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Registered number: 00563245









MATERIAL APPLICATIONS LIMITED









ANNUAL REPORT AND FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 MAY 2024

 
MATERIAL APPLICATIONS LIMITED
 
 
COMPANY INFORMATION


Directors
P J Kitching 
G W Kitching 
A P Williamson 




Registered number
00563245



Registered office
Wharton Steelworks
Deakins Road

Winsford

Cheshire

CW7 3BW




Trading Address
Wharton Steelworks
Deakins Road

Winsford

Cheshire

CW7 3BW






Independent auditors
WR Partners
Chartered Accountants & Statutory Auditors

Drake House

Gadbrook Park

Northwich

Cheshire

CW9 7RA





 
MATERIAL APPLICATIONS LIMITED
 

CONTENTS



Page
Strategic report
1
Directors' report
2 - 3
Independent auditors' report
4 - 7
Statement of comprehensive income
8
Balance sheet
9
Statement of changes in equity
10 - 11
Statement of cash flows
12
Analysis of net debt
13
Notes to the financial statements
14 - 30


 
MATERIAL APPLICATIONS LIMITED
 
 
STRATEGIC REPORT
FOR THE YEAR ENDED 31 MAY 2024

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

Business review
 
The directors are pleased to report the company continues to generate significant profits despite the market remaining highly competitive with interest rates easing slower than had been hoped.
The company continues to operate within its specialist market with  95% of business from repeat clients.   With the continued investment in production automation / processes, the company  is well positioned to take advantage of new developing markets within the UK. 
Future Developments:
The directors will continue to engage with clients, suppliers and employee’s in order to strive for continuous improvements with an aim of increasing the company's ability to work with select clients on a repeat basis.

Principal risks and uncertainties
 
The management of risk is integral to the ongoing success of the company and the directors will continue to review and update its risk assessments and procedures across the operating areas of the company. 

Financial key performance indicators
 
The trading results for the year are shown within the table below.  The Company's key financial performance indicators are summarised below:
ole2c2e.png  

 

This report was approved by the board on 25 February 2025 and signed on its behalf.





G W Kitching
Director

Page 1

 
MATERIAL APPLICATIONS LIMITED
 
 
 
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 MAY 2024

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

Directors' responsibilities statement

The directors are responsible for preparing the Strategic report, the Directors' 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 applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice), including Financial Reporting Standard 102 ‘The Financial Reporting Standard applicable in the UK and Republic of Ireland'. 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 for the Company's financial statements and then apply them consistently;

make judgements and accounting estimates that are reasonable and prudent;

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 to enable them to ensure that the financial statements comply with the Companies Act 2006They 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.

Principal activity

The Main activity of the Company during the year continued as a Structural Steelwork Contractor specialising within the Industrial & Logistical Sector throughout the UK.

Results and dividends

The profit for the year, after taxation, amounted to £272,349 (2023 - £769,699).

Ordinary dividends were paid amounting of £60,000. The directors do not recommend the payment of a final dividend.

Directors

The directors who served during the year were:

P J Kitching 
G W Kitching 
A P Williamson 

Page 2

 
MATERIAL APPLICATIONS LIMITED
 
 
 
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2024

Disclosure of information to auditors

Each of the persons who are directors at the time when this Directors' report is approved has confirmed that:
 
so far as the director is aware, there is no relevant audit information of which the Company's auditors are unaware, and

the director has taken all the steps that ought to have been taken as a director in order to be aware of any relevant audit information and to establish that the Company's auditors are aware of that information.

Medium-sized companies exemption

There have been no significant events affecting the Company since the year end.

Auditors

The auditorsWR Partnerswill be proposed for reappointment in accordance with section 485 of the Companies Act 2006.

This report was approved by the board on 25 February 2025 and signed on its behalf.
 





G W Kitching
Director

Page 3

 
MATERIAL APPLICATIONS LIMITED
 
 
 
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF MATERIAL APPLICATIONS LIMITED
 

Opinion


We have audited the financial statements of Material Applications Limited (the 'Company') for the year ended 31 May 2024, which comprise the Statement of comprehensive income, the Balance sheet, the Statement of cash flows, the Statement of changes in equity and the related notes, including a summary of significant accounting policiesThe 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 31 May 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.


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 Auditors' responsibilities for the audit of the financial statements section of our report. We are independent of the Company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the United Kingdom, including the Financial Reporting Council's Ethical Standard and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.


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.


Page 4

 
MATERIAL APPLICATIONS LIMITED
 
 
 
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF MATERIAL APPLICATIONS LIMITED (CONTINUED)


Other information


The other information comprises the information included in the Annual Report other than the financial statements and our Auditors' report thereon. The directors are responsible for the other information contained within the Annual ReportOur 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.


Opinion on other matters prescribed by the Companies Act 2006
 

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


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 directors' 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 set out on page 2, 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.


Page 5

 
MATERIAL APPLICATIONS LIMITED
 
 
 
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF MATERIAL APPLICATIONS LIMITED (CONTINUED)


Auditors' 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 Auditors' report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.


Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below:

The audit team obtained an understanding of the legal and regulatory frameworks that are applicable to the Company and determined that the most significant are those that relate to the reporting framework (FRS102 and the Companies Act 2006), the relevant tax compliance regulations, employment law, Health and Safety Regulations and the EU General Data Protection Regulation (GDPR).
We understood how the Company is complying with these frameworks by making enquiries of management and those responsible for legal and compliance procedures.
We assessed the susceptibility of the Company's financial statements to material misstatement, including how fraud might occur by meeting with key management to understand where they considered there was susceptibility to fraud. Based on our understanding our procedures involved enquiries of management and those charged with governance, manual journal entry testing, cashbook reviews for large and unusual items and the challenge of significant accounting estimates used in preparing the financial statements.


Because of the inherent limitations of an audit, there is a risk that we will not detect all irregularities, including those leading to a material misstatement in the financial statements or non-compliance with regulation. This risk increases the more that compliance with a law or regulation is removed from the events and transactions reflected in the financial statements, as we will be less likely to become aware of instances of non-compliance. The risk is also greater regarding irregularities occurring due to fraud rather than error, as fraud involves intentional concealment, forgery, collusion, omission or misrepresentation.


A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council's website at: www.frc.org.uk/auditorsresponsibilities. This description forms part of our Auditors' report.


Use of our report
 

This report is made solely to the Company's members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006Our 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 Auditors' 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.


Page 6

 
MATERIAL APPLICATIONS LIMITED
 
 
 
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF MATERIAL APPLICATIONS LIMITED (CONTINUED)





Fran Johnson BSc BFP FCA (Senior statutory auditor)
  
for and on behalf of
WR Partners
 
Chartered Accountants
Statutory Auditors
  
Drake House
Gadbrook Park
Northwich
Cheshire
CW9 7RA

27 February 2025
Page 7

 
MATERIAL APPLICATIONS LIMITED
 
 
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 MAY 2024

2024
2023
Note
£
£

  

Turnover
 4 
9,738,919
11,971,383

Cost of sales
  
(7,826,547)
(9,254,033)

Gross profit
  
1,912,372
2,717,350

Administrative expenses
  
(1,604,873)
(1,630,174)

Other operating charges
  
(76,245)
(109,795)

Operating profit
 5 
231,254
977,381

Interest receivable and similar income
 8 
92
18

Interest payable and similar expenses
 9 
81,646
(62,665)

Profit before tax
  
312,992
914,734

Tax on profit
 10 
(40,643)
(145,035)

Profit for the financial year
  
272,349
769,699

Other comprehensive income for the year
  

Other comprehensive income
  
(74,794)
-

Other comprehensive income for the year
  
(74,794)
-

Total comprehensive income for the year
  
197,555
769,699

There were no recognised gains and losses for 2024 or 2023 other than those included in the statement of comprehensive income.

The notes on pages 14 to 30 form part of these financial statements.

Page 8

 
MATERIAL APPLICATIONS LIMITED
REGISTERED NUMBER: 00563245

BALANCE SHEET
AS AT 31 MAY 2024

As restated
2024
2023
Note
£
£

Fixed assets
  

Tangible assets
 13 
4,104,364
4,111,405

  
4,104,364
4,111,405

Current assets
  

Stocks
 14 
409,340
284,489

Debtors: amounts falling due within one year
 15 
1,705,500
1,410,163

Cash at bank and in hand
 16 
1,545,384
1,822,128

  
3,660,224
3,516,780

Creditors: amounts falling due within one year
 17 
(2,256,674)
(1,967,058)

Net current assets
  
 
 
1,403,550
 
 
1,549,722

Total assets less current liabilities
  
5,507,914
5,661,127

Creditors: amounts falling due after more than one year
 18 
(946,801)
(1,216,162)

Provisions for liabilities
  

Deferred tax
 21 
(880,601)
(902,008)

  
 
 
(880,601)
 
 
(902,008)

Net assets
  
3,680,512
3,542,957


Capital and reserves
  

Called up share capital 
 22 
80
80

Revaluation reserve
 23 
1,876,417
1,951,211

Profit and loss account
 23 
1,804,015
1,591,666

  
3,680,512
3,542,957


The financial statements were approved and authorised for issue by the board and were signed on its behalf on 25 February 2025.




G W Kitching
Director

The notes on pages 14 to 30 form part of these financial statements.

Page 9

 
MATERIAL APPLICATIONS LIMITED
 

STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 MAY 2024


Called up share capital
Revaluation reserve
Profit and loss account
Total equity

£
£
£
£

At 1 June 2023 (as previously stated)
80
1,951,211
1,972,437
3,923,728

Prior year adjustment
-
-
(380,771)
(380,771)

At 1 June 2023 (as restated)
80
1,951,211
1,591,666
3,542,957


Comprehensive income for the year

Profit for the year

-
-
272,349
272,349

Depreciation of revalued assets
-
(74,794)
-
(74,794)


Other comprehensive income for the year
-
(74,794)
-
(74,794)


Total comprehensive income for the year
-
(74,794)
272,349
197,555


Contributions by and distributions to owners

Dividends: Equity capital
-
-
(60,000)
(60,000)


Total transactions with owners
-
-
(60,000)
(60,000)


At 31 May 2024
80
1,876,417
1,804,015
3,680,512


The notes on pages 14 to 30 form part of these financial statements.

Page 10

 
MATERIAL APPLICATIONS LIMITED
 

STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 MAY 2023


Called up share capital
Revaluation reserve
Profit and loss account
Total equity

£
£
£
£

At 1 June 2022
80
1,951,211
1,008,899
2,960,190


Comprehensive income for the year

Profit for the year

-
-
769,699
769,699


Other comprehensive income for the year
-
-
-
-


Total comprehensive income for the year
-
-
769,699
769,699


Contributions by and distributions to owners

Dividends: Equity capital
-
-
(186,932)
(186,932)


Total transactions with owners
-
-
(186,932)
(186,932)


At 31 May 2023
80
1,951,211
1,591,666
3,542,957


The notes on pages 14 to 30 form part of these financial statements.

Page 11

 
MATERIAL APPLICATIONS LIMITED
 

STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 MAY 2024

As restated
2024
2023
£
£

Cash flows from operating activities

Profit for the financial year
272,349
769,699

Adjustments for:

Depreciation of tangible assets
219,395
244,509

Interest paid
(81,646)
62,665

Interest received
(92)
(18)

Taxation charge
40,643
145,035

(Increase)/decrease in stocks
(124,851)
60,541

(Increase)/decrease in debtors
(383,336)
2,301,457

Increase/(decrease) in creditors
317,785
(1,485,418)

Corporation tax received/(paid)
-
(57,961)

Net cash generated from operating activities

260,247
2,040,509


Cash flows from investing activities

Purchase of tangible fixed assets
(287,148)
(1,037,698)

Interest received
92
18

HP interest paid
(25,884)
(15,792)

Net cash from investing activities

(312,940)
(1,053,472)

Cash flows from financing activities

Repayment of loans
(68,931)
(37,918)

Repayment of/new finance leases
(202,650)
818,162

Dividends paid
(60,000)
(186,932)

Interest paid
107,530
(46,873)

Net cash used in financing activities
(224,051)
546,439

Net (decrease)/increase in cash and cash equivalents
(276,744)
1,533,476

Cash and cash equivalents at beginning of year
1,822,128
288,652

Cash and cash equivalents at the end of year
1,545,384
1,822,128


Cash and cash equivalents at the end of year comprise:

Cash at bank and in hand
1,545,384
1,822,128

1,545,384
1,822,128


Page 12

 
MATERIAL APPLICATIONS LIMITED
 

ANALYSIS OF NET DEBT
FOR THE YEAR ENDED 31 MAY 2024





At 1 June 2023
Cash flows
Other non-cash changes
At 31 May 2024
£

£

£

£

Cash at bank and in hand

1,822,128

(276,744)

-

1,545,384

Debt due after 1 year

(563,924)

24,457

39,973

(499,494)

Debt due within 1 year

(39,452)

39,452

(39,973)

(39,973)

Finance leases

(854,988)

202,650

-

(652,338)


363,764
(10,185)
-
353,579

The notes on pages 14 to 30 form part of these financial statements.

Page 13

 
MATERIAL APPLICATIONS LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MAY 2024

1.


Company information

Material Applications Limited is a private company limited by shares incorporated in England and Wales.The registered office is Wharton Steelworks, Deakins Road, Winsford, Cheshire, CW7 3BW.

2.Accounting policies

 
2.1

Accounting convention

The financial statements have been prepared under the historical cost convention unless otherwise specified within these accounting policies and in accordance with Financial Reporting Standard 102, the Financial Reporting Standard applicable in the UK and the Republic of Ireland and the Companies Act 2006.

The preparation of financial statements in compliance with FRS 102 requires the use of certain critical accounting estimates. It also requires management to exercise judgement in applying the Company's accounting policies (see note 3).

The presentational and functional currency of these financial statements is GBP. Values are rounded to the nearest pound.

The following principal accounting policies have been applied:

 
2.2

Going concern

At 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.

 
2.3

Turnover

Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Company and the revenue can be reliably measured. Revenue is measured as the fair value of the consideration received or receivable, excluding discounts, rebates, value added tax and other sales taxes. The following criteria must also be met before revenue is recognised:
Revenue from contracts is recognised by reference to the stage of completion when the stage of completion, costs incurred and costs to complete can be estimated reliably. The stage of completion is calculated by comparing costs incurred, mainly in relation to contractual hourly staff rates and materials, as a proportion of total costs. Where the outcome cannot be estimated reliably, revenue is recognised only to the extent of the expenses recognised that it is probable will be recovered.

 
2.4

Operating leases: the Company as lessee

Rentals paid under operating leases are charged to profit or loss on a straight-line basis over the lease term.

Benefits received and receivable as an incentive to sign an operating lease are recognised on a straight-line basis over the lease term, unless another systematic basis is representative of the time pattern of the lessee's benefit from the use of the leased asset.

Page 14

 
MATERIAL APPLICATIONS LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MAY 2024

2.Accounting policies (continued)

 
2.5

Taxation

The tax expense for the year comprises current and deferred tax. Tax is recognised in profit or loss except that a charge attributable to an item of income and expense recognised as other comprehensive income or to an item recognised directly in equity is also recognised in other comprehensive income or directly in equity respectively.

The current income tax charge is calculated on the basis of tax rates and laws that have been enacted or substantively enacted by the balance sheet date in the countries where the Company operates and generates income.

Deferred tax balances are recognised in respect of all timing differences that have originated but not reversed by the balance sheet date, except that:
The recognition of deferred tax assets is limited to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits; and
Any deferred tax balances are reversed if and when all conditions for retaining associated tax allowances have been met.

Deferred tax balances are not recognised in respect of permanent differences except in respect of business combinations, when deferred tax is recognised on the differences between the fair values of assets acquired and the future tax deductions available for them and the differences between the fair values of liabilities acquired and the amount that will be assessed for tax. Deferred tax is determined using tax rates and laws that have been enacted or substantively enacted by the balance sheet date.


 
2.6

Intangible fixed assets - goodwill

Intangible assets are initially recognised at cost. After recognition, under the cost model, intangible assets are measured at cost less any accumulated amortisation and any accumulated impairment losses.

All intangible assets are considered to have a finite useful life. If a reliable estimate of the useful life cannot be made, the useful life shall not exceed ten years.

 
2.7

Tangible fixed assets

Tangible fixed assets under the cost model are stated at historical cost less accumulated depreciation and any accumulated impairment losses. Historical cost includes expenditure that is directly attributable to bringing the asset to the location and condition necessary for it to be capable of operating in the manner intended by management.

At each reporting date the Company assesses whether there is any indication of impairment. If such indication exists, the recoverable amount of the asset is determined which is the higher of its fair value less costs to sell and its value in use. An impairment loss is recognised where the carrying amount exceeds the recoverable amount.

Page 15

 
MATERIAL APPLICATIONS LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MAY 2024

2.Accounting policies (continued)


2.7
Tangible fixed assets (continued)

Depreciation is charged so as to allocate the cost of assets less their residual value over their estimated useful lives, as detailed below..

Depreciation is provided on the following basis:

Freehold land and buildings
-
2%
on cost or valuation
Plant and equipment
-
20%
on reducing balance
Motor vehicles
-
25%
on cost
Fixtures and fittings
-
10%
on cost
Computers
-
25%
on cost

The assets' residual values, useful lives and depreciation methods are reviewed, and adjusted prospectively if appropriate, or if there is an indication of a significant change since the last reporting date.

Gains and losses on disposals are determined by comparing the proceeds with the carrying amount and are recognised in profit or loss.

 
2.8

Revalued assets

Individual freehold and leasehold properties are carried at current year value at fair value at the date of the revaluation 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.
Fair values are determined from market based evidence normally undertaken by professionally qualified valuers.

Revaluation gains and losses are recognised in other comprehensive income unless losses exceed the previously recognised gains or reflect a clear consumption of economic benefits, in which case the excess losses are recognised in profit or loss.

 
2.9

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.

At each balance sheet date, stocks are assessed for impairment. If stock is impaired, the carrying amount is reduced to its selling price less costs to complete and sell. The impairment loss is recognised immediately in profit or loss.

Page 16

 
MATERIAL APPLICATIONS LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MAY 2024

2.Accounting policies (continued)

 
2.10

Cash and cash equivalents

Cash is represented by cash in hand and deposits with financial institutions repayable without penalty on notice of not more than 24 hours. Cash equivalents are highly liquid investments that mature in no more than three months from the date of acquisition and that are readily convertible to known amounts of cash with insignificant risk of change in value.

In the Statement of cash flows, cash and cash equivalents are shown net of bank overdrafts that are repayable on demand and form an integral part of the Company's cash management.

 
2.11

Financial instruments

The Company has elected to apply the provisions of Section 11 “Basic Financial Instruments” 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 trade and other debtors, cash and bank balances, are initially measured at their transaction price (adjusted for transaction costs except in the initial measurement of financial assets that are subsequently measured at fair value through profit and loss) and are subsequently carried at their amortised cost using the effective interest method, less any provision for impairment, 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.

Discounting is omitted where the effect of discounting is immaterial. The Company's cash and cash equivalents, trade and most other debtors due with the operating cycle fall into this category of financial instruments.

Impairment of financial assets

At the end of each reporting period financial assets measured at amortised cost are assessed for objective evidence of impairment. 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. 

Financial assets are impaired when events, subsequent to their initial recognition, indicate the estimated future cash flows derived from the financial asset(s) have been adversely impacted. The impairment loss will be the difference between the current carrying amount and the present value of the future cash flows at the asset(s) original effective interest rate.

If there is a favourable change in relation to the events surrounding the impairment loss then the impairment can be reviewed for possible reversal. The reversal will not cause the current carrying amount to exceed the original carrying amount had the impairment not been recognised. The impairment reversal is recognised in the profit or loss.
 

Page 17

 
MATERIAL APPLICATIONS LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MAY 2024

2.Accounting policies (continued)


2.11
Financial instruments (continued)

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 the deduction of all its liabilities.
Derecognition of financial assets
Financial assets are derecognised when their contractual right to future cash flow expire, or are settled, or when the Company transfers the asset and substantially all the risks and rewards of ownership to another party. If significant risks and rewards of ownership are retained after the transfer to another party, then the Company will continue to recognise the value of the portion of the risks and rewards retained.
Derecognition of financial liabilities
Financial liabilities are derecognised when the Company's contractual obligations expire or are discharged or cancelled.




Page 18

 
MATERIAL APPLICATIONS LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MAY 2024

3.


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.
Determining the amount to be recognised for a contract requires estimation of the stage of completion of that contract.


4.


Turnover

The whole of the turnover is attributable to principal activity of the company.

All turnover arose within the United Kingdom.


5.


Operating profit

The operating profit is stated after charging:

2024
2023
£
£

Fees payable to the company's auditor for the audit of the comapny's financial statements
17,500
16,670

Depreciation
219,395
244,509

Other operating lease rentals
47,213
32,807

Page 19

 
MATERIAL APPLICATIONS LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MAY 2024

6.


Employees

Staff costs, including directors' remuneration, were as follows:


2024
2023
£
£

Wages and salaries
1,822,763
1,665,247

Social security costs
88,412
139,537

Cost of defined contribution scheme
23,423
24,425

1,934,598
1,829,209


The average monthly number of employees, including the directors, during the year was as follows:


        2024
        2023
            No.
            No.







Production
20
25



Management and administration
8
8

28
33


7.


Directors' remuneration

2024
2023
£
£

Directors' emoluments
263,878
254,974

Company contributions to defined contribution pension schemes
2,642
3,852

266,520
258,826


During the year retirement benefits were accruing to 2 directors (2023 - 2) in respect of defined contribution pension schemes.

The highest paid director received remuneration of £117,558 (2023 - £113,414).

The value of the Company's contributions paid to a defined contribution pension scheme in respect of the highest paid director amounted to £1,321 (2023 - £1,321).

Page 20

 
MATERIAL APPLICATIONS LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MAY 2024

8.


Interest receivable

2024
2023
£
£


Other interest receivable
92
18

92
18


9.


Interest payable and similar expenses

2024
2023
£
£


Bank interest payable
(107,530)
46,873

Finance leases and hire purchase contracts
25,884
15,792

(81,646)
62,665


10.


Taxation


2024
2023
£
£

Corporation tax


Current tax on profits for the year
62,050
(25,476)


62,050
(25,476)


Total current tax
62,050
(25,476)

Deferred tax


Origination and reversal of timing differences
(21,407)
170,511

Total deferred tax
(21,407)
170,511


Tax on profit
40,643
145,035
Page 21

 
MATERIAL APPLICATIONS LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MAY 2024
 
10.Taxation (continued)


Factors affecting tax charge for the year

The tax assessed for the year is lower than (2023 - lower than) the standard rate of corporation tax in the UK of 25% (2023 - 20%). The differences are explained below:

2024
2023
£
£


Profit on ordinary activities before tax
312,992
914,734


Profit on ordinary activities multiplied by standard rate of corporation tax in the UK of 25% (2023 - 20%)
78,248
182,947

Effects of:


Expenses not deductible for tax purposes, other than goodwill amortisation and impairment
766
913

Capital allowances for year in excess of depreciation
(38,371)
(29,678)

Effect of change in tax rate
-
(9,147)

Total tax charge for the year
40,643
145,035


Factors that may affect future tax charges

There were no factors that may affect future tax charges.


11.


Dividends

2024
2023
£
£


Interim paid
60,000
186,932

60,000
186,932

Page 22

 
MATERIAL APPLICATIONS LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MAY 2024

12.


Intangible assets




Goodwill

£



Cost


At 1 June 2023
44,567



At 31 May 2024

44,567



Amortisation


At 1 June 2023
44,567



At 31 May 2024

44,567



Net book value



At 31 May 2024
-



At 31 May 2023
-



Page 23

 
MATERIAL APPLICATIONS LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MAY 2024

13.


Tangible fixed assets





Freehold land and buildings
Plant and equipment
Motor vehicles
Fixtures and fittings
Computers
Assets under construction
Total

£
£
£
£
£
£
£



Cost or valuation


At 1 June 2023
3,115,000
1,610,653
19,600
29,614
29,018
-
4,803,885


Additions
-
61,061
-
-
2,498
223,589
287,148



At 31 May 2024

3,115,000
1,671,714
19,600
29,614
31,516
223,589
5,091,033



Depreciation


At 1 June 2023
131,667
504,181
19,600
16,011
21,021
-
692,480


Charge for the year on owned assets
71,000
217,852
-
2,961
2,376
-
294,189



At 31 May 2024

202,667
722,033
19,600
18,972
23,397
-
986,669



Net book value



At 31 May 2024
2,912,333
949,681
-
10,642
8,119
223,589
4,104,364



At 31 May 2023
2,983,333
1,106,472
-
13,603
7,997
-
4,111,405




The net book value of land and buildings may be further analysed as follows:


2024
2023
£
£

Freehold
2,912,333
2,983,333

2,912,333
2,983,333


Page 24

 
MATERIAL APPLICATIONS LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MAY 2024

           13.Tangible fixed assets (continued)

The net book value of assets held under finance leases or hire purchase contracts, included above, are as follows:


2024
2023
£
£



Plant and machinery
748,351
852,857

748,351
852,857

Cost or valuation at 31 May 2024 is as follows:

Land and buildings
£


At cost
554,746
At valuation:

6 January 2022
2,560,254



3,115,000

Land and buildings with a carrying amount of £2,912,333 were revalued at 6 January 2022, by Avison Young (UK) Limited, independent RICS registered valuers not connected with the company on the basis of market value. The valuation conforms to International Valuation Standards and was based on recent market transactions on arm's length terms for similar properties.

If the land and buildings had not been included at valuation they would have been included under the historical cost convention as follows:

2024
2023
£
£



Cost
554,746
554,746

Accumulated depreciation
(81,145)
(73,042)

Net book value
473,601
481,704


14.


Stocks

2024
2023
£
£

Work in progress
409,340
284,489

409,340
284,489


Page 25

 
MATERIAL APPLICATIONS LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MAY 2024

15.


Debtors

As restated
2024
2023
£
£


Trade debtors
5,102
-

Other debtors
1,679,644
1,401,311

Prepayments and accrued income
20,754
8,852

1,705,500
1,410,163



16.


Cash and cash equivalents

2024
2023
£
£

Cash at bank and in hand
1,545,384
1,822,128

1,545,384
1,822,128



17.


Creditors: Amounts falling due within one year

2024
2023
£
£

Bank loans
39,973
39,452

Trade creditors
1,887,328
1,363,202

Corporation tax
62,050
-

Other taxation and social security
32,233
50,730

Obligations under finance lease and hire purchase contracts
200,009
202,750

Other creditors
16,637
291,480

Accruals and deferred income
18,444
19,444

2,256,674
1,967,058


Page 26

 
MATERIAL APPLICATIONS LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MAY 2024

18.


Creditors: Amounts falling due after more than one year

2024
2023
£
£

Bank loans
494,472
563,924

Net obligations under finance leases and hire purchase contracts
452,329
652,238

946,801
1,216,162


The following liabilities were secured:

2024
2023
£
£



Mortgage
534,445
571,809

Hire purchase
652,338
854,988

1,186,783
1,426,797

Details of security provided:

The mortgage is secured by a fixed charge over the property dated 30 March 2022 and a floating charge over other assets of the Company dated 29 March 2022.
The hire purchase creditors are secured on the assets to which the finance relates.

The aggregate amount of liabilities repayable wholly or in part more than five years after the balance sheet date is:

2024
2023
£
£


Repayable by instalments
347,351
410,330

347,351
410,330

The mortgage dated May 2022, is repayable over a 15 year period. Interest is charged at a rate of 4.51% above base (fixed for 5 years from May 2022).

Page 27

 
MATERIAL APPLICATIONS LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MAY 2024

19.


Loans


Analysis of the maturity of loans is given below:


2024
2023
£
£

Amounts falling due within one year

Bank loans
39,973
39,452


39,973
39,452

Amounts falling due 1-2 years

Bank loans
41,973
39,973


41,973
39,973

Amounts falling due 2-5 years

Bank loans
105,148
113,621


105,148
113,621

Amounts falling due after more than 5 years

Bank loans
347,351
410,330

347,351
410,330

534,445
603,376



20.


Finance lease obligations


Minimum lease payments under hire purchase fall due as follows:

2024
2023
£
£


Within one year
200,009
202,750

In two to five years
452,229
652,238

652,238
854,988

Page 28

 
MATERIAL APPLICATIONS LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MAY 2024

21.


Deferred taxation




2024


£






At beginning of year
(902,008)


Charged to profit or loss
21,407



At end of year
(880,601)

The provision for deferred taxation is made up as follows:

2024
2023
£
£


Accelerated capital allowances
(351,851)
(373,258)

Revaluations
(528,750)
(528,750)

(880,601)
(902,008)


22.


Share capital

2024
2023
£
£
Allotted, called up and fully paid



39 (2023 - 39) A shares of £1.00 each
39
39
20 (2023 - 20) B shares of £1.00 each
20
20
19 (2023 - 19) C shares of £1.00 each
19
19
1 (2023 - 1) D share of £1.00
1
1
1 (2023 - 1) E share of £1.00
1
1

80

80



23.


Reserves

Revaluation reserve

The revaluation reserve includes the change in valuation of the company's freehold property net of related deferred tax and depreciation charges on the revalued amount.

Profit and loss account

The profit and loss account includes the accumulated retained earnings net of dividends.

Page 29

 
MATERIAL APPLICATIONS LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MAY 2024

24.


Prior year adjustment

The prior year adjustment is in respect of an historic correction to contract related debtors which is reflected in a restatement of opening reserves at 1 June 2022 and has no effect on either the current or prior period trading results.


25.


Commitments under operating leases

At 31 May 2024 the Company had future minimum lease payments due under non-cancellable operating leases for each of the following periods:

2024
2023
£
£


Not later than 1 year
31,453
23,265

Later than 1 year and not later than 5 years
43,474
5,558

74,927
28,823


26.


Transactions with directors

At 1 June 2023 there was a credit balance on P J Kitching's directors loan of £167,902. The net withdrawals during the year were £192,861, leaving a debit balance of £24,959 at 31 May 2024. 
The loan was repaid in full in February 2025.


27.


Related party transactions

During the year dividends of £60,000 were paid to the directors.

 
Page 30