Registered Number:
FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2023
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
COMPANY INFORMATION
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
CONTENTS
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
STRATEGIC REPORT
FOR THE YEAR ENDED 30 SEPTEMBER 2023
The Director presents the Annual Report and the financial statements for the year ended 30 September 2023.
The principal activities of the Company are trading as a distributor of coatings for the automotive and industrial sectors, including sundries and motor accessories.
The company has faced economic difficulties during the year ended 30 September 2023 and post year end the company has new management. On 19 July 2024, The ultimate holding company of Movac Group Limited was purchased by Soft Auto's Limited, following this purchase on 11th September 2024, Soft Auto's Limited purchased Movac Group Limited from Movac Holdings Limited (the former intermediate holding company) and it is not a direct subsidiary of Soft Auto's Limited. The ultimate controlling party of Soft Auto's and new Director Pieter-Uys Barnard is looking forward to the future with new strategies to improve the business moving forward and restructure the company. Sales for the year reached £15.5m an increase of 9% [2022: £14.1m]. The Company continues to implement new directives and appropriate measures which mitigate against potential future impact to ensure the Company is well placed within the UK Market. The Economic and Political environment across the Company’s local and national network is constantly under review as well as the global impacts on supply chain. During the year management continued to invest in human capital into both divisions has enabled the Company to maintain its strategic goals despite continued challenging economic uncertainties during the year and the company continues to put in place appropriate measures to mitigate and protect itself from any impacts the economic climate presents. Since the change in ownership, management have reviewed headcount and job roles with the aim of increasing efficiency and reducing cost. Bad debts for the Company were limited once again with the credit control department performing exceptionally well considering the UK market and cash availability challenges. Greater controls on KPI’s for all customers new and existing with use of credit houses ensuring the Company continues to mitigate against bad debt risk. The director continues to consider the turnover, stock turnover, and gross profit percentage to be the most appropriate key performance indicators for the Company. The Company is satisfied with the actions they have taken since acquiring the Company in the post balance sheet period and are confident that they have been made for the betterment of the business and its future.
Future developments
Since acquiring control of the business, the Management of Soft Auto have been undertaking a detailed review of the operations and cost base of Movac Group Limited. The aim of this review is to identify and implement cost efficiencies that will enhance the Company’s liquidity and enable it to be more efficient in its approach developing and improving its market conditions. Through this the Management of Soft Auto believe that they will be able to return the Company to profitability and improve the Companies working capital position.
- 1 -
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2023
The director has considered the financial risks of the Company and put in place suitable procedures and policies to mitigate the risks to an acceptable level. In particular, full company restructure with a new Managing Director to be announced in the coming week, head count will be reduced to approximately 40 employees. Revised budget and cash forecasts have been prepared in response to the continuing economic uncertainties and the requirement to restructure the business in line with future forecast. Raw materials and supply chain have proven to be challenging due to global increases in raw material costs and inflation, however Movac has forged new partnerships with Suppliers and continues to negotiate more favourable terms.
Credit risk The Company's principal financial assets are cash and trade debtors. The credit risk associated with the cash balances is limited as the counterparties have high credit ratings assigned by international credit-rating agencies. The principal credit risk arises therefore from the Company's trade debtors. In order to manage credit risk, the Director and management set limits for customers based on a combination of payment history and third-party credit verification procedures. The recoverability of trade debtors is reviewed on a regular basis through review of debtor aging and collection history and provision is made for doubtful debts where necessary. Liquidity risk The Company manages its cash and borrowing requirements on a regular basis in order to minimise the interest expense, whilst ensuring that the Company has sufficient liquid resources to meet the operating needs of the business. Working capital is primarily received through an Invoice Discounting Facility. This facility is currently with RBS at a level of 64% however we are currently completing an application with HSBC which will then move the level to 90% potentially and is further supported through an overdraft facility and a bank loan. The bank overdraft facility is renewed on an annual basis and was renewed in November 2023 for a further year at the same rate. As we are now in September 2024 we are discussing with both RBS and HSBC to decide what is best for the business moving forward. The bank loan was refinanced in September 2021 with an expiry date of September 2026 with fixed rate terms similar to those of the previous agreement. Interest rate risk The Company is exposed to cash flow interest rate risk on its bank loan, overdraft and invoice discounting facility. The risk is mitigated through rates of each facility being fixed to track the bank base rate; this risk will also be reduced over the coming 8-12 weeks as we move across to HSBC once we have finished our review of all options available.
The Company's principal financial instruments include the bank overdraft, invoice discounting facility and bank loan, the purpose of which is to provide sufficient finance for the Company's day to day operations. In addition, the Company has various other financial assets and liabilities, such as trade debtors and trade creditors arising directly from its operations.
The Company measures performance on a regular basis utilising management reports designed to provide the Director with key operational information.
- 2 -
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2023
This report was approved by the Board on 21 October 2024 and signed on its behalf.
- 3 -
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
DIRECTOR'S REPORT
FOR THE YEAR ENDED 30 SEPTEMBER 2023
The Director presents his report and the financial statements for the year ended 30 September 2023.
The Director is responsible for preparing the Strategic Report, the Director's Report and the financial statements in accordance with applicable law and regulations.
In preparing these financial statements, the Director is required to:
∙select suitable accounting policies for the Company's financial statements and then apply them consistently;
∙make judgements and accounting estimates that are reasonable and prudent; and
∙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 to enable him 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.
The loss for the year, after taxation, amounted to £1,944,612 (2022 - profit £123,289).
The Director does not recommend the payment of a final dividend for the year (2022 - £257,860).
The Director who served during the year and to the date of this report were:
- 4 -
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
MOVAC GROUP LIMITED
DIRECTOR'S REPORT (CONTINUED)
FOR THE YEAR ENDED 30 SEPTEMBER 2023
Information regarding the performance of the Company, principal risks and uncertainties and details of any significant future developments have been disclosed in the Strategic Report.
• so far as the Director is aware, there is no relevant audit information of which the Company's auditor is unaware; and • the Director has taken all the steps that ought to have been taken as a Director in order to be aware of any relevant audit information and to establish that the Company's auditor is aware of that information.
On 19 July 2024 Movac Coatings (Holdings) Limited, the ultimate parent company of Movac Group Limited was purchased by Soft Auto Limited, of which P U Barnard is the ultimate controlling party. On 11 September 2024. Soft Auto Limited purchased the shares of Movac Group Limited from Movac Holdings Limited (the intermediate holding company of the Movac Coatings (Holdings Limited) Group.
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. 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
- 5 -
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF MOVAC GROUP LIMITED
We have audited the financial statements of Movac Group Limited (the 'Company') for the year ended 30 September 2023, which comprise of the Statement of Comprehensive Income, the Balance Sheet, the 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 Company 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.
We draw your attention to note 2.3 of the financial statements which describes the actions taken by the new management team following the change of control in the post balance sheet period. This describes the actions being taken to improve the competitiveness, efficiency, and liquidity of the Company. The challenging economic conditions faced by the Company in recent years have adversely impacted the Company's trading and liquidity, the new management teams ability to implement their plans will be key in ensuring the Company is able to develop its market position and generate the working capital it requires to continue to meet its liabilities as they fall due for payment. Our opinion is not modified in respect of this matter.
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.
- 6 -
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
MOVAC GROUP LIMITED
INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF MOVAC GROUP 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 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.
In our opinion, based on the work undertaken in the course of the 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.
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.
- 7 -
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
MOVAC GROUP LIMITED
INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF MOVAC GROUP 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 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:
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 experience and through discussions and enquiries of the Director and management. During the engagement team briefing, the outcomes of these discussions were shared with the team, as well as consideration as to where and how fraud may occur in the Company. The following laws and regulations were identified as being of significance to the Company: • Those laws and regulations considered to have a direct effect on the financial statements including UK financial reporting standards, UK Company Law and taxation legislation; and • Those laws and regulations considered to have an indirect effect on the financial statements including The Health & Safety Act 1974, GDPR, anti-bribery and corruption, human rights and Employment law. Audit procedures undertaken in response to the potential risks relating to irregularities (which include fraud and non-compliance with laws and regulations) comprised of: enquiries of management and those charged with governance as to whether the Company complies with such regulations; enquiries of management and those charged with governance concerning any actual or potential litigation or claims, inspection of relevant legal documentation, review of board minutes, testing of journal entries, performance of analytical review to identify any unexpected movements in account balances which may be indicative of fraud. There are inherent limitations in the audit procedures described above and the further removed non-compliance with laws and regulations is from the events and transactions reflected in the financial statements, the less likely we would become aware of it. Irregularities that result from fraud might be inherently more difficult to detect than irregularities that result from error. As explained above, there is an unavoidable risk that material misstatements may not be detected, even though the audit has been planned and performed in accordance with ISAs (UK).
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.
- 8 -
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
MOVAC GROUP LIMITED
INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF MOVAC GROUP 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
Fitzroy House
Crown Street
Suffolk
IP1 3LG
- 9 -
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 30 SEPTEMBER 2023
- 10 -
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
BALANCE SHEET
AS AT 30 SEPTEMBER 2023
- 11 -
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
BALANCE SHEET (CONTINUED)
AS AT 30 SEPTEMBER 2023
The financial statements were approved and authorised for issue by the board and were signed on its behalf on
The notes on pages 14 to 33 form part of these financial statements.
- 12 -
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 30 SEPTEMBER 2023
- 13 -
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2023
Movac Group Limited (the "Company") is a private company limited by shares, domiciled and incorporated in England and Wales. The address of the registered office is 11 Portman Road, Ipswich, Suffolk IP1 2BP.
The principal activity of the Company during the year was trading as a distributor of coatings for the automotive and industrial sectors, including sundries and motor accessories.
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 financial statements are presented in sterling which is the functional currency of the Company and rounded to the nearest £.
The preparation of financial statements in compliance with FRS 102 requires the use of certain critical accounting estimates. It also requires management to exercise judgement in applying the Company's accounting policies (see note 3).
The following principal accounting policies have been applied:
The Company has taken advantage of the following disclosure exemptions in preparing these financial statements, as permitted by the FRS 102 "The Financial Reporting Standard applicable in the UK and Republic of Ireland":
• the requirements of Section 7 Statement of Cash Flows; • the requirements of Section 3 Financial Statement Presentation paragraph 3.17(d); • the requirements of Section 11 Financial Instruments paragraphs 11.42, 11.44 to 11.45, 11.47, 11.48(a)(iii), 11,48(a)(iv), 11.48(b) and 11.48(c); • the requirements of Section 12 Other Financial Instruments paragraphs 12.26 to 12.27, 12.29(a), 12.29(b) and 12.29A; and • the requirements of Section 33 Related Party Disclosures paragraph 33.7. This information is included in the consolidated financial statements of Movac Coatings (Holdings) Limited as at 30 September 2023 and these financial statements may be obtained from Companies House, Crown Way, Cardiff CF14 3UZ.
- 14 -
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2023
2.Accounting policies (continued)
The Company's business activities together with the factors likely to affect its future development, its financial position and principal risks and uncertainties are set out in the Strategic Report. The Director and management have prepared detailed forecasts that show that the Company will have sufficient financial resources to continue in operational existence for the foreseeable future, being at least 12 months from the date of approval of these financial statements, providing they obtain the new invoice discounting facility as detailed below and suppliers do not recall their liabilities. The Director of the Company has other business interests that are a supplier to Movac Group Limited. The Director has confirmed that he will continue to support Movac Group Limited and will not call in the balances due until the Company has sufficient resources.
The balance sheet shows a net current liabilities position of £1,315,577, of this £1,844,291, relates to the invoice discounting facility and therefore as detailed above the Company is dependant upon the continuation of this facility. On 19 July 2024 Movac Coatings (Holdings) Limited, the ultimate parent company of Movac Group Limited was purchased by Soft Auto Limited, of which P U Barnard is the ultimate controlling party. On 11 September 2024. Soft Auto Limited purchased the shares of Movac Group Limited from Movac Holdings Limited (the intermediate holding company of the Movac Coatings (Holdings) Limited group. Under new management, the Company is undergoing a detailed review of the it's operations as part of a reorganisation programme to improve efficiencies. Plans to achieve improved liquidity include, changing the Invoice Discounting Facility to a new provider, which will then move the current level from 64% up to a potential 90%, if this is achieved this will have a positive impact on cashflow by accelerating the receipt of funds following the sale of goods. Management are also reviewing the Company's overdraft facility loan arrangements. The Company's current overdraft facility is due for renewal in November 2024 and there is no indication that this will not be agreed on similar terms and the bank loan was refinanced in the previous year such that repayments will occur over the period to September 2026. Whilst the Company's current Invoice Discounting facility has a notice period of one month, the Director has received no indication from the Company's bankers that the facility will cease to be made available. As at the time of approving these financial statements, managements review of the Company's operational arrangements is ongoing and the Director will be making further changes to the Company's operations with the aim of improving trading efficiency and liquidity. In preparing the forecasts, the Director and management have made certain assumptions around forecasts revenues and cash flows, which they believe are prudent and reflecting the likely impact of the ongoing cost of living crisis and the wider global economic environment. There is always uncertainty when preparing business forecasts, and the Director recognises that the current global economic environment potentially increases the level of uncertainty when preparing its cash flow and trading forecasts. However, given the current trading results of the business, its success in adapting its operations, along with the renewal of certain bank facilities, the Director does not believe that uncertainty casts significant doubt over the ability to continue to meet its liabilities as they fall due. Accordingly, the Director has continued to prepare these financial statements on a going concern basis.
- 15 -
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2023
2.Accounting policies (continued)
The Company operates a defined contribution pension scheme for its employees. A defined contribution pension scheme is a pension plan under which the Company pays fixed contributions into a separate entity. Once the contributions have been paid the Company has no further payment obligations.
The contributions are recognised as an expense in profit or loss when they fall due. Amounts not paid are shown in Other Creditors as a liability in the Balance Sheet. The assets of the plan are held separately from the Company in independently administered funds.
- 16 -
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2023
2.Accounting policies (continued)
Goodwill
Other intangible assets
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.
- 17 -
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2023
2.Accounting policies (continued)
Having considered the accounting treatment of the freehold property, management consider that the fair value basis provides a better indication of the value of these assets rather than the depreciated historic cost basis that had been adopted in the pasts. Therefore, when preparing these financial statements the Director has taken the decision to revise that accounting for the freehold property to the fair value model of accounting.
Depreciation is charged so as to allocate the cost of assets less their residual value over their estimated useful lives, using the straight-line method.
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.
No depreciation has been provided on freehold property during the year as following the receipt of valuation reports from a third party the Director considers the amounts included in note 14 to represent the fair value at the year end date.
At each year end, the Company reviews the carrying values of each individual tangible fixed asset for impairment indicators. Where impairment indicators are identified then the recoverable amount is compared to the carrying value in the financial statements and where necessary an impairment charge is recognised in the Statement of Comprehensive Income.
- 18 -
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2023
2.Accounting policies (continued)
Fair values are determined from market based evidence normally undertaken by professionally qualified valuers.
- 19 -
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2023
2.Accounting policies (continued)
Provisions are charged as an expense to profit or loss in the year that the Company 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. When payments are eventually made, they are charged to the provision carried in the Balance Sheet.
The Company 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, loans to related parties and investments in ordinary shares.
Debt instruments (other than those wholly repayable or receivable within one year), including loans and other accounts receivable and payable, are initially measured at present value of the future cash flows and subsequently at amortised cost using the effective interest method. Debt instruments that are payable or receivable within one year, typically trade debtors and creditors, are measured, initially and subsequently, at the undiscounted amount of the cash or other consideration expected to be paid or received. However, if the arrangements of a short-term instrument constitute a financing transaction, like the payment of a trade debt deferred beyond normal business terms or in case of an out-right short-term loan that is not at market rate, the financial asset or liability is measured, initially at the present value of future cash flows discounted at a market rate of interest for a similar debt instrument and subsequently at amortised cost, unless it qualifies as a loan from a Director in the case of a small company, or a public benefit entity concessionary loan.
Equity dividends are recognised when they become legally payable. Interim equity dividends are recognised when paid. Final equity dividends are recognised when approved by the shareholders at an Annual General Meeting.
- 20 -
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2023
Useful economic lives of property, plant and equipment The annual depreciation charge for property, plant and equipment is sensitive to changes in the useful economic lives and residual values of assets. The economic lives and residual values are re-assessed annually. They are revised when necessary to reflect current estimates, based on recoverability and expected economic utilisation of the asset. Useful economic lives of intangible fixed assets The annual amortisation charge for intangible fixed assets is sensitive to changes in the useful economic lives and residual values of assets. The economic lives and residual values are re-assessed annually. They are revised when necessary to reflect current estimates, based on recoverability and expected economic utilisation of the asset. Recoverability of trade debtors A provision for bad debts is made where it is identified that a trade debtor may not be recoverable in full by the Company. The bad debt provision is made on a specific basis against customer balances where they are not considered recoverable based upon payment history and aging profile. Valuation of stock Stock is held at the lower of cost and net realisable value. Management reviews the stock holdings and make a provision for slow moving and obsolete stock where the recoverable amount on a stock item has fallen below the cost. Slow moving stock is typically provided against where the stock line has not been sold in the past 2 years. Recoverability of amounts due from a related party Amounts receivable from a related party is assessed individually against the net assets and future expected short term profits of the counterparty. Provisions are made for any of the receivable that is considered to be irrecoverable in the short term. Fair value of freehold property The determination of the value of the freehold property is based on advice received from external parties, it is however subject to significant estimation and judgement due to the subjective nature of property valuations. As such there is the potential that the amounts realised in an open market sale could differ to the amounts at which these properties are stated in the financial statements.
- 21 -
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2023
Analysis of turnover by country of destination:
- 22 -
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2023
- 23 -
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2023
- 24 -
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2023
11.Taxation (continued)
In the Spring Budget 2021 the UK Government announced that the rate of UK Corporation tax would increase to 25% from 1 April 2023 with an introduction of a small profits rate of 19% at the same point in time. These changes were substantively enacted into law when the Finance Act 2021 was given Royal Assent on 10 June 2021.
Accordingly any deferred tax assets and liabilities are stated at 25% (2021 - 25%).
- 25 -
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2023
- 26 -
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2023
- 27 -
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2023
- 28 -
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2023
- 29 -
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2023
- 30 -
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2023
Revaluation reserve
Profit and loss account
The Company operates a defined contribution pension scheme. The assets of the scheme are held separately from those of the Company in an independently administered fund. The pension cost charge represents contributions payable by the Company to the fund and amounted to £164,443 (2022 - £128,489). Included within other creditors at the year end is £17,292 (2022 - £15,465) of unpaid contributions.
- 31 -
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2023
- 32 -
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 SEPTEMBER 2023
The smallest and largest group of companies for which consolidated financial statements incorporating the results of the Company is headed by Movac Coatings (Holdings) Limited. Copies of the consolidated financial statements of Movac Coatings (Holdings) Limited are publicly available from Companies House, Crown Way, Cardiff CF14 3UZ. Following the change of control in July 2024, the ultimate controlling party is P U Barnard.
- 33 -
|