Company registration number 04364671 (England and Wales)
ADVANCED MANUFACTURING (SHEFFIELD) LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2024
ADVANCED MANUFACTURING (SHEFFIELD) LIMITED
COMPANY INFORMATION
Directors
Dr G Morgan
M Hands
N Lane
Company number
04364671
Registered office
Unit B
Poplars Business Park
Poplar Way
Rotherham
South Yorkshire
S60 5TR
Auditor
Hart Shaw LLP
Europa Link
Sheffield Business Park
Sheffield
S9 1XU
ADVANCED MANUFACTURING (SHEFFIELD) LIMITED
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
Notes to the financial statements
11 - 23
ADVANCED MANUFACTURING (SHEFFIELD) LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 30 JUNE 2024
- 1 -
The directors present the strategic report for the year ended 30 June 2024.
Review of the business
The financial year to 2024 saw a nominal increase in revenue over 2023. A number of orders that were won in the previous period were manufactured which saw a busy year in the technical area of the company as they were brought to market.
We undertook to develop many of the processes in the business to ensure that we had robust systems across many facets of the business. This encompassed all functions within the business with new reporting structures being implemented and a focus on delivery of the business objectives.
There was no capacity added in the year as it was deemed to be sensible to ensure we have good efficiency on the existing assets. There was extra factory space taken on to allow better storage and a working area for parts preparation, as the increased number of machines had led to the onsite storage area being reduced within the factory below the optimum size.
There were a number of personnel changes which has led to changes within various functions and which have led to new working practices.
The main markets that are core to the business are buoyant and offer considerable opportunities going forward. We have endeavoured to build a handful of strategic partnerships both within the UK and abroad.
Political and Economic Events
Whilst news and conditions across the world have generally deteriorated during the year, they have had no direct detrimental effect on our sphere of operation.
Our supply chains have improved over the year but on a historic view still remain tighter than the norm. Employment availability improved by a similar margin although it has been easier in previous years.
Energy pricing continues to prove a difficult issue to predict due to world events. In recent months some hedging has taken place along with buying on a spot basis. In turn the price level of energy has caused demand for our products to increase as power generation goes through their changes.
Sterling has strengthened marginally during the year and this has led to taking a hedging approach.
Following the change of Government in the UK, which was necessary for a reset, the early indications are that whilst economic growth is a key pillar of their strategy, not all measures and policies seem to be pro-business who are the main contributors to such growth. This however is seen elsewhere in the larger economies of the EU.
ADVANCED MANUFACTURING (SHEFFIELD) LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2024
- 2 -
Principal risks and uncertainties
Stability in the world continues to elude the desires of national governments but generally organisations and individuals push forward to improve their positions within the national framework. This gives some hope that the future will not be too bleak.
In the UK we are reaching the point where the high level economic statistics have to improve by implementing a reset of policies, as without an improvement, the UK is on the decline as regards relevance on the world stage. The UK is not alone as other EU countries are in similar predicaments and remain a huge distance behind the US over the last decade for productivity growth. The Board are confident however that within our markets overall demand in the coming years will be strong and increasing.
Interest rates are predicted to soften over the next 12 months which is welcome news although a good portion of our borrowings are of a fixed nature. With pressure on the main costs of operating a machining business and not being able to pass these on as and when they occur means we do continue to monitor our cash resources each month to ensure good practice, and selecting efficient suppliers.
Cost of living pressures still abound for many citizens and hence increases are given to our staff to ensure retention and that we carry out regular benchmarking on pay rates.
Although the number of possible suppliers of any raw material that we require have reduced over the last few years, generally we can source what is needed.
The Directors continue to review global events and market risks as they all have the potential to affect our business outlook. We await with hope that the UK starts to grow at a faster rate in the next 12 months. We believe our core markets are more robust than many businesses across the UK are currently facing but it appears that world events seem more unpredictable than ever.
Key performance indicators
New Business Planning techniques have been developed working in conjunction with Sharing in Growth organisation and how these disseminate from top level objectives through departments and eventually to individuals. This goes forward to 3 years hence and then into more details as the short term is considered.
KPI’s are the outputs from this exercise and are reviewed on a regular basis and at various levels within the company. These are a means to establishing what is performing to target and those that are falling short.
N Lane
Director
11 November 2024
ADVANCED MANUFACTURING (SHEFFIELD) LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 30 JUNE 2024
- 3 -
The directors present their annual report and financial statements for the year ended 30 June 2024.
Principal activities
The principal activity of the company continued to be the provision of a bespoke manufacturing and machining service to produce a range of components from mainly hard metals for various industries. The principle sectors supplied are Aerospace and Energy. The company machines parts that might be utilised in new product development phase, prototypes, through to delivering parts to the build line at our customers.
Results and dividends
The results for the year are set out on page 8.
Ordinary dividends were paid amounting to £260,000. 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:
Dr G Morgan
M Hands
N Lane
Future developments
2024 witnessed a small uplift in revenue alongside a continued effort to broaden the product range and consolidate the considerable growth that had been achieved in 2023. In the coming financial year we are planning on a double digit growth, a continued focus on internal efficiencies and developments with our main customers.
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.
Medium-sized companies exemption
This report has been prepared in accordance with the provisions applicable to companies entitled to the medium-sized companies exemption.
On behalf of the board
N Lane
Director
11 November 2024
ADVANCED MANUFACTURING (SHEFFIELD) LIMITED
DIRECTORS' RESPONSIBILITIES STATEMENT
FOR THE YEAR ENDED 30 JUNE 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;
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.
ADVANCED MANUFACTURING (SHEFFIELD) LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBER OF ADVANCED MANUFACTURING (SHEFFIELD) LIMITED
- 5 -
Opinion
We have audited the financial statements of Advanced Manufacturing (Sheffield) Limited (the 'company') for the year ended 30 June 2024 which comprise the statement of comprehensive income, the balance sheet, the statement of changes in equity 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 June 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.
ADVANCED MANUFACTURING (SHEFFIELD) LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBER OF ADVANCED MANUFACTURING (SHEFFIELD) LIMITED
- 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.
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:
At the planning stage we identified areas of laws and regulations that could reasonably be expected to have a material effect on the financial statements from our general commercial and sector experience and through discussion with the directors and other management, as required by auditing standards. The potential effect of any laws and regulation on the financial statements can vary considerably. There are laws and regulations that directly affect the financial statements (e.g. the Companies Act) as well as many other operational laws and regulations where the consequences of non-compliance could have a material effect on amounts or disclosures in the financial statements. Owing to the size, nature and complexity of the organisation and the applicable laws and regulations to which it must adhere, the risk of material misstatement was deemed to be low therefore the procedures performed by the audit team were limited to:
Communicating identified laws and regulations at planning throughout the audit team to remain alert to any indications of non-compliance throughout the audit.
Enquiry of management and those charged with governance around actual and potential litigation and claims as well as non-compliance with laws and regulations.
Reviewing minutes of meetings of those charged with governance.
Reviewing financial statement disclosures and testing to supporting documentation to assess compliance with applicable laws and regulations.
ADVANCED MANUFACTURING (SHEFFIELD) LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBER OF ADVANCED MANUFACTURING (SHEFFIELD) LIMITED
- 7 -
We have assessed the overall susceptibility of the financial statements to material misstatement due to fraud. Management override is the most likely way in which fraud might present itself and as such is inherently high risk on any audit. Management override, which may cause there to be a material misstatement within the financial statements, may present itself in a number of ways, for example:
Override of internal controls (e.g. segregation of duties)
Entering into transactions outside the normal course of business, especially with related parties
Fraudulent revenue recognition, including fictitious sales and sales being recorded in the wrong period.
Presenting bias in accounting judgements and estimates, particularly ones that are key to the business.
In order to reduce the risk of material misstatement to an acceptable level, numerous audit procedures were performed including:
Enquiry of management, those charged with governance around actual and potential litigation and claims.
Enquiry of entity staff in tax and compliance functions to identify any instances of non-compliance with laws and regulations.
Reviewing minutes of meetings of those charged with governance.
Reviewing financial statement disclosures and testing to supporting documentation to assess compliance with applicable laws and regulations.
Auditing the risk of management override of controls, including through testing journal entries and other adjustments for appropriateness, and evaluating the business rationale of significant transactions outside the normal course of business.
Owing to the inherent limitations of an audit, there is an unavoidable risk that we may not have detected material misstatements in the financial statements, even though we have performed our audit in accordance with auditing standards. Furthermore, as with all audits, there is a higher risk of irregularities (especially those relating to fraud) being undetected, as these may involve the override of internal controls, collusion, intentional omissions and misrepresentations etc. We are not responsible for preventing non-compliance or fraud and therefore cannot be expected to detect all instances of such. Our audit was not designed to identify misstatements or other irregularities that would not be considered to be material to the financial statements. The further removed non-compliance with laws and regulations is from the events and transactions reflected in the financial statements, the less likely we would become aware of it.
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.
This report is made solely to the company's member 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 member those matters we are required to state to the member 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 member, for our audit work, for this report, or for the opinions we have formed.
Martin McDonagh
Senior Statutory Auditor
For and on behalf of Hart Shaw LLP
13 November 2024
Chartered Accountants
Statutory Auditor
Europa Link
Sheffield Business Park
Sheffield
S9 1XU
ADVANCED MANUFACTURING (SHEFFIELD) LIMITED
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 30 JUNE 2024
- 8 -
2024
2023
Notes
£
£
Turnover
3
9,198,307
8,980,584
Cost of sales
(6,353,011)
(6,849,520)
Gross profit
2,845,296
2,131,064
Administrative expenses
(2,610,213)
(1,675,468)
Other operating income
482,856
575,204
Operating profit
4
717,939
1,030,800
Interest receivable and similar income
7
114,040
Interest payable and similar expenses
8
(258,281)
(208,395)
Profit before taxation
459,658
936,445
Tax on profit
9
(35,858)
226,716
Profit for the financial year
423,800
1,163,161
The profit and loss account has been prepared on the basis that all operations are continuing operations.
ADVANCED MANUFACTURING (SHEFFIELD) LIMITED
BALANCE SHEET
- 9 -
2024
2023
Notes
£
£
£
£
Fixed assets
Intangible assets
11
85,512
122,910
Tangible assets
12
4,070,099
4,747,824
4,155,611
4,870,734
Current assets
Stocks
13
120,337
297,616
Debtors
14
4,311,548
4,268,222
Cash at bank and in hand
115,450
369,791
4,547,335
4,935,629
Creditors: amounts falling due within one year
15
(2,583,448)
(3,516,122)
Net current assets
1,963,887
1,419,507
Total assets less current liabilities
6,119,498
6,290,241
Creditors: amounts falling due after more than one year
16
(2,657,520)
(3,003,663)
Provisions for liabilities
Deferred tax liability
19
622,800
611,200
(622,800)
(611,200)
Net assets
2,839,178
2,675,378
Capital and reserves
Called up share capital
22
100
100
Revaluation reserve
85,519
109,773
Profit and loss reserves
2,753,559
2,565,505
Total equity
2,839,178
2,675,378
These financial statements have been prepared in accordance with the provisions relating to medium-sized companies.
The financial statements were approved by the board of directors and authorised for issue on 11 November 2024 and are signed on its behalf by:
N Lane
Director
Company registration number 04364671 (England and Wales)
ADVANCED MANUFACTURING (SHEFFIELD) LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 30 JUNE 2024
- 10 -
Share capital
Revaluation reserve
Profit and loss reserves
Total
Notes
£
£
£
£
Balance at 1 July 2022
100
134,027
1,578,090
1,712,217
Year ended 30 June 2023:
Profit and total comprehensive income
-
-
1,163,161
1,163,161
Dividends
10
-
-
(200,000)
(200,000)
Transfers
-
(24,254)
24,254
-
Balance at 30 June 2023
100
109,773
2,565,505
2,675,378
Year ended 30 June 2024:
Profit and total comprehensive income
-
-
423,800
423,800
Dividends
10
-
-
(260,000)
(260,000)
Transfers
-
(24,254)
24,254
-
Balance at 30 June 2024
100
85,519
2,753,559
2,839,178
ADVANCED MANUFACTURING (SHEFFIELD) LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2024
- 11 -
1
Accounting policies
Company information
Advanced Manufacturing (Sheffield) Limited is a private company, limited by shares and incorporated in England and Wales. The registered office is Unit B, Poplars Business Park, Poplar Way, Rotherham, South Yorkshire, S60 5TR.
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 and to include investment properties and certain financial instruments at fair value]. The principal accounting policies adopted are set out below.
This company is a qualifying entity for the purposes of FRS 102, being a member of a group where the parent of that group prepares publicly available consolidated financial statements, including this company, which are intended to give a true and fair view of the assets, liabilities, financial position and profit or loss of the group. The company has therefore taken advantage of exemptions from the following disclosure requirements:
Section 7 ‘Statement of Cash Flows’: Presentation of a statement of cash flow and related notes and disclosures;
Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instrument Issues: Interest income/expense and net gains/losses for financial instruments not measured at fair value; basis of determining fair values; details of collateral, loan defaults or breaches, details of hedges, hedging fair value changes recognised in profit or loss and in other comprehensive income;
Section 26 ‘Share based Payment’: Share-based payment expense charged to profit or loss, reconciliation of opening and closing number and weighted average exercise price of share options, how the fair value of options granted was measured, measurement and carrying amount of liabilities for cash-settled share-based payments, explanation of modifications to arrangements;
The financial statements of the company are consolidated in the financial statements of Advanced Manufacturing Holdings Limited . These consolidated financial statements are available from its registered office Unit B, Poplars Business Park, Poplar Way, Rotherham, S60 5TR.
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
Revenue from contracts for the provision of machining services 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.
1.4
Intangible fixed assets other than goodwill
Intangible assets acquired separately from a business are recognised at cost and are subsequently measured at cost less accumulated amortisation and accumulated impairment losses.
ADVANCED MANUFACTURING (SHEFFIELD) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2024
1
Accounting policies
(Continued)
- 12 -
Amortisation is recognised so as to write off the cost or valuation of assets less their residual values over their useful lives on the following bases:
Software
10-33% Straight Line
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:
CNC Machines
5, 10 & 15 years straight line
Leasehold improvements
Over the remainder of the term of the lease
Plant and equipment
10 - 33% straight line
Motor vehicles
4 - 5 years
The gain or loss arising on the disposal of an asset is determined as the difference between the sale proceeds and the carrying value of the asset, and is credited or charged to profit or loss.
1.6
Impairment of fixed assets
At each reporting period end date, the company reviews the carrying amounts of its tangible and intangible 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.
1.7
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.
1.8
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.
ADVANCED MANUFACTURING (SHEFFIELD) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2024
1
Accounting policies
(Continued)
- 13 -
1.9
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.
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.
ADVANCED MANUFACTURING (SHEFFIELD) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2024
1
Accounting policies
(Continued)
- 14 -
Basic financial liabilities
Basic financial liabilities, including creditors, bank loans, loans from fellow group companies and preference shares that are classified as debt, 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.
1.10
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.
1.11
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.
ADVANCED MANUFACTURING (SHEFFIELD) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2024
1
Accounting policies
(Continued)
- 15 -
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.
1.12
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.
1.13
Retirement benefits
Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.
1.14
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.
1.15
Government grants
Government grants are recognised at the fair value of the asset received or receivable when there is reasonable assurance that the grant conditions will be met and the grants will be received.
A grant that specifies performance conditions is recognised in income when the performance conditions are met. Where a grant does not specify performance conditions it is recognised in income when the proceeds are received or receivable. A grant received before the recognition criteria are satisfied is recognised as a liability.
1.16
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.
ADVANCED MANUFACTURING (SHEFFIELD) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2024
- 16 -
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.
Critical judgements
The following judgements (apart from those involving estimates) have had the most significant effect on amounts recognised in the financial statements.
Recognition of revenue as service contracts
The company has two distinct types of contracts for rendering of services which were in progress at the year end. These contracts fall into two categories;
Despite the differences in the above contracts it has been considered reasonable to treat these the same in line with the principal activity of the Company being to provide a bespoke machining service. As such, all contracts regardless of who purchases the raw material are treated as service contracts and therefore revenue is recognised in line with the stage of completion of the contract.
In making this judgement, management has considered the detailed criteria set out for the recognition of revenue in FRS 102 Section 23.
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.
Accrued income in relating to service contracts
Revenue from service contracts is recognised by reference to the stage of completion which is estimated based on costs incurred to date and the estimated cost to complete. Given the level of estimation involved in the costs to complete, actual outcomes could vary from these estimates. Furthermore, had the directors chosen a different judgement for assessing the stage of completion then these outcomes could vary.
The company had a number of service contracts which were in progress at the year end. At the 30 June 2024 the company has in its balance sheet amounts recoverable on service contracts of £2,629,549 (2023 - £1,954,897).
3
Turnover and other revenue
2024
2023
£
£
Turnover analysed by class of business
Sale of machining services
9,198,307
8,980,584
ADVANCED MANUFACTURING (SHEFFIELD) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2024
3
Turnover and other revenue
(Continued)
- 17 -
2024
2023
£
£
Other revenue
Interest income
-
114,040
Grants received
482,856
575,204
4
Operating profit
2024
2023
Operating profit for the year is stated after charging/(crediting):
£
£
Exchange (gains)/losses
(7,770)
11,139
Government grants
(482,856)
(575,204)
Fees payable to the company's auditor for the audit of the company's financial statements
15,475
19,500
Depreciation of owned tangible fixed assets
1,161,239
942,383
Amortisation of intangible assets
37,398
41,077
5
Employees
The average monthly number of persons (including directors) employed by the company during the year was:
2024
2023
Number
Number
90
82
Their aggregate remuneration comprised:
2024
2023
£
£
Wages and salaries
3,101,818
2,751,721
Social security costs
277,856
249,987
Pension costs
141,143
116,065
3,520,817
3,117,773
6
Directors' remuneration
2024
2023
£
£
Remuneration for qualifying services
238,091
263,270
Company pension contributions to defined contribution schemes
12,500
10,046
250,591
273,316
ADVANCED MANUFACTURING (SHEFFIELD) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 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
100,000
100,500
Company pension contributions to defined contribution schemes
6,250
5,023
7
Interest receivable and similar income
2024
2023
£
£
Interest income
Interest receivable from group companies
112,143
Other interest received
1,897
Total income
114,040
8
Interest payable and similar expenses
2024
2023
£
£
Interest on bank overdrafts and loans
5,531
1,854
Interest on finance leases
2,092
Other loan interest payable
252,750
204,449
258,281
208,395
9
Taxation
2024
2023
£
£
Current tax
UK corporation tax on profits for the current period
13,948
(266,903)
Adjustments in respect of prior periods
10,310
(335,556)
Total current tax
24,258
(602,459)
Deferred tax
Origination and reversal of timing differences
11,600
375,743
Total tax charge/(credit)
35,858
(226,716)
ADVANCED MANUFACTURING (SHEFFIELD) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2024
9
Taxation
(Continued)
- 19 -
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
459,658
936,445
Expected tax charge based on the standard rate of corporation tax in the UK of 25.00% (2023: 19.00%)
114,915
177,925
Tax effect of expenses that are not deductible in determining taxable profit
1,398
1,956
Effect of change in corporation tax rate
193,011
Permanent capital allowances in excess of depreciation
(59,315)
Research and development tax credit
(70,145)
(204,737)
Under/(over) provided in prior years
(10,310)
(335,556)
Taxation charge/(credit) for the year
35,858
(226,716)
10
Dividends
2024
2023
£
£
Final paid
260,000
200,000
11
Intangible fixed assets
Software
£
Cost
At 1 July 2023 and 30 June 2024
370,301
Amortisation and impairment
At 1 July 2023
247,391
Amortisation charged for the year
37,398
At 30 June 2024
284,789
Carrying amount
At 30 June 2024
85,512
At 30 June 2023
122,910
ADVANCED MANUFACTURING (SHEFFIELD) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2024
- 20 -
12
Tangible fixed assets
CNC Machines
Leasehold improvements
Assets under construction
Plant and equipment
Motor vehicles
Total
£
£
£
£
£
£
Cost or valuation
At 1 July 2023
6,718,538
476,631
2,120,392
45,900
9,361,461
Additions
55,579
40,424
68,420
319,091
483,514
At 30 June 2024
6,774,117
517,055
68,420
2,439,483
45,900
9,844,975
Depreciation and impairment
At 1 July 2023
2,892,470
308,460
1,395,224
17,483
4,613,637
Depreciation charged in the year
752,285
62,303
340,451
6,200
1,161,239
At 30 June 2024
3,644,755
370,763
1,735,675
23,683
5,774,876
Carrying amount
At 30 June 2024
3,129,362
146,292
68,420
703,808
22,217
4,070,099
At 30 June 2023
3,826,068
168,171
725,168
28,417
4,747,824
The net carrying value of tangible fixed assets includes the following in respect of assets held under finance leases or hire purchase contracts.
2024
2023
£
£
Plant and equipment
261,672
87,739
Motor vehicles
28,417
CNC Machines
2,149,548
2,329,977
2,411,220
2,446,133
The combined total of CNC Machines held at a cost of £1,669,700 and CNC Machines held at a valuation of £942,500 (including a revaluation uplift of £432,500) at 31 December 2012 became those held at a deemed cost of £2,612,200 on transition to FRS 102. Since then further additions of £4,161,917 have been made giving a total cost of £6,774,117.
If, the CNC machines had been included under the historical cost convention they would be presented as follows:
2024
2023
£
£
Cost
6,341,617
6,286,038
Accumulated depreciation
(3,572,723)
(2,845,692)
Carrying value
2,768,894
3,440,346
ADVANCED MANUFACTURING (SHEFFIELD) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2024
- 21 -
13
Stocks
2024
2023
£
£
Raw materials
120,337
297,616
14
Debtors
2024
2023
Amounts falling due within one year:
£
£
Trade debtors
1,233,116
1,125,918
Gross amounts owed by contract customers
2,629,549
1,954,897
Corporation tax recoverable
41,843
266,903
Amounts owed by group undertakings
447,900
Other debtors
57,505
146,349
Prepayments and accrued income
349,535
326,255
4,311,548
4,268,222
15
Creditors: amounts falling due within one year
2024
2023
Notes
£
£
Obligations under finance leases
18
658,811
497,874
Other borrowings
17
176,461
197,847
Trade creditors
575,550
1,068,551
Amounts owed to group undertakings
836,045
Taxation and social security
173,942
74,396
Deferred income
20
1,415,289
Other creditors
53,801
49,352
Accruals and deferred income
108,838
212,813
2,583,448
3,516,122
16
Creditors: amounts falling due after more than one year
2024
2023
Notes
£
£
Obligations under finance leases
18
817,974
839,745
Other borrowings
17
474,664
535,149
Grants received
1,364,882
1,628,769
2,657,520
3,003,663
Secured Loans
Assets held under hire purchase agreement are secured against the assets to which they relate.
Secured loans are secured by the way of a fixed and floating change over various assets of the company.
ADVANCED MANUFACTURING (SHEFFIELD) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2024
- 22 -
17
Loans and overdrafts
2024
2023
£
£
Other loans
651,125
732,996
Payable within one year
176,461
197,847
Payable after one year
474,664
535,149
18
Finance lease obligations
2024
2023
Future minimum lease payments due under finance leases:
£
£
Within one year
658,811
497,874
In two to five years
817,974
839,745
1,476,785
1,337,619
19
Deferred taxation
The following are the major deferred tax liabilities and assets recognised by the company and movements thereon:
Liabilities
Liabilities
2024
2023
Balances:
£
£
Fixed asset timing differences
838,400
1,016,800
Tax Losses
(148,200)
(353,900)
Revaluations
6,700
13,600
Short term timing differences
(3,200)
(10,500)
Unused R&D credit
(70,900)
(54,800)
622,800
611,200
2024
Movements in the year:
£
Liability at 1 July 2023
611,200
Charge to profit or loss
11,600
Liability at 30 June 2024
622,800
The deferred tax liability set out above is expected to reverse within 12 months and relates to accelerated capital allowances that are expected to mature within the same period.
ADVANCED MANUFACTURING (SHEFFIELD) LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2024
- 23 -
20
Deferred income
2024
2023
£
£
Other deferred income
-
1,415,289
21
Retirement benefit schemes
2024
2023
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
141,143
116,065
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.
22
Share capital
2024
2023
2024
2023
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary shares of 1p each
10,000
10,000
100
100
23
Operating lease commitments
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
343,365
484,882
Between two and five years
849,862
979,642
In over five years
15,986
1,193,227
1,480,510
24
Related party transactions
As a subsidiary undertaking of Advanced Manufacturing Holdings Limited, the company has taken advantage of the exemption in FRS 102 “Related party disclosures” not to disclose transactions with group companies.
See note 6 for disclosure of the directors' remuneration.
25
Ultimate controlling party
The ultimate parent undertaking is Advanced Manufacturing Holdings Limited, whose registered office is Unit B Poplars Business Park, Poplar Way, Catcliffe, Rotherham, S60 5TR.
The shares in the parent company are held in such proportion that there is no single controlling party of the Company.
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