Company registration number 02179444 (England and Wales)
ADPAK MACHINERY SYSTEMS LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2024
ADPAK MACHINERY SYSTEMS LIMITED
COMPANY INFORMATION
Directors
J Farrow
M Aspinall
A Farrow
A Jenkins
M Sumner
C Turner
Company number
02179444
Registered office
3 Pendleside
Lomeshaye Industrial Estate
Nelson
Lancashire
United Kingdom
BB9 6RY
Auditor
Azets Audit Services
Crown House
Bridgewater Close
Burnley
Lancashire
United Kingdom
BB11 5TE
ADPAK MACHINERY SYSTEMS LIMITED
CONTENTS
Page
Strategic report
1
Directors' report
2 - 3
Independent auditor's report
4 - 6
Profit and loss account
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 - 23
ADPAK MACHINERY SYSTEMS LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 31 MARCH 2024
- 1 -

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

Fair review of the business

The turnover of the company has increased from £10,744,505 to £11,800,897 in the year, resulting in a profit after tax of £525,883. The increase in turnover was expected due to the completion of a major contract in the year.

 

At the year end, the company had shareholders' funds of £4,639,713 including distributable reserves of £3,534,314.

 

This year has seen our focus move towards our ESG responsibilities and road to sustainability by making the decision to invest in technology which will help us to reduce our carbon impact. The long-term goal being the attainment of a net zero operation, albeit one which will be made in many small steps.

 

An investment plan has been made which will enable on-site generation of carbon neutral electricity, via solar P.V. and a new, modern, low-energy, materials storage facility. This will potentially reduce our Scope 1 carbon emissions in the very near future.

 

The forthcoming year is expected to yield an improvement in turnover and reduction in energy costs.

Principal Risks and Uncertainties

The directors perceive the key risks facing the company to be an inflationary increase in machinery/parts and a

generally increasing cost base. To mitigate these risks, the directors continue to monitor costs and seek to obtain the best prices on stock items.

On behalf of the board

J Farrow
Director
12 February 2025
ADPAK MACHINERY SYSTEMS LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 MARCH 2024
- 2 -

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 the assembly and distribution of packaging machinery and film.

Results and dividends

The results for the year are set out on page 7.

Ordinary dividends were paid amounting to £550,000. The directors do not recommend payment of a further dividend.

Directors

The directors who held office during the year and up to the date of signature of the financial statements were as follows:

J Farrow
M Aspinall
A Farrow
A Jenkins
M Sumner
C Turner
Financial instruments
Objectives and policies

The company finances its operations through a mixture of retained profits and, where necessary to fund expansion or capital expenditure programmes, through bank financing.

 

The managements objectives are to:

Auditor

The auditor, Azets Audit Services, is deemed to be reappointed under section 487(2) of the Companies Act 2006.

ADPAK MACHINERY SYSTEMS LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
- 3 -
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.

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
J Farrow
Director
12 February 2025
ADPAK MACHINERY SYSTEMS LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF ADPAK MACHINERY SYSTEMS LIMITED
- 4 -
Opinion

We have audited the financial statements of Adpak Machinery Systems Limited (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 the financial statements:

Basis for opinion

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.

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.

 

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:

ADPAK MACHINERY SYSTEMS LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF ADPAK MACHINERY SYSTEMS LIMITED
- 5 -
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:

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.

ADPAK MACHINERY SYSTEMS LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF ADPAK MACHINERY SYSTEMS LIMITED
- 6 -

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:

 

 

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.

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.

Jonathan Ward
Senior Statutory Auditor
For and on behalf of Azets Audit Services
19 February 2025
Chartered Accountants
Statutory Auditor
Crown House
Bridgewater Close
Burnley
Lancashire
United Kingdom
BB11 5TE
ADPAK MACHINERY SYSTEMS LIMITED
PROFIT AND LOSS ACCOUNT
FOR THE YEAR ENDED 31 MARCH 2024
- 7 -
2024
2023
Notes
£
£
Turnover
3
11,800,897
10,744,505
Cost of sales
(7,975,831)
(6,674,053)
Gross profit
3,825,066
4,070,452
Distribution costs
(293,281)
(346,708)
Administrative expenses
(2,848,265)
(2,769,177)
Operating profit
4
683,520
954,567
Interest receivable and similar income
7
33,360
12,987
Interest payable and similar expenses
8
(23,897)
(23,688)
Profit before taxation
692,983
943,866
Tax on profit
9
(167,100)
(190,000)
Profit for the financial year
525,883
753,866

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

ADPAK MACHINERY SYSTEMS LIMITED
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 MARCH 2024
- 8 -
2024
2023
£
£
Profit for the year
525,883
753,866
Other comprehensive income
-
-
Total comprehensive income for the year
525,883
753,866
ADPAK MACHINERY SYSTEMS LIMITED
BALANCE SHEET
AS AT
31 MARCH 2024
31 March 2024
- 9 -
2024
2023
Notes
£
£
£
£
Fixed assets
Tangible assets
11
2,392,364
2,207,091
Current assets
Stocks
12
1,624,335
1,547,265
Debtors
13
2,031,185
2,528,664
Cash at bank and in hand
2,297,810
2,629,042
5,953,330
6,704,971
Creditors: amounts falling due within one year
14
(3,353,566)
(3,865,766)
Net current assets
2,599,764
2,839,205
Total assets less current liabilities
4,992,128
5,046,296
Creditors: amounts falling due after more than one year
15
(76,172)
(106,223)
Provisions for liabilities
Deferred tax liability
17
276,243
276,243
(276,243)
(276,243)
Net assets
4,639,713
4,663,830
Capital and reserves
Called up share capital
19
50
50
Revaluation reserve
1,105,299
1,105,299
Capital redemption reserve
50
50
Profit and loss reserves
3,534,314
3,558,431
Total equity
4,639,713
4,663,830
The financial statements were approved by the board of directors and authorised for issue on 12 February 2025 and are signed on its behalf by:
J Farrow
Director
Company Registration No. 02179444
ADPAK MACHINERY SYSTEMS LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 MARCH 2024
- 10 -
Share capital
Revaluation reserve
Capital redemption reserve
Profit and loss reserves
Total
Notes
£
£
£
£
£
Balance at 1 April 2022
50
1,105,299
50
3,529,565
4,634,964
Year ended 31 March 2023:
Profit and total comprehensive income for the year
-
-
-
753,866
753,866
Dividends
10
-
-
-
(725,000)
(725,000)
Balance at 31 March 2023
50
1,105,299
50
3,558,431
4,663,830
Year ended 31 March 2024:
Profit and total comprehensive income for the year
-
-
-
525,883
525,883
Dividends
10
-
-
-
(550,000)
(550,000)
Balance at 31 March 2024
50
1,105,299
50
3,534,314
4,639,713
ADPAK MACHINERY SYSTEMS LIMITED
STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 MARCH 2024
- 11 -
2024
2023
Notes
£
£
£
£
Cash flows from operating activities
Cash generated from operations
22
1,010,212
695,533
Interest paid
(23,897)
(23,688)
Income taxes paid
(192,475)
(315,880)
Net cash inflow from operating activities
793,840
355,965
Investing activities
Purchase of tangible fixed assets
(389,340)
(35,891)
Proceeds from disposal of tangible fixed assets
60,100
24,509
Interest received
33,360
12,987
Net cash (used in)/generated from investing activities
(295,880)
1,605
Financing activities
Repayment of bank loans
(219,988)
(2,909)
Payment of finance leases obligations
(59,204)
(133,550)
Dividends paid
(550,000)
(725,000)
Net cash used in financing activities
(829,192)
(861,459)
Net decrease in cash and cash equivalents
(331,232)
(503,889)
Cash and cash equivalents at beginning of year
2,629,042
3,132,931
Cash and cash equivalents at end of year
2,297,810
2,629,042
ADPAK MACHINERY SYSTEMS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2024
- 12 -
1
Accounting policies
Company information

Adpak Machinery Systems Limited is a private company limited by shares incorporated in England and Wales. The registered office is 3 Pendleside, Lomeshaye Industrial Estate, Nelson, Lancashire, United Kingdom, BB9 6RY.

1.1
Accounting convention

These financial statements have been prepared in accordance with FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” (“FRS 102”) and the requirements of the Companies Act 2006.

The financial statements are prepared in sterling, which is the functional currency of the company. Monetary amounts in these financial statements are rounded to the nearest £.

The financial statements have been prepared under the historical cost convention, modified to include the revaluation of freehold properties at fair value. The principal accounting policies adopted are set out below.

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 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.

Revenue 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 revenue 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.

Revenue from service contracts are recognised over the period of the contract on a straight line basis.

1.4
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
Nil
Plant and equipment
25% per annum on reducing balance
Motor vehicles
33% per annum on reducing balance

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.

 

Freehold property is carried at fair value at the date of the revaluation plus additions at cost, less any subsequent accumulated depreciation and subsequent accumulated impairment losses. Revaluations are undertaken with sufficient regularity to ensure the carrying amount does not differ materially from that which would be determined using fair value at the balance sheet date. The surplus or deficit on book value is transferred to the revaluation reserve.

 

ADPAK MACHINERY SYSTEMS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
1
Accounting policies
(Continued)
- 13 -
1.5
Impairment of fixed assets

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 (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (or cash-generating unit) 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 (or cash-generating unit) 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 (or cash-generating unit) 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.

1.6
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.

1.7
Cash and cash equivalents

Cash at bank and in hand are basic financial assets and include cash in hand and deposits held at call with banks.

1.8
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 measured at transaction price including transaction costs.

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.

ADPAK MACHINERY SYSTEMS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
1
Accounting policies
(Continued)
- 14 -
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.

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 recognised at transaction price. Financial liabilities classified as payable within one year are not amortised.

 

Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Amounts payable are classified as current liabilities if payment is due within one year or less. If not, they are presented as non-current liabilities. 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.

ADPAK MACHINERY SYSTEMS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
1
Accounting policies
(Continued)
- 15 -
1.9
Equity instruments

Equity instruments issued by the company are recorded at the proceeds received, net of transaction costs. Dividends payable on equity instruments are recognised as liabilities once they are no longer at the discretion of the company.

1.10
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.

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.

 

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.

1.11
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.

1.12
Retirement benefits

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

1.13
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.

ADPAK MACHINERY SYSTEMS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
1
Accounting policies
(Continued)
- 16 -
1.14
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.

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.

 

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

The company recognises depreciation on the tangible fixed assets on a reducing balance basis over their useful lives. The annual depreciation charge on tangible fixed assets is material to the results of Adpak Machinery Systems Limited.

 

Stock provision

Stock provisions are based on the directors estimation of any parts of stock that will be scrapped, and any provisions believed to be necessary to reduce machine stock used as demonstration to net realisable value. The directors considered these provisions to be a fair estimation of the impairment of stock based on historical results and anticipated future stock requirements.

 

Following an exercise to scrap obsolete stock during the year, the directors consider no provision is required at the balance sheet date.

 

3
Turnover and other revenue
2024
2023
£
£
Turnover analysed by class of business
Distribution and assembly operations
11,800,897
10,744,505
2024
2023
£
£
Other revenue
Interest income
33,360
12,987
ADPAK MACHINERY SYSTEMS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
- 17 -
4
Operating profit
2024
2023
Operating profit for the year is stated after charging/(crediting):
£
£
Exchange losses
8,857
19,176
Fees payable to the company's auditor for the audit of the company's financial statements
18,900
19,000
Depreciation of owned tangible fixed assets
35,826
57,384
Depreciation of tangible fixed assets held under finance leases
134,887
159,253
Profit on disposal of tangible fixed assets
(26,746)
(4,931)
Operating lease charges
18,138
18,227
5
Employees

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

2024
2023
Number
Number
Distribution and admin
29
34

Their aggregate remuneration comprised:

2024
2023
£
£
Wages and salaries
1,642,111
1,591,543
Social security costs
190,655
203,367
Pension costs
41,913
28,513
1,874,679
1,823,423
6
Directors' remuneration
2024
2023
£
£
Remuneration for qualifying services
634,026
632,116
Company pension contributions to defined contribution schemes
6,605
6,603
640,631
638,719

The number of directors for whom retirement benefits are accruing under defined contribution schemes amounted to 5 (2023 - 5).

ADPAK MACHINERY SYSTEMS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
6
Directors' remuneration
(Continued)
- 18 -
Remuneration disclosed above include the following amounts paid to the highest paid director:
2024
2023
£
£
Remuneration for qualifying services
268,841
239,814
7
Interest receivable and similar income
2024
2023
£
£
Interest income
Interest on bank deposits
33,360
12,987
2024
2023
Investment income includes the following:
£
£
Interest on financial assets not measured at fair value through profit or loss
33,360
12,987
8
Interest payable and similar expenses
2024
2023
£
£
Interest on financial liabilities measured at amortised cost:
Interest on bank overdrafts and loans
8,179
9,611
Other finance costs:
Interest on finance leases and hire purchase contracts
15,718
14,077
23,897
23,688
9
Taxation
2024
2023
£
£
Current tax
UK corporation tax on profits for the current period
167,100
190,000
ADPAK MACHINERY SYSTEMS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
9
Taxation
(Continued)
- 19 -

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

2024
2023
£
£
Profit before taxation
692,983
943,866
Expected tax charge based on the standard rate of corporation tax in the UK of 25.00% (2023: 19.00%)
173,246
179,335
Tax effect of expenses that are not deductible in determining taxable profit
612
-
0
Depreciation in excess of capital allowances
(6,715)
6,972
Sundry tax differences
(43)
3,693
Taxation charge for the year
167,100
190,000
10
Dividends
2024
2023
£
£
Final paid
550,000
725,000
11
Tangible fixed assets
Freehold land and buildings
Plant and equipment
Motor vehicles
Total
£
£
£
£
Cost or valuation
At 1 April 2023
1,752,460
760,145
685,255
3,197,860
Additions
177,856
62,229
149,255
389,340
Disposals
-
0
-
0
(123,319)
(123,319)
At 31 March 2024
1,930,316
822,374
711,191
3,463,881
Depreciation and impairment
At 1 April 2023
-
0
674,033
316,736
990,769
Depreciation charged in the year
-
0
35,826
134,887
170,713
Eliminated in respect of disposals
-
0
-
0
(89,965)
(89,965)
At 31 March 2024
-
0
709,859
361,658
1,071,517
Carrying amount
At 31 March 2024
1,930,316
112,515
349,533
2,392,364
At 31 March 2023
1,752,460
86,112
368,519
2,207,091
ADPAK MACHINERY SYSTEMS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
11
Tangible fixed assets
(Continued)
- 20 -

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
£
£
Motor vehicles
324,314
363,801

The company's property was revalued in 2022 at a value of £1,750,000 by Eckersley, independent valuers not connected with the company, on the basis of market value. In the opinion of the directors there has been no change in the valuation of the property during the year.

Freehold land and buildings are carried at valuation. If freehold land and buildings were measured using the cost model, the carrying amounts would have been approximately £594,131 (2023 - £428,635), being cost £685,466 (2023 - £507,610) and depreciation £91,335 (2023 - £78,975).

12
Stocks
2024
2023
£
£
Raw materials and consumables
1,624,335
1,547,265
ADPAK MACHINERY SYSTEMS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
- 21 -
13
Debtors
2024
2023
Amounts falling due within one year:
£
£
Trade debtors
1,641,768
1,340,540
Deposits paid to suppliers
301,734
1,094,209
Other debtors
20,662
9,472
Prepayments and accrued income
67,021
84,443
2,031,185
2,528,664
14
Creditors: amounts falling due within one year
2024
2023
Notes
£
£
Bank loans
-
0
219,988
Obligations under finance lease and hire purchase contracts
16
121,503
150,656
Deposits received in advance
1,082,268
1,585,480
Trade creditors
1,142,329
1,057,762
Corporation tax
164,745
190,120
Other taxation and social security
383,169
336,855
Other creditors
78,284
98,743
Accruals and deferred income
381,268
226,162
3,353,566
3,865,766

Obligations under finance lease and hire purchase contracts are secured by fixed charges on the assets concerned.

15
Creditors: amounts falling due after more than one year
2024
2023
£
£
Obligations under finance leases
16
76,172
106,223

The company's bank loan is secured by a legal mortgage on the company's freehold property and a fixed and floating charge on the assets of the company.

 

The bank loan was repayable over a term of twenty years commencing in 2018 bearing interest at 2.25% above bank base rate, however it has been repaid in full, after the year end, in August 2023.

 

Obligations under finance lease and hire purchase contracts are secured by fixed charges on the assets concerned.

ADPAK MACHINERY SYSTEMS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
- 22 -
16
Finance lease obligations
2024
2023
Future minimum lease payments due under finance leases:
£
£
Within one year
134,236
163,807
In two to five years
85,184
116,368
219,420
280,175
Less: future finance charges
(21,745)
(23,296)
197,675
256,879

Finance lease payments represent rentals payable by the company for certain motor vehicles. Leases include purchase options at the end of the lease period, and no restrictions are placed on the use of the assets. All leases are on a fixed repayment basis and no arrangements have been entered into for contingent rental payments.

17
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
54,963
54,963
Revaluations
221,280
221,280
276,243
276,243
There were no deferred tax movements in the year.
18
Retirement benefit schemes
2024
2023
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
41,913
28,513

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.

19
Share capital
2024
2023
2024
2023
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary shares of £1 each
50
50
50
50
ADPAK MACHINERY SYSTEMS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2024
- 23 -
20
Financial instruments

Derivatives

At 31 March 2024, the company had entered into forward currency contracts. As at this date, the company had a commitment to purchase Euros to a total value of €1,100,000 at a pre-agreed exchange rate.

 

21
Ultimate controlling party

The ulimate controlling party is J Farrow by virtue of his majority interest in the issued share capital of the company.

22
Cash generated from operations
2024
2023
£
£
Profit for the year after tax
525,883
753,866
Adjustments for:
Taxation charged
167,100
190,000
Finance costs
23,897
23,688
Investment income
(33,360)
(12,987)
Gain on disposal of tangible fixed assets
(26,746)
(4,931)
Depreciation and impairment of tangible fixed assets
170,713
216,637
Movements in working capital:
Increase in stocks
(77,070)
(432,592)
Decrease in debtors
497,479
32,570
Decrease in creditors
(237,684)
(70,718)
Cash generated from operations
1,010,212
695,533
23
Analysis of changes in net funds
1 April 2023
Cash flows
31 March 2024
£
£
£
Cash at bank and in hand
2,629,042
(331,232)
2,297,810
Borrowings excluding overdrafts
(219,988)
219,988
-
Obligations under finance leases
(256,879)
59,204
(197,675)
2,152,175
(52,040)
2,100,135
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