Company registration number 03045150 (England and Wales)
MARTECH (UK) LTD
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 APRIL 2024
MARTECH (UK) LTD
COMPANY INFORMATION
Directors
Mr C A Marney
Mr D Marney
Mr A C Nixon
Company number
03045150
Registered office
Conway House
Thornhill Road Business Park
Tenter Fields
Dewsbury
West Yorkshire
WF12 9QW
Auditor
Azets Audit Services Limited
12 King Street
Leeds
LS1 2HL
MARTECH (UK) LTD
CONTENTS
Page
Strategic report
1 - 2
Directors' report
3
Directors' responsibilities statement
4
Independent auditor's report
5 - 7
Statement of comprehensive income
8
Balance sheet
9
Statement of changes in equity
10
Statement of cash flows
11
Notes to the financial statements
12 - 28
MARTECH (UK) LTD
STRATEGIC REPORT
FOR THE YEAR ENDED 30 APRIL 2024
- 1 -
The directors present the strategic report for the year ended 30 April 2024.
Fair review of the business and future developments
The financial statements for the year ended 30 April 2024 show turnover of £7,840,336.
Gross Profit was £2,324,035 which shows a £250,000 increase on the previous year. Profit Margin was 30% which stays healthy despite rising material, transport and labour costs throughout the year. This was in comparison to 26% for the prior year.
We continued to see a growing demand from customers winning projects to retro-fit existing premises and regenerate older luminaries and this is another area that we specialise in due to continued investment in our new workshop facility. With a product range further enhanced by integration of advanced lighting control technology, we feel we are firmly in position in the market as a leader of quality lighting solutions that fully embrace current industry needs.
One positive for the lighting industry in the year was new legislation restricting the manufacture of a variety of fluorescent lamps and halogen capsule lamps. Any that are still in use will, in time, need to be replaced and we are well placed to take advantage of this new legislation. CFL Lamps have been in the industry for a number of years but with more energy efficient solutions customers no longer need to rely on old CFL lamps.
We remain committed to improving our sustainability throughout the business and now recycle, or re-use, all of our waste cardboard and plastic. Our buildings also operate with energy saving LED lighting and control systems to further enhance our sustainability and assist with the reduction of our carbon footprint. We measure, and report on, our sustainability and remain committed to our responsibilities under WEEE directives.
During the year the energy market, whilst still tough, saw wholesale gas and electricity costs falling which we saw the benefit of towards the end of our financial year. Existing contracts which we fixed at higher prices are due to expire post year end and we should be able to see further cost reductions in future periods.
We continued to see interest rates increase through the year which again contributed to increased borrowing costs and although we saw inflation ease the National Living Wage increase added costs that were passed on to us through our supply chain.
Our investment property, Calder Works, saw an increase in its valuation which further bolstered our balance sheet, and our sitting tenants agreed an extension of their current lease for a further 5 years to 2029 at an increased rental value.
Key performance indicators
The directors use a number of key performance indicators to monitor business performance.
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Profit/(loss) for the year | | | | |
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MARTECH (UK) LTD
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 30 APRIL 2024
- 2 -
Principal risks and uncertainties
Risks are formally reviewed by the Directors and Senior Leadership Team as part of our ISO9001 accreditation requirements, upon which procedures are implemented to monitor and mitigate them.
Competitive Risks
The lighting industry continues to be highly competitive throughout the UK and the wider global market. We face continued pressure to combat the availability of cheaper alternatives from overseas. Whilst these products are not comparable to ours, from a quality or technical point of view, it is very much a price driven market. Our strategy has always been to supply high quality, British made, low energy lighting solutions that ultimately offer better value to our customers.
Credit Risk and Cashflow
We continue to insure all our trade debtors and do bi-annual credit checks of all customers. We suffered some bad debt during the year, though compared to turnover this was negligible, and this is testament to our firm approach in offering credit terms. Debtor days also reduced from the previous year whilst creditor days also reduced which is a result of continued profitability in financial years post Covid leading to better cash reserves. Cashflows are produced on a rolling 12-week basis and as part of our annual budget pack which are reviewed by the board.
Legislative and Political Risks
The National Living Wage rose again during the year by 10% which, for an SME like ours, continues to affect profitability at a time when business confidence is severely dented putting future pressure on our business. Continued political uncertainty within the UK also affected the wider economy and we see continued business contraction, particularly in the construction sector.
Foreign exchange risk
We import 25% of all components from overseas, primarily Asia, so we are reliant on a strong pound to increase our buying power. We saw, during the year, a more resilient pound against the USD and less fluctuations than previous years. We continue to use forward contracts to “lock in” favourable exchange rates and this continues to mitigate any potential exchange risks.
Mr C A Marney
Director
20 January 2025
MARTECH (UK) LTD
DIRECTORS' REPORT
FOR THE YEAR ENDED 30 APRIL 2024
- 3 -
The directors present their annual report and financial statements for the year ended 30 April 2024.
Principal activities
The principal activity of the company continued to be that of developing and distributing electrical lighting equipment.
Results and dividends
The results for the year are set out on page 8.
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 C A Marney
Mr D Marney
Mr A C Nixon
Auditor
The auditor, Azets Audit Services Limited, is deemed to be reappointed under section 487(2) of the Companies Act 2006.
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.
On behalf of the board
Mr C A Marney
Director
20 January 2025
MARTECH (UK) LTD
DIRECTORS' RESPONSIBILITIES STATEMENT
FOR THE YEAR ENDED 30 APRIL 2024
- 4 -
The directors are responsible for preparing the annual report and the financial statements in accordance with applicable law and regulations.
Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the company and of the profit or loss of the company for that period. In preparing these financial statements, the directors are required to:
select suitable accounting policies and then apply them consistently;
make judgements and accounting estimates that are reasonable and prudent; and,
prepare the financial statements on the going concern basis unless it is inappropriate to presume that the company will continue in business.
The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the company’s transactions and disclose with reasonable accuracy at any time the financial position of the company and enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
MARTECH (UK) LTD
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF MARTECH (UK) LTD
- 5 -
Opinion
We have audited the financial statements of Martech (UK) Ltd (the 'company') for the year ended 30 April 2024 which comprise the statement of comprehensive income, the balance sheet, the statement of changes in equity, the statement of cash flows and notes to the financial statements, including significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice).
In our opinion the financial statements:
give a true and fair view of the state of the company's affairs as at 30 April 2024 and of its profit for the year then ended;
have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and,
have been prepared in accordance with the requirements of the Companies Act 2006.
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditor's responsibilities for the audit of the financial statements section of our report. We are independent of the company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC’s Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Conclusions relating to going concern
In auditing the financial statements, we have concluded that the directors' use of the going concern basis of accounting in the preparation of the financial statements is appropriate.
Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the company's ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.
Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.
The other information comprises the information included in the annual report other than the financial statements and our auditor's report thereon. The directors are responsible for the other information contained within the annual report. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the course of the audit, or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.
We have nothing to report in this regard.
Opinions on other matters prescribed by the Companies Act 2006
In our opinion, based on the work undertaken in the course of our audit:
the information given in the strategic report and the directors' report for the financial year for which the financial statements are prepared is consistent with the financial statements; and,
the strategic report and the directors' report have been prepared in accordance with applicable legal requirements.
MARTECH (UK) LTD
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF MARTECH (UK) LTD
- 6 -
Matters on which we are required to report by exception
In the light of the knowledge and understanding of the company and its environment obtained in the course of the audit, we have not identified material misstatements in the strategic report or the directors' report.
We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to report to you if, in our opinion:
adequate accounting records have not been kept, or returns adequate for our audit have not been received from branches not visited by us; or,
the financial statements are not in agreement with the accounting records and returns; or,
certain disclosures of remuneration specified by law are not made; or,
we have not received all the information and explanations we require for our audit.
Responsibilities of directors
As explained more fully in the directors' responsibilities statement, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. In preparing the financial statements, the directors are responsible for assessing the company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the company or to cease operations, or have no realistic alternative but to do so.
Auditor's responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.
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.
MARTECH (UK) LTD
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF MARTECH (UK) LTD
- 7 -
Extent to which the audit was considered capable of detecting irregularities, including fraud
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above and on the Financial Reporting Council’s website, to detect material misstatements in respect of irregularities, including fraud.
We obtain and update our understanding of the entity, its activities, its control environment, and likely future developments, including in relation to the legal and regulatory framework applicable and how the entity is complying with that framework. Based on this understanding, we identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. This includes consideration of the risk of acts by the entity that were contrary to applicable laws and regulations, including fraud.
In response to the risk of irregularities and non-compliance with laws and regulations, including fraud, we designed procedures which included:
Enquiry of management and those charged with governance around actual and potential litigation and claims as well as actual, suspected and alleged fraud;
Assessing the extent of compliance with the laws and regulations considered to have a direct material effect on the financial statements or the operations of the company through enquiry and inspection;
Reviewing financial statement disclosures and testing to supporting documentation to assess compliance with applicable laws and regulations;
Performing audit work over the risk of management bias and override of controls, including testing of journal entries and other adjustments for appropriateness, evaluating the business rationale of significant transactions outside the normal course of business and reviewing accounting estimates for indicators of potential bias; and,
Performing audit work over the timing and recognition of revenue and in particular whether it has been recorded in the correct accounting period.
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 of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
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.
Daisy Marsden
Senior Statutory Auditor
For and on behalf of Azets Audit Services Limited
20 January 2025
Chartered Accountants
Statutory Auditor
12 King Street
Leeds
LS1 2HL
MARTECH (UK) LTD
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 30 APRIL 2024
- 8 -
2024
2023
Notes
£
£
Turnover
3
7,840,336
8,092,380
Cost of sales
(5,516,301)
(6,022,024)
Gross profit
2,324,035
2,070,356
Administrative expenses
(2,149,246)
(1,973,842)
Other operating income
156,917
136,371
Operating profit
4
331,706
232,885
Interest receivable and similar income
54
6
Interest payable and similar expenses
6
(286,104)
(209,506)
Fair value adjustments
7
100,000
200,000
Profit before taxation
145,656
223,385
Tax on profit
8
(14,164)
4,771
Profit for the financial year
131,492
228,156
There was no other comprehensive income for the year ended 30 April 2024 (2023 - £nil).
The statement of comprehensive income has been prepared on the basis that all operations are continuing operations.
MARTECH (UK) LTD
BALANCE SHEET
AS AT
30 APRIL 2024
30 April 2024
- 9 -
2024
2023
Notes
£
£
£
£
Fixed assets
Tangible assets
9
1,218,372
1,166,772
Investment property
10
3,833,006
3,733,006
Investments
11
1,000
1,000
5,052,378
4,900,778
Current assets
Stocks
13
1,845,903
2,174,357
Debtors
14
1,754,350
1,716,247
Cash at bank and in hand
14,598
51,111
3,614,851
3,941,715
Creditors: amounts falling due within one year
15
(3,066,659)
(3,626,653)
Net current assets
548,192
315,062
Total assets less current liabilities
5,600,570
5,215,840
Creditors: amounts falling due after more than one year
16
(1,879,276)
(1,638,161)
Provisions for liabilities
Deferred tax liability
19
169,153
157,030
(169,153)
(157,030)
Net assets
3,552,141
3,420,649
Capital and reserves
Called up share capital
21
423,400
423,400
Capital redemption reserve
156,600
156,600
Profit and loss reserves
2,972,141
2,840,649
Total equity
3,552,141
3,420,649
The financial statements were approved by the board of directors and authorised for issue on 20 January 2025 and are signed on its behalf by:
Mr C A Marney
Director
Company Registration No. 03045150
MARTECH (UK) LTD
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 30 APRIL 2024
- 10 -
Share capital
Capital redemption reserve
Profit and loss reserves
Total
£
£
£
£
Balance at 1 May 2022
423,400
156,600
2,612,493
3,192,493
Year ended 30 April 2023:
Profit and total comprehensive income for the year
-
-
228,156
228,156
Balance at 30 April 2023
423,400
156,600
2,840,649
3,420,649
Year ended 30 April 2024:
Profit and total comprehensive income for the year
-
-
131,492
131,492
Balance at 30 April 2024
423,400
156,600
2,972,141
3,552,141
MARTECH (UK) LTD
STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 30 APRIL 2024
- 11 -
2024
2023
Notes
£
£
£
£
Cash flows from operating activities
Cash generated from operations
26
309,522
346,650
Interest paid
(286,104)
(209,506)
Net cash inflow from operating activities
23,418
137,144
Investing activities
Purchase of tangible fixed assets
(32,892)
(140,718)
Interest received
54
6
Net cash used in investing activities
(32,838)
(140,712)
Financing activities
Proceeds from new bank loans
1,694,332
Repayment of bank loans
(1,669,051)
(103,223)
Payment of finance leases obligations
(52,374)
75,984
Net cash used in financing activities
(27,093)
(27,239)
Net decrease in cash and cash equivalents
(36,513)
(30,807)
Cash and cash equivalents at beginning of year
51,111
81,918
Cash and cash equivalents at end of year
14,598
51,111
MARTECH (UK) LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 APRIL 2024
- 12 -
1
Accounting policies
Company information
Martech (UK) Ltd is a private company limited by shares incorporated in England and Wales. The registered office is Conway House, Thornhill Road Business Park, Tenter Fields, Dewsbury, WF12 9QW.
1.1
Accounting convention
These financial statements have been prepared in accordance with FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” (“FRS 102”) and the requirements of the Companies Act 2006.
The financial statements are prepared in sterling, which is the functional currency of the company. Monetary amounts in these financial statements are rounded to the nearest £1.
The financial statements have been prepared under the historical cost convention, modified to include investment properties and certain financial instruments at fair value. The principal accounting policies adopted are set out below.
The company has taken advantage of the exemption under section 400 of the Companies Act 2006 not to prepare consolidated accounts on the grounds that all subsidiaries are dormant. The financial statements present information about the company as an individual entity and not about its group.
1.2
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.
1.3
Turnover
Turnover represents amounts receivable for electrical lighting goods net of VAT and trade discounts.
Turnover from the sale of goods is recognised when the significant risks and rewards of ownership of the goods have passed to the buyer (usually on dispatch of the goods), the amount of turnover can be measured reliably, it is probable that the economic benefits associated with the transaction will flow to the entity and the costs incurred or to be incurred in respect of the transaction can be measured reliably.
1.4
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.
1.5
Tangible fixed assets
Tangible fixed assets are initially measured at cost and subsequently measured at cost or valuation, net of depreciation and any impairment losses.
Depreciation is recognised so as to write off the cost or valuation of assets less their residual values over their useful lives on the following bases:
Freehold land and buildings
2% straight line
Plant and machinery
33% reducing balance
Motor vehicles
25% reducing balance
Freehold land and assets in the course of construction are not depreciated.
MARTECH (UK) LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 APRIL 2024
1
Accounting policies
(Continued)
- 13 -
The gain or loss arising on the disposal of an asset is determined as the difference between the sale proceeds and the carrying value of the asset, and is credited or charged to profit or loss.
1.6
Investment property
Investment property, which is property held to earn rentals and/or for capital appreciation, is initially recognised at cost, which includes the purchase cost and any directly attributable expenditure. Subsequently it is measured at fair value at the reporting end date. Changes in fair value are recognised in profit or loss.
1.7
Fixed asset investments
Interests in subsidiaries are initially measured at cost and subsequently measured at cost less any accumulated impairment losses. The investments are assessed for impairment at each reporting date and any impairment losses or reversals of impairment losses are recognised immediately in profit or loss.
A subsidiary is an entity controlled by the company. Control is the power to govern the financial and operating policies of the entity so as to obtain benefits from its activities.
1.8
Impairment of fixed assets
At each reporting period end date, the company reviews the carrying amounts of its tangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where it is not possible to estimate the recoverable amount of an individual asset, the company estimates the recoverable amount of the cash-generating unit to which the asset belongs.
Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.
If the recoverable amount of an asset is estimated to be less than its carrying amount, the carrying amount of the asset is reduced to its recoverable amount. An impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the impairment loss is treated as a revaluation decrease.
Recognised impairment losses are reversed if, and only if, the reasons for the impairment loss have ceased to apply. Where an impairment loss subsequently reverses, the carrying amount of the asset is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset in prior years. A reversal of an impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the reversal of the impairment loss is treated as a revaluation increase.
1.9
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.
At each reporting date, an assessment is made for impairment. Any excess of the carrying amount of stocks over its estimated selling price less costs to complete and sell is recognised as an impairment loss in profit or loss. Reversals of impairment losses are also recognised in profit or loss.
MARTECH (UK) LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 APRIL 2024
1
Accounting policies
(Continued)
- 14 -
1.10
Cash and cash equivalents
Cash and cash equivalents are basic financial assets and include cash in hand, deposits held at call with banks, other short-term liquid investments with original maturities of three months or less, and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities.
1.11
Financial instruments
The company has elected to apply the provisions of Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instruments Issues’ of FRS 102 to all of its financial instruments.
Financial instruments are recognised in the company's balance sheet when the company becomes party to the contractual provisions of the instrument.
Financial assets and liabilities are offset, with the net amounts presented in the financial statements, when there is a legally enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously.
Basic financial assets
Basic financial assets, which include debtors and cash and bank balances, are initially measured at transaction price including transaction costs and are subsequently carried at amortised cost using the effective interest method unless the arrangement constitutes a financing transaction, where the transaction is measured at the present value of the future receipts discounted at a market rate of interest. Financial assets classified as receivable within one year are not amortised.
Other financial assets
Other financial assets, including investments in equity instruments which are not subsidiaries, associates or joint ventures, are initially measured at fair value, which is normally the transaction price. Such assets are subsequently carried at fair value and the changes in fair value are recognised in profit or loss, except that investments in equity instruments that are not publicly traded and whose fair values cannot be measured reliably are measured at cost less impairment.
Trade debtors, loans and other receivables that have fixed or determinable payments that are not quoted in an active market are classified as 'loans and receivables'. Loans and receivables are measured at amortised cost using the effective interest method, less any impairment.
Interest is recognised by applying the effective interest rate, except for short-term receivables when the recognition of interest would be immaterial. The effective interest method is a method of calculating the amortised cost of a debt instrument and of allocating the interest income over the relevant period. The effective interest rate is the rate that exactly discounts estimated future cash receipts through the expected life of the debt instrument to the net carrying amount on initial recognition.
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.
MARTECH (UK) LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 APRIL 2024
1
Accounting policies
(Continued)
- 15 -
Derecognition of financial assets
Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire or are settled, or when the company transfers the financial asset and substantially all the risks and rewards of ownership to another entity, or if some significant risks and rewards of ownership are retained but control of the asset has transferred to another party that is able to sell the asset in its entirety to an unrelated third party.
Classification of financial liabilities
Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the company after deducting all of its liabilities.
Basic financial liabilities
Basic financial liabilities, including creditors and bank loans, are initially recognised at transaction price unless the arrangement constitutes a financing transaction, where the debt instrument is measured at the present value of the future payments discounted at a market rate of interest. Financial liabilities classified as payable within one year are not amortised.
Debt instruments are subsequently carried at amortised cost, using the effective interest rate method.
Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Amounts payable are classified as current liabilities if payment is due within one year or less. If not, they are presented as non-current liabilities. Trade creditors are recognised initially at transaction price and subsequently measured at amortised cost using the effective interest method.
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.
1.12
Equity instruments
Equity instruments issued by the company are recorded at the proceeds received, net of transaction costs. Dividends payable on equity instruments are recognised as liabilities once they are no longer at the discretion of the company.
Changes in the fair value of derivatives that are designated and quality as fair value hedges are recognised in profit or loss immediately, together with any changes in the fair value of the hedged assets or liability that are attributable to the hedged risk.
MARTECH (UK) LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 APRIL 2024
1
Accounting policies
(Continued)
- 16 -
1.13
Taxation
The tax expense represents the sum of the tax currently payable and deferred tax.
Current tax
The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the profit and loss account because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The company’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.
Deferred tax
Deferred tax liabilities are generally recognised for all timing differences and deferred tax assets are recognised to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits. Such assets and liabilities are not recognised if the timing difference arises from goodwill or from the initial recognition of other assets and liabilities in a transaction that affects neither the tax profit nor the accounting profit.
The carrying amount of deferred tax assets is reviewed at each reporting end date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realised. Deferred tax is charged or credited in the profit and loss account, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity. Deferred tax assets and liabilities are offset when the company has a legally enforceable right to offset current tax assets and liabilities and the deferred tax assets and liabilities relate to taxes levied by the same tax authority.
1.14
Employee benefits
The costs of short-term employee benefits are recognised as a liability and an expense, unless those costs are required to be recognised as part of the cost of stock or fixed assets.
The cost of any unused holiday entitlement is recognised in the period in which the employee’s services are received.
Termination benefits are recognised immediately as an expense when the company is demonstrably committed to terminate the employment of an employee or to provide termination benefits.
1.15
Retirement benefits
Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.
1.16
Leases
Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessees. All other leases are classified as operating leases.
Assets held under finance leases are recognised as assets at the lower of the assets fair value at the date of inception and the present value of the minimum lease payments. The related liability is included in the balance sheet as a finance lease obligation. Lease payments are treated as consisting of capital and interest elements. The interest is charged to profit or loss so as to produce a constant periodic rate of interest on the remaining balance of the liability.
Rentals payable under operating leases, including any lease incentives received, are charged to profit or loss on a straight line basis over the term of the relevant lease except where another more systematic basis is more representative of the time pattern in which economic benefits from the leases asset are consumed.
MARTECH (UK) LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 APRIL 2024
1
Accounting policies
(Continued)
- 17 -
Rental income from operating leases is recognised on a straight line basis over the term of the relevant lease. Initial direct costs incurred in negotiating and arranging an operating lease are added to the carrying amount of the leased asset and recognised on a straight line basis over the lease term.
1.17
Foreign exchange
Transactions in currencies other than pounds sterling are recorded at the rates of exchange prevailing at the dates of the transactions. At each reporting end date, monetary assets and liabilities that are denominated in foreign currencies are retranslated at the rates prevailing on the reporting end date. Gains and losses arising on translation in the period are included in profit or loss.
MARTECH (UK) LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 APRIL 2024
- 18 -
2
Judgements and key sources of estimation uncertainty
In the application of the company’s accounting policies, the directors are required to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised where the revision affects only that period, or in the period of the revision and future periods where the revision affects both current and future periods.
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.
Stock provision
The company converts raw materials to finished goods as part of its production operations. Stock values include any costs such as labour and overheads attributable to generating finished goods, as management believe this is the most suitable costing method to take into account the matching concept of accounting.
At each reporting date an assessment is made for provisions required to properly recognise wastage, damaged goods and over absorbed overheads. Any excess of the carrying amount of stocks over its estimated selling price less costs to complete and sell is recognised as an impairment loss in profit or loss and provided for in the balance sheet. Reversals of impairment losses are also recognised in profit or loss where these arise.
Investment property valuation
As required by FRS 102, properties which qualify as investment properties are revalued to fair value at each period end. The directors are of the opinion the initial cost of the property remains a fair valuation, which is comparable to a desktop valuation completed. The directors do not consider this to give risk to a material risk as at the year end.
MARTECH (UK) LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 APRIL 2024
- 19 -
3
Turnover and other revenue
An analysis of the company's turnover is as follows:
2024
2023
£
£
Turnover analysed by class of business
Distributing electrical lighting equipment
7,840,336
8,092,380
2024
2023
£
£
Turnover analysed by geographical market
UK
7,652,877
7,900,475
Europe
187,459
188,754
Rest of the world
-
3,151
7,840,336
8,092,380
2024
2023
£
£
Other revenue
Interest income
54
6
Rental income
143,333
135,000
4
Operating profit
2024
2023
Operating profit for the year is stated after charging/(crediting):
£
£
Exchange gains
(21,230)
(102)
Research and development costs
4,128
6,188
Fees payable to the company's auditor for the audit of the company's financial statements
15,100
14,120
Depreciation of owned tangible fixed assets
63,831
81,756
Depreciation of tangible fixed assets held under finance leases
63,382
13,950
Operating lease charges
18,000
18,000
5
Employees
The average monthly number of persons employed by the company during the year was:
2024
2023
Number
Number
Administration
33
35
Manufacturing
37
36
Directors
3
3
Total
73
74
MARTECH (UK) LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 APRIL 2024
5
Employees
(Continued)
- 20 -
Their aggregate remuneration comprised:
2024
2023
£
£
Wages and salaries
1,949,024
1,790,328
Social security costs
172,759
160,595
Pension costs
48,906
51,333
2,170,689
2,002,256
6
Interest payable and similar expenses
2024
2023
£
£
Interest on financial liabilities measured at amortised cost:
Interest on bank overdrafts and loans
113,616
77,408
Interest on invoice finance arrangements
81,733
69,860
195,349
147,268
Other finance costs:
Interest on finance leases and hire purchase contracts
12,018
3,317
Other interest
78,737
58,921
286,104
209,506
7
Fair value adjustments
2024
2023
£
£
Changes in the fair value of investment properties
100,000
200,000
See note 10 for more information.
MARTECH (UK) LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 APRIL 2024
- 21 -
8
Taxation
2024
2023
£
£
Deferred tax
Origination and reversal of timing differences
14,164
(4,771)
The actual charge/(credit) for the year can be reconciled to the expected charge for the year based on the profit or loss and the standard rate of tax as follows:
2024
2023
£
£
Profit before taxation
145,656
223,385
Expected tax charge based on the standard rate of corporation tax in the UK of 25.00% (2023: 19.00%)
36,414
42,443
Tax effect of expenses that are not deductible in determining taxable profit
2,564
1,671
Effect of revaluations of investments
(25,000)
(38,980)
Other adjustments
186
(9,905)
Taxation charge/(credit) for the year
14,164
(4,771)
The UK corporation tax rate was 25% throughout the year.
Deferred tax balances at the reporting date are therefore measured at 25% (2023 - 25%).
MARTECH (UK) LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 APRIL 2024
- 22 -
9
Tangible fixed assets
Freehold land and buildings
Plant and machinery
Motor vehicles
Total
£
£
£
£
Cost
At 1 May 2023
1,512,694
1,385,819
93,379
2,991,892
Additions
1,199
101,642
75,972
178,813
At 30 April 2024
1,513,893
1,487,461
169,351
3,170,705
Depreciation and impairment
At 1 May 2023
499,676
1,281,794
43,650
1,825,120
Depreciation charged in the year
27,918
67,870
31,425
127,213
At 30 April 2024
527,594
1,349,664
75,075
1,952,333
Carrying amount
At 30 April 2024
986,299
137,797
94,276
1,218,372
At 30 April 2023
1,013,018
104,025
49,729
1,166,772
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 machinery
75,189
42,273
Motor vehicles
79,047
29,425
154,236
71,698
Depreciation charged in the year in respect of leased assets amounted to £30,071 (2023 - £9,808).
10
Investment property
2024
£
Fair value
At 1 May 2023
3,733,006
Net gains or losses through fair value adjustments
100,000
At 30 April 2024
3,833,006
The fair value of the investment property has been arrived on the basis of a valuation carried out at the premises on 13 June 2024 by Michael Steel and Co Chartered Surveyors, who are not connected with the company. The valuation was made on an open market value basis by reference to market evidence of transaction prices for similar properties and other considerations regarding rental income opportunities and location data. The directors are satisfied that the current net book value is not materially different to the open market value of the properties.
MARTECH (UK) LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 APRIL 2024
10
Investment property
(Continued)
- 23 -
If investment properties were stated on an historical cost basis rather than a fair value basis, the amounts would have been included as follows:
2024
2023
£
£
Cost
4,649,613
4,649,613
11
Fixed asset investments
2024
2023
Notes
£
£
Investments in subsidiaries
12
1,000
1,000
12
Subsidiaries
These financial statements are separate company financial statements for Martech (UK) Ltd.
Details of the company's subsidiaries at 30 April 2024 are as follows:
Name of undertaking
Registered office
Nature of business
Class of
% Held
shares held
Direct
Rise Advanced Cable Systems Limited
England and Wales
Dormant
Ordinary
100.00
The registered office of Rise Advanced Cable Systems Limited is Conway House, Thornhill Road Business Park, Tenter Fields, Dewsbury, WF12 9QW.
13
Stocks
2024
2023
£
£
Finished goods and goods for resale
1,845,903
2,174,357
14
Debtors
2024
2023
Amounts falling due within one year:
£
£
Trade debtors
1,333,852
1,252,054
Other debtors
4,883
Prepayments and accrued income
246,855
293,392
1,585,590
1,545,446
MARTECH (UK) LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 APRIL 2024
14
Debtors
(Continued)
- 24 -
2024
2023
Amounts falling due after more than one year:
£
£
Deferred tax asset (note 19)
168,760
170,801
Total debtors
1,754,350
1,716,247
15
Creditors: amounts falling due within one year
2024
2023
Notes
£
£
Bank loans
17
10,127
135,826
Obligations under finance leases
18
37,358
33,946
Trade creditors
995,581
1,149,104
Taxation and social security
197,240
249,474
Other creditors
1,774,952
2,015,944
Accruals and deferred income
51,401
42,359
3,066,659
3,626,653
16
Creditors: amounts falling due after more than one year
2024
2023
Notes
£
£
Bank loans and overdrafts
17
1,709,986
1,559,006
Obligations under finance leases
18
169,290
79,155
1,879,276
1,638,161
17
Loans and overdrafts
2024
2023
£
£
Bank loans
1,720,113
1,694,832
Directors Loans
198,769
211,873
Asset financing
676,180
794,936
2,595,062
2,701,641
Payable within one year
885,076
1,142,635
Payable after one year
1,709,986
1,559,006
MARTECH (UK) LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 APRIL 2024
17
Loans and overdrafts
(Continued)
- 25 -
During the year,the company re-mortgaged property such that the original loan was fully repaid and a new loan with a new provider was taken out.
The bank loans of the company are secured on property and a fixed and floating charge over all current and future assets of the company.
Director loans are included within other creditors. No interest is charged on loans to the company by directors, with no fixed date for repayment or security provided.
Invoice financing is secured against trade debtors on which funds have been advanced.
Asset finance is secured against the asset with which the balance relates.
18
Finance lease obligations
2024
2023
Future minimum lease payments due under finance leases:
£
£
Within one year
54,401
43,407
In two to five years
191,665
93,878
246,066
137,285
Less: future finance charges
(39,418)
(24,184)
206,648
113,101
Finance lease payments represent rentals payable by the company for certain items of plant and machinery and motor vehicles. Leases include purchase options at the end of the lease period, and no restrictions are placed on the use of the assets. The average lease term is 4 years. All leases are on a fixed repayment basis and no arrangements have been entered into for contingent rental payments.
Finance lease obligations are secured against the assets to which they relate.
19
Deferred taxation
Deferred tax assets and liabilities are offset where the company has a legally enforceable right to do so. The following is the analysis of the deferred tax balances (after offset) for financial reporting purposes:
Liabilities
Liabilities
Assets
Assets
2024
2023
2024
2023
Balances:
£
£
£
£
Accelerated Capital Allowances
169,153
157,030
-
-
Tax losses
-
-
168,760
170,801
169,153
157,030
168,760
170,801
MARTECH (UK) LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 APRIL 2024
19
Deferred taxation
(Continued)
- 26 -
2024
Movements in the year:
£
Asset at 1 May 2023
(13,771)
Charge to profit or loss
14,164
Liability at 30 April 2024
393
20
Retirement benefit schemes
2024
2023
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
48,906
51,333
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.
21
Share capital
2024
2023
2024
2023
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary shares of £1 each
423,400
423,400
423,400
423,400
22
Operating lease commitments
Lessee
The company is party to operating leases for the use of some machinery.
At the reporting end date the company had outstanding commitments for future minimum lease payments under non-cancellable operating leases, which fall due as follows:
2024
2023
£
£
Within one year
13,195
6,696
Between two and five years
31,067
15,111
44,262
21,807
MARTECH (UK) LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 APRIL 2024
- 27 -
23
Related party transactions
Remuneration of key management personnel
The remuneration of key management personnel, excluding directors, is as follows.
2024
2023
£
£
Aggregate compensation
172,193
136,953
24
Directors' remuneration
2024
2023
£
£
Remuneration for qualifying services
168,520
195,203
Company pension contributions to defined contribution schemes
4,358
12,100
172,878
207,303
25
Directors' transactions
At the year end, an amount of £198,769 (2023 - £200,763) was included in creditors: amounts falling due within one year in relation to loans received from the directors of the company.
At the year end, an amount of £4,838 (2023 - £nil) was included in debtors in relation to loans made to the directors of the company.
26
Cash generated from operations
2024
2023
£
£
Profit for the year after tax
131,492
228,156
Adjustments for:
Taxation charged/(credited)
14,164
(4,771)
Finance costs
286,104
209,506
Investment income
(54)
(6)
Fair value gain on investment properties
(100,000)
(200,000)
Depreciation and impairment of tangible fixed assets
127,213
95,706
Movements in working capital:
Decrease in stocks
328,454
7,544
(Increase)/decrease in debtors
(40,144)
404,139
Decrease in creditors
(437,707)
(393,624)
Cash generated from operations
309,522
346,650
MARTECH (UK) LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 APRIL 2024
- 28 -
27
Analysis of changes in net debt
1 May 2023
Cash flows
New finance leases
30 April 2024
£
£
£
£
Cash at bank and in hand
51,111
(36,513)
-
14,598
Borrowings excluding overdrafts
(1,694,832)
(25,281)
-
(1,720,113)
Obligations under finance leases
(113,101)
52,374
(145,921)
(206,648)
(1,756,822)
(9,420)
(145,921)
(1,912,163)
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