Company registration number 12027000 (England and Wales)
BMS MACHINING LTD
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2024
BMS MACHINING LTD
COMPANY INFORMATION
Directors
Mr RP Bennett
Mr KA Littler
Company number
12027000
Registered office
Polo Works Raymond Street
Shelton
Stoke On Trent
Staffordshire
United Kingdom
ST1 4DP
Auditor
Cottons Accountants LLP
Chestnut Field House
Chestnut Field
Rugby
Warwickshire
United Kingdom
CV21 2PD
BMS MACHINING LTD
CONTENTS
Page
Strategic report
1 - 2
Directors' report
3 - 4
Independent auditor's report
5 - 8
Profit and loss account
9
Statement of comprehensive income
10
Balance sheet
11
Statement of changes in equity
12
Statement of cash flows
13
Notes to the financial statements
14 - 27
BMS MACHINING LTD
STRATEGIC REPORT
FOR THE YEAR ENDED 31 MARCH 2024
- 1 -

The directors present the strategic report for the year ended 31 March 2024.

Review of the business

Turnover increased from £7.9m to £9.3m in the year, with demand steadily increasing throughout the year, peaking in Q4. The capacity put in place in previous years was well utilised during the year, reflecting the proactive approach by the directors to support customer requirements.

As part of our ongoing improvement strategy the company invested in both productivity enhancing technologies and quality improvement systems and equipment. The company’s range of machine tools is considered suitable for ongoing operations and rather than increasing capacity with additional machine tools (in the short term), actions are ongoing to improve quality, cost, delivery and financial performance, whilst reducing overall levels of debt.

The company reduced HMRC arrears by £299k during the year, although exceptional interest costs of £137k were incurred relating to the reprofiling of finance leases as part of the process. Please see below for further information relating to the company’s HMRC position.

Principal risks and uncertainties

As with all trading businesses, the company is exposed to a variety of risks in the conduct of its normal business. The company maintains a range of insurance policies against major identified insurable risks, including (but not limited to) those related to business interruption, damage to property and equipment, damage to stocks (including customer owned), public and product liability and employer’s liability.

Whilst it is not possible to either completely record or to quantify every risk that the company faces, below is summary of those risks that the directors believe are the most significant to the company’s business and could have a material impact on future performance, causing it to differ materially from expected or historic achieved results.

Energy Pricing

The company entered into a two-year fixed price contract in December 2023, providing some stability to prices. New contracts will be required in December 2025.

Operational and Commercial risk

The company’s revenue comes primarily from the commercial vehicle and off highway markets. These markets, and hence, the company’s revenues can be subject to variations in patterns of demand. The company seeks to maintain a degree of flexibility in its cost base to manage variations in demand.

Customer concentration and relationships

The loss of, or deterioration in any single relationship could have a material impact on the company’s results. The company places customer service above all else to ensure long term relationships remain strong, now and into the future.

Equipment

The company operates standard CNC Machine Tools and where possible avoids special purpose equipment. Strategic spare parts are held either on site or at supplier sites.

 

BMS MACHINING LTD
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
- 2 -

 

Suppliers

The company takes care to ensure that alternative sources of supply remain available for goods and services on which the company’s business is reliant. We engage with suppliers to ensure they comply with our code of conduct to maintain high standards of supply.

Information Technology

The company is dependent on its IT system to operate its business efficiently without failure or interruption. Whilst data is regularly backed-up and systems subject to virus protection, any failure of back-up systems or other major IT interruption could have a disruptive effect on the company’s business.

Environmental risk

The company’s business is subject to compliance with many different laws and requirements in the UK and Europe. Great care is made to act responsibly towards the environment to achieve compliance with all relevant laws and to establish a standard above the minimum level required. Whilst the company’s manufacturing processes are not generally considered to provide a high risk of harm to the environment, the company operates systems to ensure no harm comes to the environment.

Key performance indicators

KPI Measure

 

2024

 

2023

Variance

 

Variance

 

 

£000

 

£000

 

£000

 

%

Turnover

 

£9,284

 

£7,863

 

£1,421

 

+18.1%

Operating profit (loss)

 

£509

 

£477

 

£32

 

+6.7%

Fixed asset purchases

 

£438

 

£573

 

£135

 

-23.6%

Net assets

 

£700

 

£668

 

£32

 

+4.8%

Debt

 

£5,845

 

£6,503

 

£658

 

-10.1%

Other information and explanations

Events since the Year End

The Covid and post Covid trading periods resulted with the company having HMRC arrears of £1.3m. In the year under review HMRC arrears were reduced by £299k, from £1,307,530 to £1,008,495. Whilst on an agreed TTP arrangement, significant efforts have been made since the year end to reduce the arrears position.

I am pleased to confirm that as of September 2024 all HMRC arrears have been cleared.

On behalf of the board

Mr RP Bennett
Director
28 November 2024
BMS MACHINING LTD
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 MARCH 2024
- 3 -

The directors present their annual report and financial statements for the year ended 31 March 2024.

Principal activities

The principal activity of the company continued to be that of specialist contract machining.

Results and dividends

The results for the year are set out on page 9.

No ordinary dividends were paid. 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:

Mr RP Bennett
Mr KA Littler
Auditor

The auditor, Cottons Accountants LLP, is deemed to be reappointed under section 487(2) of the Companies Act 2006.

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:

 

 

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.

Strategic report

The company has chosen in accordance with Companies Act 2006, s. 414C(11) to set out in the company's strategic report information required by Large and Medium-sized Companies and Groups (Accounts and Reports) Regulations 2008, Sch. 7 to be contained in the directors' report. It has done so in respect of future developments and research and development.

Statement of disclosure to auditor

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 auditor is 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 auditor is aware of that information.

BMS MACHINING LTD
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
- 4 -
Medium-sized companies exemption

This report has been prepared in accordance with the provisions applicable to companies entitled to the medium-sized companies exemption.

On behalf of the board
Mr RP Bennett
Director
28 November 2024
BMS MACHINING LTD
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF BMS MACHINING LTD
- 5 -

Qualified opinion on financial statements

We have audited the financial statements of BMS Machining Ltd (the 'company') for the year ended 31 March 2024 which comprise the profit and loss account, 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, except for the effects of the matters described in the basis for qualified opinion section of our report, the financial statements:

Basis for qualified opinion

We were not appointed as auditor of the company until after 31 March 2023 and thus did not observe the counting of physical inventories at the year end. We were unable to satisfy ourselves by alternative means concerning inventory quantities held at 31 March 2023, which are included in the balance sheet at £295,649 by using other audit procedures. Consequently, we were unable to determine whether any adjustment to this amount was necessary. On the basis that the opening stock value at 01 April 2024 impacts the current accounting period, we are unable to determine whether any adjustment to the profit for the year ended 31 March 2024 was necessary.

 

Additionally, we were unable to satisfactorily reconcile certain obligations in respect of finance leases and hire purchase agreements at 31 March 2023. In respect of the finance lease, the difference that we were unable to reconcile amounted to £65,302. In respect of the hire purchase agreements, the difference that we were unable to reconcile amounted to £113,309. The total potential differences therefore amounted to £178,611. On the basis that the opening finance lease and hire purchase liabilities at 01 April 2024 impacts the current accounting period, we are unable to determine whether any adjustment to the profit for the year ended 31 March 2024 was necessary.

 

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 qualified opinion.

 

In addition, were any adjustment to the balances be required due to the matters described above, the strategic report would also need to be amended.

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.

BMS MACHINING LTD
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF BMS MACHINING LTD (CONTINUED)
- 6 -

Other information

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.

 

As described in the basis for qualified opinion section of our report, we were unable to satisfy ourselves concerning the inventory quantities of £295,649 held at 31 March 2023. We have concluded that where the other information refers to the inventory balance or related balances, such as cost of sales, it may be materially misstated for the same reason. As additionally described, we were also unable to satisfactorily reconcile certain liabilities under finance agreements, with a total unreconciled balance of £178,611. We have concluded that where the other information refers to finance obligations or related balances, such as finance expenses, it may be materially misstated for the same reason.

Opinions on other matters prescribed by the Companies Act 2006

In our opinion, based on the work undertaken in the course of our audit:

Matters on which we are required to report by exception

In respect solely of the limitation on our work relating to stock:

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

 

Arising from the limitation on the scope of our work relating to inventory and obligations under finance lease and hire purchase agreements referred to above:

 

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:

BMS MACHINING LTD
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF BMS MACHINING LTD (CONTINUED)
- 7 -
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.

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:

We assessed the susceptibility of the company’s financial statements to material misstatement, including obtaining an understanding of how fraud might occur, by:

To address the risk of fraud through management bias and override of controls, we:

In response to the risk of irregularities and non-compliance with laws and regulations, we designed procedures which included, but were not limited to:

BMS MACHINING LTD
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF BMS MACHINING LTD (CONTINUED)
- 8 -

There are inherent limitations in our audit procedures described above. The more removed that laws and regulations are from financial transactions, the less likely it is that we would become aware of non-compliance. Auditing standards also limit the audit procedures required to identify 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.

Use of our report

This report is made solely to the company's members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the company's members those matters we are required to state to them in 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.

David Ingram FCCA
Senior Statutory Auditor
For and on behalf of Cottons Accountants LLP
2 December 2024
Chartered Accountants
Statutory Auditor
Chestnut Field House
Chestnut Field
Rugby
Warwickshire
United Kingdom
CV21 2PD
BMS MACHINING LTD
PROFIT AND LOSS ACCOUNT
FOR THE YEAR ENDED 31 MARCH 2024
- 9 -
2024
2023
Notes
£
£
Turnover
5
9,283,735
7,862,941
Cost of sales
(6,647,522)
(5,933,347)
Gross profit
2,636,213
1,929,594
Administrative expenses
(2,151,044)
(1,453,173)
Other operating income
23,390
417
Operating profit
6
508,559
476,838
Interest payable and similar expenses
10
(521,561)
(379,189)
(Loss)/profit before taxation
(13,002)
97,649
Tax on (loss)/profit
11
30,344
64,917
Profit for the financial year
17,342
162,566

The profit and loss account has been prepared on the basis that all operations are continuing operations.

BMS MACHINING LTD
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 MARCH 2024
- 10 -
2024
2023
£
£
Profit for the year
17,342
162,566
Other comprehensive income
-
-
Total comprehensive income for the year
17,342
162,566
BMS MACHINING LTD
BALANCE SHEET
AS AT
31 MARCH 2024
31 March 2024
- 11 -
2024
2023
Notes
£
£
£
£
Fixed assets
Goodwill
13
5,500
10,000
Other intangible assets
13
250,653
344,724
Total intangible assets
256,153
354,724
Tangible assets
14
5,412,025
5,404,435
5,668,178
5,759,159
Current assets
Stocks
16
343,196
496,097
Debtors
17
1,791,578
2,033,800
Cash at bank and in hand
11,392
75,057
2,146,166
2,604,954
Creditors: amounts falling due within one year
18
(4,206,130)
(3,996,649)
Net current liabilities
(2,059,964)
(1,391,695)
Total assets less current liabilities
3,608,214
4,367,464
Creditors: amounts falling due after more than one year
19
(2,652,615)
(3,455,407)
Provisions for liabilities
Deferred tax liability
22
269,878
243,678
(269,878)
(243,678)
Net assets
685,721
668,379
Capital and reserves
Called up share capital
24
100
100
Revaluation reserve
25
292,379
321,185
Profit and loss reserves
26
393,242
347,094
Total equity
685,721
668,379

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 28 November 2024 and are signed on its behalf by:
Mr RP Bennett
Director
Company registration number 12027000 (England and Wales)
BMS MACHINING LTD
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 MARCH 2024
- 12 -
Share capital
Revaluation reserve
Profit and loss reserves
Total
Notes
£
£
£
£
Balance at 1 April 2022
100
349,991
305,722
655,813
Year ended 31 March 2023:
Profit and total comprehensive income for the year
-
-
162,566
162,566
Dividends
12
-
-
(150,000)
(150,000)
Transfers
-
(28,806)
28,806
-
Balance at 31 March 2023
100
321,185
347,094
668,379
Year ended 31 March 2024:
Profit and total comprehensive income for the year
-
-
17,342
17,342
Transfers
-
(28,806)
28,806
-
Balance at 31 March 2024
100
292,379
393,242
685,721
BMS MACHINING LTD
STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 MARCH 2024
- 13 -
2024
2023
Notes
£
£
£
£
Cash flows from operating activities
Cash generated from operations
1
878,323
1,379,996
Interest paid
(521,561)
(379,189)
Income taxes (paid)/refunded
(1)
208,378
Net cash inflow from operating activities
356,761
1,209,185
Investing activities
Purchase of intangible assets
-
0
(16,250)
Purchase of tangible fixed assets
(237,029)
(133,399)
Repayment of loans
413,315
(135,295)
Net cash generated from/(used in) investing activities
176,286
(284,944)
Financing activities
Repayment of bank loans
(9,870)
(9,626)
Payment of finance leases obligations
(586,842)
(695,849)
Dividends paid
-
0
(150,000)
Net cash used in financing activities
(596,712)
(855,475)
Net (decrease)/increase in cash and cash equivalents
(63,665)
68,766
Cash and cash equivalents at beginning of year
75,057
6,291
Cash and cash equivalents at end of year
11,392
75,057
BMS MACHINING LTD
STATEMENT OF CASH FLOWS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
- 14 -
1
Cash generated from operations
2024
2023
£
£
Profit for the year after tax
17,342
162,566
Adjustments for:
Taxation credited
(30,344)
(64,917)
Finance costs
521,561
379,189
Amortisation and impairment of intangible assets
98,571
234,267
Depreciation and impairment of tangible fixed assets
430,929
264,041
Movements in working capital:
Decrease in stocks
152,901
219,669
Increase in debtors
(114,549)
(513,238)
(Decrease)/increase in creditors
(198,088)
698,419
Cash generated from operations
878,323
1,379,996
BMS MACHINING LTD
STATEMENT OF CASH FLOWS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
1
Cash generated from operations
(Continued)
- 15 -
2
Analysis of changes in net debt
1 April 2023
Cash flows
New finance leases
Other non-cash changes
31 March 2024
£
£
£
£
£
Cash at bank and in hand
75,057
(63,665)
-
-
11,392
Borrowings excluding overdrafts
(35,650)
9,870
-
-
(25,780)
Obligations under finance leases
(3,917,976)
586,842
(201,490)
1
(3,532,623)
(3,878,569)
533,047
(201,490)
1
(3,547,011)
3
Accounting policies
Company information

BMS Machining Ltd is a private company limited by shares incorporated in England and Wales. The registered office is Polo Works Raymond Street, Shelton, Stoke On Trent, Staffordshire, United Kingdom, ST1 4DP.

3.1
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, modified to include the revaluation of plant and machinery at fair value. The principal accounting policies adopted are set out below.

3.2
Going concern

Atruet the time of approving the financial statements, the directors have a reasonable expectation that the company has adequate resources to continue in operational existence for the foreseeable future. Thus the directors continue to adopt the going concern basis of accounting in preparing the financial statements.

3.3
Turnover

Turnover is recognised at the fair value of the consideration received or receivable for goods and services provided in the normal course of business, and is shown net of VAT and other sales related taxes. The fair value of consideration takes into account trade discounts, settlement discounts and volume rebates.

 

When cash inflows are deferred and represent a financing arrangement, the fair value of the consideration is the present value of the future receipts. The difference between the fair value of the consideration and the nominal amount received is recognised as interest income.

3.4
Research and development expenditure

Research expenditure is written off against profits in the year in which it is incurred. Identifiable development expenditure is capitalised to the extent that the technical, commercial and financial feasibility can be demonstrated.

BMS MACHINING LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2024
3
Accounting policies
(Continued)
- 16 -
3.5
Intangible fixed assets - goodwill

Goodwill represents the excess of the cost of acquisition of unincorporated businesses over the fair value of net assets acquired. It is initially recognised as an asset at cost and is subsequently measured at cost less accumulated amortisation and accumulated impairment losses. Goodwill is considered to have a finite useful life and is amortised on a systematic basis over its expected life, which is 6.67 years.

 

For the purposes of impairment testing, goodwill is allocated to the cash-generating units expected to benefit from the acquisition. Cash-generating units to which goodwill has been allocated are tested for impairment at least annually, or more frequently when there is an indication that the unit may be impaired. If the recoverable amount of the cash-generating unit is less than the carrying amount of the unit, the impairment loss is allocated first to reduce the carrying amount of any goodwill allocated to the unit and then to the other assets of the unit pro-rata on the basis of the carrying amount of each asset in the unit.

3.6
Intangible fixed assets other than goodwill

Intangible assets acquired separately from a business are recognised at cost and are subsequently measured at cost less accumulated amortisation and accumulated impairment losses.

 

Intangible assets acquired on business combinations are recognised separately from goodwill at the acquisition date where it is probable that the expected future economic benefits that are attributable to the asset will flow to the entity and the fair value of the asset can be measured reliably; the intangible asset arises from contractual or other legal rights; and the intangible asset is separable from the entity.

Amortisation is recognised so as to write off the cost or valuation of assets less their residual values over their useful lives on the following bases:

Development costs
5 years
3.7
Tangible fixed assets

Tangible fixed assets are initially measured at cost and subsequently measured at cost or valuation, net of depreciation and any impairment losses.

Depreciation is recognised so as to write off the cost or valuation of assets less their residual values over their useful lives on the following bases:

Leasehold land and buildings
Straight line over 15 years
Plant and equipment
Straight line over 15 years
Computers
Straight line over 6 years

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.

3.8
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.

 

Stocks held for distribution at no or nominal consideration are measured at the lower of cost and replacement cost, adjusted where applicable for any loss of service potential.

3.9
Financial instruments
BMS MACHINING LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
3
Accounting policies
(Continued)
- 17 -
Other financial assets

Other financial assets, including investments in equity instruments which are not subsidiaries, associates or joint ventures, are initially measured at fair value, which is normally the transaction price. Such assets are subsequently carried at fair value and the changes in fair value are recognised in profit or loss, except that investments in equity instruments that are not publicly traded and whose fair values cannot be measured reliably are measured at cost less impairment.

Impairment of financial assets

Financial assets, other than those held at fair value through profit and loss, are assessed for indicators of impairment at each reporting end date.

 

Financial assets are impaired where there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial asset, the estimated future cash flows have been affected. If an asset is impaired, the impairment loss is the difference between the carrying amount and the present value of the estimated cash flows discounted at the asset’s original effective interest rate. The impairment loss is recognised in profit or loss.

 

If there is a decrease in the impairment loss arising from an event occurring after the impairment was recognised, the impairment is reversed. The reversal is such that the current carrying amount does not exceed what the carrying amount would have been, had the impairment not previously been recognised. The impairment reversal is recognised in profit or loss.

Derecognition of financial assets

Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire or are settled, or when the company transfers the financial asset and substantially all the risks and rewards of ownership to another entity, or if some significant risks and rewards of ownership are retained but control of the asset has transferred to another party that is able to sell the asset in its entirety to an unrelated third party.

Other financial liabilities

Derivatives, including interest rate swaps and forward foreign exchange contracts, are not basic financial instruments. Derivatives are initially recognised at fair value on the date a derivative contract is entered into and are subsequently re-measured at their fair value. Changes in the fair value of derivatives are recognised in profit or loss in finance costs or finance income as appropriate, unless hedge accounting is applied and the hedge is a cash flow hedge.

 

Debt instruments that do not meet the conditions in FRS 102 paragraph 11.9 are subsequently measured at fair value through profit or loss. Debt instruments may be designated as being measured at fair value through profit or loss to eliminate or reduce an accounting mismatch or if the instruments are measured and their performance evaluated on a fair value basis in accordance with a documented risk management or investment strategy.

Derecognition of financial liabilities

Financial liabilities are derecognised when the company’s contractual obligations expire or are discharged or cancelled.

3.10
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.

BMS MACHINING LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
3
Accounting policies
(Continued)
- 18 -
Deferred tax

Deferred tax liabilities are generally recognised for all timing differences and deferred tax assets are recognised to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits. Such assets and liabilities are not recognised if the timing difference arises from goodwill or from the initial recognition of other assets and liabilities in a transaction that affects neither the tax profit nor the accounting profit.

 

The carrying amount of deferred tax assets is reviewed at each reporting end date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realised. Deferred tax is charged or credited in the profit and loss account, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity. Deferred tax assets and liabilities are offset when the company has a legally enforceable right to offset current tax assets and liabilities and the deferred tax assets and liabilities relate to taxes levied by the same tax authority.

3.11
Retirement benefits

Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.

3.12
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.

3.13
Government grants

Government grants are recognised at the fair value of the asset received or receivable when there is reasonable assurance that the grant conditions will be met and the grants will be received.

 

A grant that specifies performance conditions is recognised in income when the performance conditions are met. Where a grant does not specify performance conditions it is recognised in income when the proceeds are received or receivable. A grant received before the recognition criteria are satisfied is recognised as a liability.

4
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.

BMS MACHINING LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
4
Judgements and key sources of estimation uncertainty
(Continued)
- 19 -
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.

Depreciation policy used

Amortisation policy used

Work in progress valuation

Labour accrual

5
Turnover and other revenue
2024
2023
£
£
Turnover analysed by class of business
Sale of goods
9,283,735
7,862,941
2024
2023
£
£
Other revenue
Grants received
23,390
-
6
Operating profit
2024
2023
Operating profit for the year is stated after charging/(crediting):
£
£
Exchange losses
204
-
0
Government grants
(23,390)
-
Depreciation of owned tangible fixed assets
10,911
10,526
Depreciation of tangible fixed assets held under finance leases
420,018
253,515
Amortisation of intangible assets
98,571
234,267
Operating lease charges
317,211
278,607
7
Auditor's remuneration
2024
2023
Fees payable to the company's auditor and associates:
£
£
For audit services
Audit of the financial statements of the company
11,000
11,000
11,000
11,000
For other services
All other non-audit services
10,913
7,683
10,913
7,683
BMS MACHINING LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
- 20 -
8
Employees

The average monthly number of persons (including directors) employed by the company during the year was:

2024
2023
Number
Number
134
123

Their aggregate remuneration comprised:

2024
2023
£
£
Wages and salaries
4,015,051
3,556,899
Social security costs
355,941
339,413
Pension costs
67,284
64,122
4,438,276
3,960,434
9
Directors' remuneration
2024
2023
£
£
Remuneration for qualifying services
175,087
66,793
10
Interest payable and similar expenses
2024
2023
£
£
Interest on financial liabilities measured at amortised cost:
Interest on bank overdrafts and loans
779
1,022
Other interest on financial liabilities
184,241
200,350
185,020
201,372
Other finance costs:
Interest on finance leases and hire purchase contracts
336,541
177,817
521,561
379,189
11
Taxation
2024
2023
£
£
Current tax
UK corporation tax on profits for the current period
(56,544)
(127,196)
BMS MACHINING LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
11
Taxation
2024
2023
£
£
(Continued)
- 21 -
Deferred tax
Origination and reversal of timing differences
33,894
62,279
Adjustment in respect of prior periods
(7,694)
-
0
Total deferred tax
26,200
62,279
Total tax credit
(30,344)
(64,917)

The actual credit for the year can be reconciled to the expected (credit)/charge for the year based on the profit or loss and the standard rate of tax as follows:

2024
2023
£
£
(Loss)/profit before taxation
(13,002)
97,649
Expected tax (credit)/charge based on the standard rate of corporation tax in the UK of 19.00% (2023: 19.00%)
(2,470)
18,553
Tax effect of expenses that are not deductible in determining taxable profit
9,294
24,205
Tax effect of utilisation of tax losses not previously recognised
-
0
52,206
Permanent capital allowances in excess of depreciation
-
0
(32,685)
Depreciation on assets not qualifying for tax allowances
230
-
0
Amortisation on assets not qualifying for tax allowances
18,729
-
0
Research and development tax credit
(48,433)
(127,196)
Deferred tax adjustments in respect of prior years
(7,694)
-
0
Taxation credit for the year
(30,344)
(64,917)
12
Dividends
2024
2023
£
£
Interim paid
-
0
150,000
BMS MACHINING LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
- 22 -
13
Intangible fixed assets
Goodwill
Development costs
Total
£
£
£
Cost
At 1 April 2023 and 31 March 2024
30,000
816,250
846,250
Amortisation and impairment
At 1 April 2023
20,000
471,526
491,526
Amortisation charged for the year
4,500
94,071
98,571
At 31 March 2024
24,500
565,597
590,097
Carrying amount
At 31 March 2024
5,500
250,653
256,153
At 31 March 2023
10,000
344,724
354,724

Development costs include software development for tooling machinery developed in-house.

 

14
Tangible fixed assets
Leasehold land and buildings
Plant and equipment
Computers
Total
£
£
£
£
Cost or valuation
At 1 April 2023
5,000
6,152,289
39,755
6,197,044
Additions
35,103
387,910
15,506
438,519
At 31 March 2024
40,103
6,540,199
55,261
6,635,563
Depreciation and impairment
At 1 April 2023
1,000
770,997
20,612
792,609
Depreciation charged in the year
2,674
419,045
9,210
430,929
At 31 March 2024
3,674
1,190,042
29,822
1,223,538
Carrying amount
At 31 March 2024
36,429
5,350,157
25,439
5,412,025
At 31 March 2023
4,000
5,381,292
19,143
5,404,435

The net carrying value of tangible fixed assets includes the following in respect of assets held under finance leases or hire purchase contracts.

2024
2023
£
£
Plant and equipment
5,112,817
5,331,345
BMS MACHINING LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
14
Tangible fixed assets
(Continued)
- 23 -

Plant and equipment with a carrying amount of £4,638,215 were revalued at 31st March 2022 by the directors on the basis of market value. The valuation was based on recent market transactions on arm's length terms for similar items of plant.

The following assets are carried at valuation. If the assets were measured using the cost model, the carrying amounts would be as follows:

Plant and equipment
2024
2023
£
£
Cost
5,645,644
5,645,644
Accumulated depreciation
(1,113,598)
(737,221)
Carrying value
4,532,046
4,908,423
15
Financial instruments
2024
2023
£
£
Carrying amount of financial assets
Debt instruments measured at amortised cost
1,600,604
1,793,295
Carrying amount of financial liabilities
Measured at fair value through profit or loss
Measured at amortised cost
5,637,494
6,487,194
16
Stocks
2024
2023
£
£
Finished goods and goods for resale
343,196
496,097
17
Debtors
2024
2023
Amounts falling due within one year:
£
£
Trade debtors
1,367,114
1,379,980
Corporation tax recoverable
183,740
127,196
Other debtors
233,490
413,315
Prepayments and accrued income
7,234
113,309
1,791,578
2,033,800
BMS MACHINING LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
- 24 -
18
Creditors: amounts falling due within one year
2024
2023
Notes
£
£
Bank loans
10,119
9,870
Obligations under finance leases
20
895,669
1,043,773
Trade creditors
631,133
635,733
Taxation and social security
1,221,251
964,862
Other creditors
1,311,796
1,261,411
Accruals and deferred income
136,162
81,000
4,206,130
3,996,649

Included within other creditors is a balance of £1,278,463 (2023: £1,241,597) owed to Bibby Financial Services Ltd in respect of invoice finance facilities. These liabilities are secured by way of fixed and floating charge over the assets of the company.

 

Obligations under finance leases are secured against the underlying assets to which the lease relates.

19
Creditors: amounts falling due after more than one year
2024
2023
Notes
£
£
Bank loans and overdrafts
15,661
25,780
Obligations under finance leases
20
2,636,954
2,874,203
Other creditors
-
0
555,424
2,652,615
3,455,407

Obligations under finance leases are secured against the underlying assets to which the lease relates.

20
Finance lease obligations
2024
2023
Future minimum lease payments due under finance leases:
£
£
Within one year
1,059,589
1,123,736
In two to five years
3,712,143
4,925,092
4,771,732
6,048,828
Less: future finance charges
(1,239,109)
(2,130,852)
3,532,623
3,917,976

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 weighted average lease term is 47 months. All leases are on a fixed repayment basis and no arrangements have been entered into for contingent rental payments.

 

Amounts payable under hire purchase agreements are secured against the assets to which the agreements relate.

BMS MACHINING LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
- 25 -
21
Provisions for liabilities
2024
2023
£
£
Deferred tax liabilities
22
269,878
243,678
269,878
243,678
22
Deferred taxation

The following are the major deferred tax liabilities and assets recognised by the company and movements thereon:

Liabilities
Liabilities
2024
2023
Balances:
£
£
Accelerated capital allowances
940,553
926,998
Tax losses
(670,675)
(683,320)
269,878
243,678
2024
Movements in the year:
£
Liability at 1 April 2023
243,678
Charge to profit or loss
11,721
Liability at 31 March 2024
255,399
23
Retirement benefit schemes
2024
2023
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
67,284
64,122

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 amount owed into the defined pension scheme at the balance sheet date amounted to £36,594 (2023: £19,814)

24
Share capital
2024
2023
2024
2023
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary of £1 each
100
100
100
100
BMS MACHINING LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
24
Share capital
(Continued)
- 26 -

The company has one class of ordinary shares which carry no right to fixed income. These shares carry voting rights.

25
Revaluation reserve
2024
2023
£
£
At the beginning of the year
321,185
349,991
Transfer to retained earnings
(28,806)
(28,806)
At the end of the year
292,379
321,185

The revaluation reserve represents the excess of market value of revalued tangible fixed assets above book value.

26
Profit and loss reserves
2024
2023
£
£
At the beginning of the year
347,094
305,722
Profit for the year
17,342
162,566
Dividends declared and paid in the year
-
(150,000)
Transfer from revaluation reserve
28,806
28,806
At the end of the year
393,242
347,094
27
Related party transactions
Transactions with related parties

During the year the company entered into the following transactions with related parties:

Services received
2024
2023
£
£
Entities under common control
600,000
-

The following amounts were outstanding at the reporting end date:

2024
2023
Amounts due from related parties
£
£
Entities under common control
233,490
-
28
Directors' transactions

Advances or credits have been granted by the company to its directors as follows:

BMS MACHINING LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
28
Directors' transactions
(Continued)
- 27 -
Description
% Rate
Opening balance
Amounts repaid
Closing balance
£
£
£
Loan
-
413,315
(413,315)
-
413,315
(413,315)
-
29
Ultimate controlling party

The controlling party is Mr R Bennett & Mrs J Bennett by way of their combined shareholding.

30
Auditor's liability limitation agreement

Upon appointment of Cottons Accountants LLP as auditors, the company entered into a limitation liability agreement with the auditors and this was approved by resolution on 10th June 2024. Liability is limited to the lesser of 20 times the audit fee or £220,000. In accordance with section 537 of CA06, the effect of the liability limitation agreement is to limit the auditor's liability to less than such amount as is fair and reasonable, as determined by that section, the agreement shall have effect as if it limited the liability to such amount as is fair and reasonable, as so determined.

 

The agreement limits the liability owed to the company by the auditors in respect of any negligence, default or breach of duty, or breach of trust, occurring in the course of the audit of the accounts for the year ending 31st March 2024.

 

The agreement does not limit liability for any instance of fraud or dishonesty on behalf of the auditor or any other liability that cannot be excluded or restricted by applicable laws or regulations.

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