Registered Number:
ANNUAL REPORT AND CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
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COMPANY INFORMATION
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CONTENTS
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GROUP STRATEGIC REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
The directors present the strategic report and financial statements for the year ended 31 December 2023.
The Pickering Interfaces Group operates through seven connected companies based in the UK, USA, France, Germany, the Czech Republic and China.
During the year, group revenue increased by 14% compared with the previous accounting year, the largest growth being within the US market. We have continued to invest in new facilities in the UK and Czech Republic, product development and new products and markets. Marketing spend will continue at a high rate, especially for new products. Despite this we remain completely debt free. One of the restraining factors the business faced during previous years was the continued industry wide supply chain shortages. Pickering was successful in mitigating these shortages by sourcing multiple suppliers and placing strategic stock purchases to ensure the supply of critical components into the business. Due to this we have seen our component stock levels rise but this enabled us to meet customer demand with shorter lead times during these challenging times. Financial Highlights Turnover Year to Dec 23 - £37,313,050 Year to Dec 22 - £32,693,013 Gross Profit Margins Year to Dec 23 – 61.16% Year to Dec 22 – 67.18% Operating Profit Year to Dec 23 - £5,488,160 Year to Dec 22 - £8,289,693
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GROUP STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
In accordance with Section 172 of the Companies Act, the directors have a duty to promote the success of the Company. This requires each director of the company to act in the way they consider, in good faith, would most likely promote the success of the Company for the benefits of its members as a whole and in doing so have regard to the:
• Likely consequences of any decision in the long-term. • Interests of the company’s employees. • Need to foster the Company's business relationships with suppliers, customers and others. • Desirability of the Company maintaining a reputation for high standards of business conduct. • Impact of the Company's operations on the community and the environment. • And the need to act fairly between members of the company. Key stakeholders and how we engage:- Customers Customers are at the center of everything Pickering does. We work closely with our customers, worldwide, from first contact through to delivery and support for the lifetime of the product or service provided. We place particular emphasis on understanding new requirements, developing new products and services where needed via our extensive R&D program. Our business model of Mass Customisation allows us to offer our customers a very wide range of products, tuned closely to their exact needs from a standard range of products. We also support most products from introduction through to end of life, which usually exceeds 25 years, including form and fit updates, especially important for our Aerospace and Defence customers amongst others. Employees Employees are the heart of Pickering, we maintain a close family atmosphere in all our operations, investing heavily in individual employees to enhance their experience and inclusiveness within Pickering. We offer many additional employee benefits to all our employees, including training, social activities, and particular regard to proactive employee health, welfare and development. We now have many employees who have spent a significant part of their working lives with Pickering. This year Pickering has built Senior Leadership teams in both the UK and Czechia to grow the next generation of leaders and to further trickle-down responsibility in response to our recent rapid growth. Suppliers Suppliers are key stakeholders at Pickering, we work closely with our main suppliers always fostering a friendly, cooperative partnership and strongly encouraging innovation. We always try to encourage a great outcome for the supplier as well as for Pickering. Many of Pickering’s key suppliers have worked with us for 20, 30 or even 40 years, 2-way loyalty with our suppliers is important at Pickering. We take pride in paying our suppliers quickly. Communities Pickering work quite extensively in the communities of our main facilities in Clacton, UK and Trinec/Bystrice in Czechia. We engage with the local schools and communities, of particular importance is our volunteering and charitable giving now running at typically £150k/year which is all focused locally with employee selected charities. Shareholder Pickering is a privately held company, which is best described as being very close to the German Mittelstand business model: - Independent family ownership with family-like corporate culture, this allows us to take a very long term and holistic view of the companies’ activities and responsibilities. - Strong balance sheet with long term investment strategy. - Generational continuity. - Worldwide sales in all major markets, with a physical presence in the major markets. - Nimbleness, flexibility and Innovation.
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GROUP STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- Investment into our workforce
- Flat management structure - Strong customer focus - Social responsibility - Strong regional ties to our two main facilities in the UK and Czechia
There are risks and uncertainties relevant to the Group's business, financial conditions and results of operations that may affect its performance and ability to achieve its objectives. The factors listed below are amongst those that the directors believe could cause the Group's actual results to differ from expected and historical results.
Although it would not be possible for the Group to implement controls to respond to all the risks that it may face, in the opinion of the directors the strategies employed minimise those risks to an acceptable level. Risk Product quality failure: The Group operates in highly regulated markets with strict quality requirements. Any quality failure involving the Group's products could lead to a loss of reputation, reduction in revenues and recall costs. Strategy The Group has rigorous quality assurance processes. Incoming materials are analysed, production processes are controlled, and products are sampled for testing prior to release. Risk Currency risk: The Group has significant transactions in Euro and US Dollar, and as such has an exposure to fluctuations in currency variances. Strategy The Group maintains significant assets in Euro and US Dollar to manage translation exposure. Development and performance The Group has continued to invest significantly in research & development, advertising and marketing during the year and is constantly seeking to market and develop its products further. Component obsolescence can affect long term product support, the Group recognises the importance of this and the implications to customers. Should obsolescence occur updates, where possible, will be performed with the product enhanced by the inclusion of new / additional features. Considering all factors, the directors consider that the Group remains ideally placed to grow both revenue and profitability.
This report was approved by the board on 19 September 2024 and signed on its behalf.
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DIRECTORS' REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
The directors present their report and the financial statements for the year ended 31 December 2023.
The directors are responsible for preparing the Group Strategic Report, the Directors' Report and the consolidated financial statements in accordance with applicable law and regulations.
In preparing these financial statements, the directors are required to:
∙select suitable accounting policies for the Group's financial statements and then apply them consistently;
∙make judgments and accounting estimates that are reasonable and prudent;
∙state whether applicable UK Accounting Standards have been followed, subject to any material departures disclosed and explained in the financial statements;
∙prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Group 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 the Group and to 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 the Group and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
The profit for the year, after taxation, amounted to £4,417,514 (2022 - £7,174,646).
During the year the Group paid dividends totaling £793,231 (2022: £161,333). The directors do not propose that
any further dividend be declared in respect of the year under review.
The directors who served during the year were:
Information on future developments is included in the strategic report.
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PICKERING INTERFACES LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
Information on engagement with suppliers, customers and others is included in the strategic report.
During the year, there was director's indemnity insurance in place.
On 28 March 2024 our auditor, SB Audit LLP, merged with Sumer Auditco Limited.
Accordingly SB Audit LLP formally resigned as the Company’s auditor with the Directors duly appointing Sumer Auditco Limited to fill the vacancy arising. The auditor, Sumer Auditco Limited, will be proposed for reappointment in accordance with section 485 of the Companies Act 2006.
This report was approved by the board on
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INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF PICKERING INTERFACES LIMITED
We have audited the financial statements of Pickering Interfaces Limited (the 'parent Company') and its subsidiaries (the 'Group') for the year ended 31 December 2023, which comprise the Consolidated Profit and Loss Account, the Consolidated Statement of Comprehensive Income, the Consolidated Balance Sheet, the Company Balance Sheet, the Consolidated Statement of Cash Flows, the Consolidated Statement of Changes in Equity, the Company Statement of Changes in Equity and the related notes, including a summary of significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 ‘The Financial Reporting Standard applicable in the UK and Republic of Ireland' (United Kingdom Generally Accepted Accounting Practice).
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 Group in accordance with the ethical requirements that are relevant to our audit of the financial statements in the United Kingdom, including the Financial Reporting Council'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.
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 Group's or the parent 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.
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PICKERING INTERFACES LIMITED
INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF PICKERING INTERFACES LIMITED (CONTINUED)
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.
In our opinion, based on the work undertaken in the course of the audit:
∙the information given in the Group 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 Group Strategic Report and the Directors' Report have been prepared in accordance with applicable legal requirements.
In the light of the knowledge and understanding of the Group and the parent Company and its environment obtained in the course of the audit, we have not identified material misstatements in the Group Strategic Report or the Directors' Report.
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PICKERING INTERFACES LIMITED
INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF PICKERING INTERFACES LIMITED (CONTINUED)
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PICKERING INTERFACES LIMITED
INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF PICKERING INTERFACES LIMITED (CONTINUED)
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 Group financial statements.
The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below:
We identified areas of laws and regulations that could reasonably be expected to have a material effect on the financial statements from our general commercial and sector experience, through discussion with the directors (as required by auditing standards), inspection of the companies regulatory and legal correspondence and discussed with the directors the policies and procedures regarding compliance with laws and regulations. We communicated identified laws and regulations throughout our team and remained alert to any indications of noncompliance throughout the audit. The potential effect of these laws and regulations on the financial statements varies considerably. Firstly, the company is subject to laws and regulations that directly affect the financial statements including financial reporting legislation and taxation legislation and we assessed the extent of compliance with these laws and regulations as part of our procedures on the related financial statement items. Secondly, the company is subject to many other laws and regulations where the consequences of noncompliance could have a material effect on amounts or disclosure in the financial statements, for instance through the imposition of fines or litigation. We identified the following areas as those most likely to have such an effect: compliance with ISO 9001, AEO, Intertek certification, REACH, CE, WEEE and ROH compliance, health and safety, import and export laws, anti-bribery and corruption, human rights and employment law and GDPR compliance. Auditing standards limit the required audit procedures to identify non-compliance with these laws and regulations to enquiry of the directors and other management and inspection of regulatory and legal correspondence, if any. Audit procedures undertaken in response to the potential risks relating to irregularities (which include fraud and non-compliance with laws and regulations) comprised of: enquires of management and those charges with governance as to whether the company complies with such regulations; enquires of management and those charged with governance concerning any actual or potential litigations or claims, inspection of relevant legal documentation, review of board minutes, testing appropriateness of journal entries and the performance of analytical review to identify any unexpected movements in account balances which may be indicative of fraud. Because of the inherent limitations of an audit, there is a risk that we will not detect all irregularities, including those leading to a material misstatement in the financial statements or non-compliance with regulation. This risk increases the more that compliance with a law or regulation is removed from the events and transactions reflected in the financial statements, as we will be less likely to become aware of instances of non-compliance. The risk is also greater regarding irregularities occurring due to fraud rather than error, as fraud involves intentional concealment, forgery, collusion, omission or misrepresentation.
A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council's website at: www.frc.org.uk/auditorsresponsibilities. This description forms part of our Auditor's Report.
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PICKERING INTERFACES LIMITED
INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF PICKERING INTERFACES LIMITED (CONTINUED)
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.
for and on behalf of
Statutory Auditor
820 The Crescent
Colchester Business Park
Essex
CO4 9YQ
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CONSOLIDATED PROFIT AND LOSS ACCOUNT
FOR THE YEAR ENDED 31 DECEMBER 2023
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CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2023
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CONSOLIDATED BALANCE SHEET
AS AT 31 DECEMBER 2023
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CONSOLIDATED BALANCE SHEET (CONTINUED)
AS AT 31 DECEMBER 2023
The financial statements were approved and authorised for issue by the board and were signed on its behalf on 19 September 2024.
The notes on pages 24 to 42 form part of these financial statements.
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COMPANY BALANCE SHEET
AS AT 31 DECEMBER 2023
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COMPANY BALANCE SHEET (CONTINUED)
AS AT 31 DECEMBER 2023
This company has taken advantage of section 408 of the Companies Act not to include its individual statement of comprehensive income.
The financial statements were approved and authorised for issue by the board and were signed on its behalf on
The notes on pages 24 to 42 form part of these financial statements.
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CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2023
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CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2022
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COMPANY STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2023
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COMPANY STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2022
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CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 DECEMBER 2023
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CONSOLIDATED STATEMENT OF CASH FLOWS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
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CONSOLIDATED ANALYSIS OF NET DEBT
FOR THE YEAR ENDED 31 DECEMBER 2023
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
Pickering Interfaces Limited is a private limited company incorporated in England and Wales.
Its registered office is Pickering, Stephenson Road, Clacton-on-Sea, Essex, England, CO15 4NL. Its principal activity is that of electrical components manufacturing. The group consists of Pickering Interfaces Limited and its subsidiaries. Details of these subsidiaries can be found in note 11.
2.Accounting policies
The financial statements have been prepared under the historical cost convention unless otherwise specified within these accounting policies and in accordance with Financial Reporting Standard 102, the Financial Reporting Standard applicable in the UK and the Republic of Ireland and the Companies Act 2006.
The preparation of financial statements in compliance with FRS 102 requires the use of certain critical accounting estimates. It also requires Group management to exercise judgment in applying the Group's accounting policies (see note 3).
The Company has taken advantage of the exemption allowed under section 408 of the Companies Act 2006 and has not presented its own Profit and Loss Account in these financial statements.
The following principal accounting policies have been applied:
The consolidated financial statements present the results of the Company and its own subsidiaries ("the Group") as if they form a single entity. Intercompany transactions and balances between group companies are therefore eliminated in full.
The consolidated financial statements incorporate the results of business combinations using the purchase method. In the Balance Sheet, the acquiree's identifiable assets, liabilities and contingent liabilities are initially recognised at their fair values at the acquisition date. The results of acquired operations are included in the Consolidated Profit and Loss Account from the date on which control is obtained. They are deconsolidated from the date control ceases. The Company is included in the consolidated financial statements, and is considered to be a qualifying entity under FRS 102 paragraphs 1.8 to 1.12. The disclosure exemption from preparing a separate Company statement of cash flows has been applied.
The financial statements have been drawn up on a going concern basis. The future of the world
economy is unclear at this present time and it is therefore difficult to evaluate all of the potential implications on the company’s trade, customers, suppliers and the wider economy.
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
2.Accounting policies (continued)
Depreciation is charged so as to allocate the cost of assets less their residual value over their estimated useful lives.
Depreciation is provided on the following basis:
The assets' residual values, useful lives and depreciation methods are reviewed, and adjusted prospectively if appropriate, or if there is an indication of a significant change since the last reporting date.
Gains and losses on disposals are determined by comparing the proceeds with the carrying amount and are recognised in profit or loss.
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
2.Accounting policies (continued)
Provisions are charged as an expense to profit or loss in the year that the Group becomes aware of the obligation, and are measured at the best estimate at the balance sheet date of the expenditure required to settle the obligation, taking into account relevant risks and uncertainties.
The Group only enters into basic financial instrument transactions that result in the recognition of financial assets and liabilities like trade and other debtors and creditors, loans from banks and other third parties, loans to related parties and investments in ordinary shares.
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.
Financial assets
Debt instruments that do not meet the conditions as set out in FRS 102 paragraph 11.9 are
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
2.Accounting policies (continued)
subsequently measured at fair value through the profit or loss.
Functional and presentation currency
The Company's functional and presentational currency is GBP. Transactions and balances Foreign currency transactions are translated into the functional currency using the spot exchange rates at the dates of the transactions. At each period end foreign currency monetary items are translated using the closing rate. Non-monetary items measured at historical cost are translated using the exchange rate at the date of the transaction and non-monetary items measured at fair value are measured using the exchange rate when fair value was determined. Foreign exchange gains and losses resulting from the settlement of transactions and from the translation at period-end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in profit or loss except when deferred in other comprehensive income as qualifying cash flow hedges. On consolidation, the results of overseas operations are translated into Sterling at rates approximating to those ruling when the transactions took place. All assets and liabilities of overseas operations are translated at the rate ruling at the reporting date. Exchange differences arising on translating the opening net assets at opening rate and the results of overseas operations at actual rate are recognised in other comprehensive income.
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
2.Accounting policies (continued)
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
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.
Analysis of turnover by country of destination:
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
- 31 -
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
- 32 -
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
9.Taxation (continued)
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
- 34 -
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
10.Tangible fixed assets (continued)
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
- 36 -
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
- 37 -
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
- 38 -
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
- 39 -
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
16.Deferred taxation (continued)
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
Pickering Interfaces have placed forward orders with suppliers and estimate a liabilty in respect of these at
the year end totalling £1,011,943 (2022: £1,371,764).
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
The company is a wholly owned subsidiary of Pickering Group Limited, a company under the control of Mr
K T Moore.
- 42 -
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