,588
729,222
3,872,775
3,109,031
15
Creditors: amounts falling due after more than one year
2023
2022
Notes
£
£
Obligations under finance leases
17
238,254
472,395
Other borrowings
16
1,489,256
2,903,638
1,727,510
3,376,033
ADAPTAINER LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 21 -
16
Loans and overdrafts
2023
2022
£
£
Other borrowings
1,489,256
2,903,638
Payable after one year
1,489,256
2,903,638
17
Finance lease obligations
2023
2022
Future minimum lease payments due under finance leases:
£
£
Within one year
221,733
451,494
In two to five years
238,254
472,395
459,987
923,889
These are secured on the company's assets to which it relates.
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 4 years. All leases are on a fixed repayment basis and no arrangements have been entered into for contingent rental payments.
18
Provisions for liabilities
2023
2022
Note
£
£
Retirement benefit obligations
19
280,250
273,200
Deferred tax liabilities
20
892,800
876,699
1,173,050
1,149,899
The company has entered into agreements and is contractually obliged to expend fixed sums in the future to provide retirement benefits to senior employees under the terms of their pension agreements.
Movements on provisions apart from deferred tax liabilities:
£
At 1 January 2023
273,200
Additional provisions in the year
7,050
At 31 December 2023
280,250
ADAPTAINER LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 22 -
19
Retirement benefit schemes
2023
2022
Defined benefit and contribution schemes
£
£
Charge to profit or loss in respect of defined benefit schemes
7,050
32,369
Charge to profit or loss in respect of defined contribution schemes
51,658
48,559
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. The above pension charge includes an amount of £51,658 (2022: £48,559) in respect of defined contribution scheme paid by the company to the funds.
The company also provided pension benefits in respect of senior employees. Amounts payable are charged to the profit and loss account in the year the contracts are entered into between the company and the employees. The number of directors to whom pension benefits are accruing under these pension agreements is 1 (2022:2).
The contributions and potential liabilities of the company in respect of the pension agreements are fixed at least until the date of retirement of the employees which is over 9 years from the year end date. Therefore these liabilities are not payable until the date of retirement.
Although under section 28 of FRS 102 this pension arrangement is regarded as being a defined benefit scheme, the directors are of the opinion that it does not bear any of the hallmarks of what is usually considered to be a defined benefit scheme and therefore no further disclosures are considered necessary in order to understand the nature and measurement of the liability.
The directors are also of the opinion that the liability as disclosed in the financial statements represents the full and final amount which could be expected, at this stage, to be paid in the future to settle the pension agreement liabilities.
20
Deferred taxation
The following is the analysis of the deferred tax balances for financial reporting purposes:
Liabilities
Liabilities
2023
2022
Balances:
£
£
Accelerated capital allowances
892,800
876,699
2023
Movements in the year:
£
Liability at 1 January 2023
876,699
Charge to profit or loss
16,101
Liability at 31 December 2023
892,800
ADAPTAINER LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 23 -
21
Share capital
2023
2022
2023
2022
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary Shares of 10p each
4,710
4,710
471
471
22
Share premium account
2023
2022
£
£
At the beginning and end of the year
999
999
23
Financial commitments, guarantees and contingent liabilities
The directors of the company have provided guarantees in respect of certain loans entered into by the company.
There was a fixed and floating charge over the assets of the company and this was satisfied post year end.
25
Related party transactions
During the year the company undertook following transactions with Qube Containers Limited, a company in which P Clark is the director.
Sales and recharges made to related party £2,585,964 (2022: £1,070,145).
Services received from related party costing £391,159 (2022: £84,351).
Included in other borrowings is an amount of £1,489,256 (2022: £2,903,638) owed to Qube Containers Limited. During the year interest of £31,477 (2022: £53,158) was charged at a commerical rate on this loan balance.
Included in other debtors is an amount of £262,000 (2022: Nil) owed to the company by one of the directors. The maximum amount outstanding during the year was £262,000. During the year interest of £1,114 was charged on this loan balance and the balance was repaid within 9 months of the year end.
26
Ultimate controlling party
The company's ultimate parent company is Jomar Holdings Ltd, a company registered in England and Wales, and its registered office address is 166 College Road, Harrow, Middlesex, HA1 1RA. The results of the company are included in the consolidated accounts of Jomar Holdings Ltd which are available at its registered address.
The ultimate controlling party is P Clark.
ADAPTAINER LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 24 -
27
Cash (absorbed by)/generated from operations
2023
2022
£
£
Profit for the year after tax
172,882
2,065,493
Adjustments for:
Taxation charged
130,506
1,362,390
Finance costs
263,422
326,328
Investment income
(31,039)
(489)
Gain on disposal of tangible fixed assets
(1,311,710)
(490,058)
Depreciation and impairment of tangible fixed assets
391,718
658,042
Increase in provisions
7,050
32,369
Movements in working capital:
Decrease in stocks
938,696
4,983,523
Increase in debtors
(1,685,534)
(1,224,752)
Increase/(decrease) in creditors
993,505
(3,299,618)
Cash (absorbed by)/generated from operations
(130,504)
4,413,228
28
Analysis of changes in net funds/(debt)
1 January 2023
Cash flows
31 December 2023
£
£
£
Cash at bank and in hand
2,272,647
(303,643)
1,969,004
Borrowings excluding overdrafts
(2,903,638)
1,414,382
(1,489,256)
Obligations under finance leases
(923,889)
463,902
(459,987)
(1,554,880)
1,574,641
19,761
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