Company registration number 01506978 (England and Wales)
TURNSPEED PRECISION ENGINEERING COMPANY LTD
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 JULY 2024
TURNSPEED PRECISION ENGINEERING COMPANY LTD
COMPANY INFORMATION
Directors
Mr J Davies
Miss K Davies
Mr R E J Davies
Secretary
Mr J Davies
Company number
01506978
Registered office
3 Boundary Way
Lufton Trading Estate
YEOVIL
Somerset
BA22 8HZ
Auditor
Old Mill Audit Limited
Maltravers House
Petters Way
YEOVIL
Somerset
BA20 1SH
TURNSPEED PRECISION ENGINEERING COMPANY LTD
CONTENTS
Page
Strategic report
1
Directors' report
2
Directors' responsibilities statement
3
Independent auditor's report
4 - 6
Statement of comprehensive income
7
Balance sheet
8
Statement of changes in equity
9
Statement of cash flows
10
Notes to the financial statements
11 - 26
TURNSPEED PRECISION ENGINEERING COMPANY LTD
STRATEGIC REPORT
FOR THE YEAR ENDED 31 JULY 2024
- 1 -
The directors present the strategic report for the year ended 31 July 2024.
Review of the business
5 year summary
2024 2023 2022 2021 2020
Turnover £9,109,617 £8,317,677 £7,675,630 £6,735,903 £5,827,429
Gross margin 40.77% 38.68% 42.51% 36.39% 30.45%
Net profit before tax £924,656 £549,926 £997,666 £645,319 £36,610
The company has delivered a strong set of results. The business continues to meet customer expectations and remains agile in the market place due to its market leading staff, processes and equipment, including at the new plating facility.
Principal risks and uncertainties
Market risk
The company seeks to manage market risk from competitors by a policy of geographical and market spread.
Foreign exchange risk
Foreign exchange risk is managed by matching foreign currency receipts against foreign currency payments.
Credit risk
The company's credit risk is primarily attributable to its trade debtors. Credit risk is managed by running checks on new customers and by monitoring receipts against payment terms.
Liquidity and cash flow
The company monitors cash flow as part of its day to day control procedures. The directors consider cash flow projections on a monthly basis and ensure that facilities are available to be drawn as necessary.
Mr R E J Davies
Director
2 April 2025
TURNSPEED PRECISION ENGINEERING COMPANY LTD
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 JULY 2024
- 2 -
The directors present their annual report and financial statements for the year ended 31 July 2024.
Principal activities
The principal activity of the company continued to be that of precision light engineers.
Results and dividends
The results for the year are set out on page 7.
Ordinary dividends were paid amounting to £185,000. The directors do not recommend payment of a final dividend.
Directors
The directors who held office during the year and up to the date of signature of the financial statements were as follows:
Mr J Davies
Miss K Davies
Mr R E J Davies
Auditor
Old Mill Audit Limited were appointed as auditor to the company and in accordance with section 485 of the Companies Act 2006, a resolution proposing that they be re-appointed will be put at a General Meeting.
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
Mr R E J Davies
Director
2 April 2025
TURNSPEED PRECISION ENGINEERING COMPANY LTD
DIRECTORS' RESPONSIBILITIES STATEMENT
FOR THE YEAR ENDED 31 JULY 2024
- 3 -
The directors are responsible for preparing the annual report and the financial statements in accordance with applicable law and regulations.
Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). Under company law, the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the company and of the profit or loss of the company for that period.
In preparing these financial statements, the directors are required to:
select suitable accounting policies and then apply them consistently;
make judgements and accounting estimates that are reasonable and prudent; and
prepare the financial statements on the going concern basis unless it is inappropriate to presume that the company will continue in business.
The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the company’s transactions and disclose with reasonable accuracy at any time the financial position of the company and enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
TURNSPEED PRECISION ENGINEERING COMPANY LTD
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF TURNSPEED PRECISION ENGINEERING COMPANY LTD
- 4 -
Opinion
We have audited the financial statements of Turnspeed Precision Engineering Company Ltd (the 'company') for the year ended 31 July 2024 which comprise the statement of comprehensive income, the balance sheet, the statement of changes in equity, the statement of cash flows and notes to the financial statements, including significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice).
In our opinion the financial statements:
give a true and fair view of the state of the company's affairs as at 31 July 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.
TURNSPEED PRECISION ENGINEERING COMPANY LTD
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF TURNSPEED PRECISION ENGINEERING COMPANY LTD (CONTINUED)
- 5 -
Matters on which we are required to report by exception
In the light of the knowledge and understanding of the company and its environment obtained in the course of the audit, we have not identified material misstatements in the strategic report or the directors' report.
We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to report to you if, in our opinion:
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.
The extent to which our procedures are capable of detecting irregularities, including fraud, is detailed below.
We gained an understanding of the legal and regulatory framework applicable to the company and the industry in which it operates, and considered the risk of acts by the company that were contrary to applicable laws and regulations, including fraud. We designed audit procedures to respond to the risk, recognising that the risk of not detecting a material misstatement due to fraud is higher than the risk of not detecting one resulting from error, as fraud may involve deliberate concealment by, for example, forgery or intentional misrepresentations, or through collusion.
We focussed on laws and regulations which could give rise to a material misstatement in the financial statements, including, but not limited to, the Companies Act 2006 and UK tax legislation. Our tests included agreeing the financial statement disclosures to underlying supporting documentation and enquiries with management. There are inherent limitations in the audit procedures described above and, 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. We did not identify any key audit matters relating to irregularities, including fraud. As in all our audits, we also addressed the risk of management override of internal controls, including testing journals and evaluating whether there was evidence of bias by the directors that represented a risk of material misstatement due to fraud.
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.
TURNSPEED PRECISION ENGINEERING COMPANY LTD
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF TURNSPEED PRECISION ENGINEERING COMPANY LTD (CONTINUED)
- 6 -
This report is made solely to the company's members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the company's members those matters we are required to state to them in an auditor's report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company's members as a body, for our audit work, for this report, or for the opinions we have formed.
David Jones MSc FCA (Senior Statutory Auditor)
For and on behalf of Old Mill Audit Limited, Statutory Auditor
Maltravers House
Petters Way
YEOVIL
Somerset
BA20 1SH
4 April 2025
TURNSPEED PRECISION ENGINEERING COMPANY LTD
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 JULY 2024
- 7 -
2024
2023
Notes
£
£
Turnover
3
9,109,617
8,317,677
Cost of sales
(5,395,738)
(5,100,565)
Gross profit
3,713,879
3,217,112
Distribution costs
(199,886)
(412,900)
Administrative expenses
(2,323,295)
(1,929,306)
Other operating income
6,406
44,373
Operating profit
4
1,197,104
919,279
Interest receivable and similar income
7
467
Interest payable and similar expenses
8
(272,915)
(369,353)
Profit before taxation
924,656
549,926
Tax on profit
9
(246,577)
(465,748)
Profit for the financial year
678,079
84,178
The profit and loss account has been prepared on the basis that all operations are continuing operations.
TURNSPEED PRECISION ENGINEERING COMPANY LTD
BALANCE SHEET
- 8 -
2024
2023
Notes
£
£
£
£
Fixed assets
Goodwill
11
106,386
115,252
Tangible assets
12
10,924,056
11,044,271
11,030,442
11,159,523
Current assets
Stocks
13
1,077,803
995,296
Debtors
14
2,197,972
2,291,546
Cash at bank and in hand
897
277
3,276,672
3,287,119
Creditors: amounts falling due within one year
15
(2,759,152)
(4,430,361)
Net current assets/(liabilities)
517,520
(1,143,242)
Total assets less current liabilities
11,547,962
10,016,281
Creditors: amounts falling due after more than one year
16
(2,553,293)
(1,761,268)
Provisions for liabilities
Deferred tax liability
19
1,705,151
1,458,574
(1,705,151)
(1,458,574)
Net assets
7,289,518
6,796,439
Capital and reserves
Called up share capital
21
4,600
4,600
Profit and loss reserves
7,284,918
6,791,839
Total equity
7,289,518
6,796,439
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 2 April 2025 and are signed on its behalf by:
Mr R E J Davies
Director
Company registration number 01506978 (England and Wales)
TURNSPEED PRECISION ENGINEERING COMPANY LTD
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 JULY 2024
- 9 -
Share capital
Profit and loss reserves
Total
Notes
£
£
£
Balance at 1 August 2022
4,600
6,892,661
6,897,261
Year ended 31 July 2023:
Profit and total comprehensive income
-
84,178
84,178
Dividends
10
-
(185,000)
(185,000)
Balance at 31 July 2023
4,600
6,791,839
6,796,439
Year ended 31 July 2024:
Profit and total comprehensive income
-
678,079
678,079
Dividends
10
-
(185,000)
(185,000)
Balance at 31 July 2024
4,600
7,284,918
7,289,518
TURNSPEED PRECISION ENGINEERING COMPANY LTD
STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 JULY 2024
- 10 -
2024
2023
Notes
£
£
£
£
Cash flows from operating activities
Cash generated from operations
25
1,634,106
1,823,109
Interest paid
(272,915)
(369,353)
Income taxes refunded/(paid)
13,029
(13,029)
Net cash inflow from operating activities
1,374,220
1,440,727
Investing activities
Purchase of tangible fixed assets
(138,527)
(52,213)
Proceeds on disposal of tangible fixed assets
19,664
Interest received
467
Net cash used in investing activities
(118,396)
(52,213)
Financing activities
Proceeds from borrowings
41,096
Repayment of borrowings
(5,707)
Proceeds of new bank loans
95,581
Repayment of bank loans
(98,609)
(84,444)
Payment of finance leases obligations
(1,096,374)
(1,047,910)
Amounts withdrawn by directors
(166,974)
(133,589)
Net cash used in financing activities
(1,326,568)
(1,170,362)
Net (decrease)/increase in cash and cash equivalents
(70,744)
218,152
Cash and cash equivalents at beginning of year
(19,696)
(237,848)
Cash and cash equivalents at end of year
(90,440)
(19,696)
Relating to:
Cash at bank and in hand
897
277
Bank overdrafts included in creditors payable within one year
(91,337)
(19,973)
TURNSPEED PRECISION ENGINEERING COMPANY LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 JULY 2024
- 11 -
1
Accounting policies
Company information
Turnspeed Precision Engineering Company Ltd is a private company limited by shares incorporated in England and Wales. The registered office is 3 Boundary Way, Lufton Trading Estate, YEOVIL, Somerset, BA22 8HZ.
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, the principal accounting policies adopted are set out below.
1.2
Going concern
Atruet the time of approving the financial statements, the directors have a reasonable expectation that the company has adequate resources to continue in operational existence for the foreseeable future. Thus the directors continue to adopt the going concern basis of accounting in preparing the financial statements.
1.3
Turnover
Turnover is measured at the fair value of the consideration received or receivable, excluding discounts, rebates, value added tax and other sales taxes.
Revenue from the sale of goods is recognised when goods are delivered and legal title has passed.
1.4
Intangible fixed assets - goodwill
Goodwill represents the excess of the cost of acquisition of unincorporated businesses over the fair value of net assets acquired. It is initially recognised as an asset at cost and is subsequently measured at cost less accumulated amortisation and accumulated impairment losses. Goodwill is considered to have a finite useful life and is amortised on a systematic basis over its expected life, which is 15 years.
For the purposes of impairment testing, goodwill is allocated to the cash-generating units expected to benefit from the acquisition. Cash-generating units to which goodwill has been allocated are tested for impairment at least annually, or more frequently when there is an indication that the unit may be impaired. If the recoverable amount of the cash-generating unit is less than the carrying amount of the unit, the impairment loss is allocated first to reduce the carrying amount of any goodwill allocated to the unit and then to the other assets of the unit pro-rata on the basis of the carrying amount of each asset in the unit.
1.5
Tangible fixed assets
Tangible fixed assets are initially measured at cost and subsequently measured at cost or valuation, net of depreciation and any impairment losses.
Depreciation is recognised so as to write off the cost or valuation of assets less their residual values over their useful lives on the following bases:
Freehold land and buildings
50 years straight line
Plant and equipment
15% reducing balance and 5-25 years straight line
Fixtures and fittings
25% reducing balance
Motor vehicles
25% reducing balance
Loose tools, dies and cutters
Not provided
TURNSPEED PRECISION ENGINEERING COMPANY LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 JULY 2024
1
Accounting policies
(Continued)
- 12 -
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.
Depreciation is not applied to land held within freehold property.
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.
Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.
If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (or cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the impairment loss is treated as a revaluation decrease.
Recognised impairment losses are reversed if, and only if, the reasons for the impairment loss have ceased to apply. Where an impairment loss subsequently reverses, the carrying amount of the asset (or cash-generating unit) is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset (or cash-generating unit) in prior years. A reversal of an impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the reversal of the impairment loss is treated as a revaluation increase.
1.7
Stocks
Stock is valued at the lower of cost, using the first in first out method, and selling price less costs to complete and sell. Work in progress is calculated as a percentage of invoiced sales, net of value added tax, in the five week period after the end of the accounting period.
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.
TURNSPEED PRECISION ENGINEERING COMPANY LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 JULY 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.
TURNSPEED PRECISION ENGINEERING COMPANY LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 JULY 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
Derivatives
Derivatives are initially recognised at fair value at the date a derivative contract is entered into and are subsequently remeasured to fair value at each reporting end date. The resulting gain or loss is recognised in profit or loss immediately unless the derivative is designated and effective as a hedging instrument, in which event the timing of the recognition in profit or loss depends on the nature of the hedge relationship.
A derivative with a positive fair value is recognised as a financial asset, whereas a derivative with a negative fair value is recognised as a financial liability.
1.12
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.
TURNSPEED PRECISION ENGINEERING COMPANY LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 JULY 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.
1.13
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.
1.14
Retirement benefits
Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.
1.15
Leases
Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessees. All other leases are classified as operating leases.
Assets held under finance leases are recognised as assets at the lower of the assets fair value at the date of inception and the present value of the minimum lease payments. The related liability is included in the balance sheet as a finance lease obligation. Lease payments are treated as consisting of capital and interest elements. The interest is charged to profit or loss so as to produce a constant periodic rate of interest on the remaining balance of the liability.
Rentals payable under operating leases, including any lease incentives received, are charged to profit or loss on a straight line basis over the term of the relevant lease except where another more systematic basis is more representative of the time pattern in which economic benefits from the leases asset are consumed.
1.16
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.
TURNSPEED PRECISION ENGINEERING COMPANY LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 JULY 2024
1
Accounting policies
(Continued)
- 16 -
1.17
Foreign exchange
Transactions in currencies other than pounds sterling are recorded at the rates of exchange prevailing at the dates of the transactions. At each reporting end date, monetary assets and liabilities that are denominated in foreign currencies are retranslated at the rates prevailing on the reporting end date. Gains and losses arising on translation in the period are included in profit or loss.
2
Judgements and key sources of estimation uncertainty
In the application of the company’s accounting policies, the directors are required to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised where the revision affects only that period, or in the period of the revision and future periods where the revision affects both current and future periods.
Key sources of estimation uncertainty
The estimates and assumptions which have a significant risk of causing a material adjustment to the carrying amount of assets and liabilities are as follows.
Depreciation
Assets are depreciated over their useful economic lives, an estimate that assumes certain factors about the level of repairs, maintenance and replacement that is necessary to maintain the assets in good working order, as well as the residual value of the assets. The carrying amount of fixed assets as at 31 July 2024 was £10,924,056 (2023: £11,044,271) and the depreciation charged in the year was £683,141 (2023: £615,307).
Revenue recognition
Revenue from contracts for the building of machinery is recognised by reference to the stage of completion. The stage of completion is determined by reference to a percentage of sales invoices raised in the weeks following the reporting date. The carrying amount of work in progress as at 31 July 2024 was £627,945 (2023: £461,108).
3
Turnover and other revenue
2024
2023
£
£
Turnover analysed by class of business
Other engineering actitivies
8,931,276
8,114,927
Plating
178,341
202,750
9,109,617
8,317,677
TURNSPEED PRECISION ENGINEERING COMPANY LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 JULY 2024
3
Turnover and other revenue
(Continued)
- 17 -
2024
2023
£
£
Turnover analysed by geographical market
United Kingdom
6,894,996
4,856,367
European Union
1,545,115
2,730,391
Rest of World
669,506
730,919
9,109,617
8,317,677
2024
2023
£
£
Other revenue
Interest income
467
-
Grants received
-
38,335
4
Operating profit
2024
2023
Operating profit for the year is stated after charging/(crediting):
£
£
Exchange losses
2,728
1,598
Government grants
-
(38,335)
Fees payable to the company's auditor for the audit of the company's financial statements
17,652
20,375
Depreciation of owned tangible fixed assets
288,577
291,112
Depreciation of tangible fixed assets held under finance leases
394,564
324,195
Loss on disposal of tangible fixed assets
19,679
-
Amortisation of intangible assets
8,866
8,866
Operating lease charges
58,958
51,482
5
Employees
The average monthly number of persons (including directors) employed by the company during the year was:
2024
2023
Number
Number
Management & office
17
15
Production
46
46
Total
63
61
TURNSPEED PRECISION ENGINEERING COMPANY LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 JULY 2024
5
Employees
(Continued)
- 18 -
Their aggregate remuneration comprised:
2024
2023
£
£
Wages and salaries
2,185,578
1,995,971
Social security costs
221,938
202,161
Pension costs
199,348
193,547
2,606,864
2,391,679
6
Directors' remuneration
2024
2023
£
£
Remuneration for qualifying services
40,696
34,504
Company pension contributions to defined contribution schemes
24,000
24,000
64,696
58,504
The number of directors for whom retirement benefits are accruing under defined contribution schemes amounted to 2 (2023 - 2).
7
Interest receivable and similar income
2024
2023
£
£
Interest income
Other interest income
467
8
Interest payable and similar expenses
2024
2023
£
£
Interest on financial liabilities measured at amortised cost:
Interest on bank overdrafts and loans
99,837
80,404
Other interest on financial liabilities
1,050
100,887
80,404
Other finance costs:
Interest on finance leases and hire purchase contracts
172,028
288,949
272,915
369,353
TURNSPEED PRECISION ENGINEERING COMPANY LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 JULY 2024
- 19 -
9
Taxation
2024
2023
£
£
Current tax
UK corporation tax on profits for the current period
(13,029)
Adjustments in respect of prior periods
(5,546)
Total current tax
(18,575)
Deferred tax
Origination and reversal of timing differences
246,577
484,323
Total tax charge
246,577
465,748
The actual charge for the year can be reconciled to the expected charge for the year based on the profit or loss and the standard rate of tax as follows:
2024
2023
£
£
Profit before taxation
924,656
549,926
Expected tax charge based on the standard rate of corporation tax in the UK of 25.00% (2023: 21.01%)
231,164
115,539
Tax effect of expenses that are not deductible in determining taxable profit
729
470
Effect of change in corporation tax rate
337,503
Depreciation on assets not qualifying for tax allowances
14,684
12,236
Taxation charge for the year
246,577
465,748
10
Dividends
2024
2023
£
£
Interim paid
185,000
185,000
TURNSPEED PRECISION ENGINEERING COMPANY LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 JULY 2024
- 20 -
11
Intangible fixed assets
Goodwill
£
Cost
At 1 August 2023 and 31 July 2024
132,984
Amortisation and impairment
At 1 August 2023
17,732
Amortisation charged for the year
8,866
At 31 July 2024
26,598
Carrying amount
At 31 July 2024
106,386
At 31 July 2023
115,252
12
Tangible fixed assets
Freehold land and buildings
Plant and equipment
Fixtures and fittings
Motor vehicles
Loose tools, dies and cutters
Total
£
£
£
£
£
£
Cost
At 1 August 2023
2,640,046
22,072,317
1,444,631
53,651
1,500
26,212,145
Additions
575,267
27,002
602,269
Disposals
(461,149)
(461,149)
At 31 July 2024
2,640,046
22,186,435
1,471,633
53,651
1,500
26,353,265
Depreciation and impairment
At 1 August 2023
539,952
13,275,681
1,314,747
37,494
15,167,874
Depreciation charged in the year
45,803
599,544
33,744
4,050
683,141
Eliminated in respect of disposals
(421,806)
(421,806)
At 31 July 2024
585,755
13,453,419
1,348,491
41,544
15,429,209
Carrying amount
At 31 July 2024
2,054,291
8,733,016
123,142
12,107
1,500
10,924,056
At 31 July 2023
2,100,094
8,796,636
129,884
16,157
1,500
11,044,271
TURNSPEED PRECISION ENGINEERING COMPANY LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 JULY 2024
12
Tangible fixed assets
(Continued)
- 21 -
Included in cost of land and buildings is freehold land of £350,000 which is not depreciated.
The company has entered into hire purchase agreements, classified as finance leases, that include the option to purchase the items at the end of the lease term for a nominal amount. The loans in respect of the hire purchase agreements are secured against the assets to which they relate.
The net carrying value of tangible fixed assets includes the following in respect of assets held under finance leases or hire purchase contracts.
2024
2023
£
£
Plant and equipment
5,883,009
4,316,357
Motor vehicles
9,933
13,256
Freehold land and buildings
8,686
8,865
5,901,628
4,338,478
13
Stocks
2024
2023
£
£
Raw materials and consumables
449,858
534,188
Work in progress
627,945
461,108
1,077,803
995,296
14
Debtors
2024
2023
Amounts falling due within one year:
£
£
Trade debtors
2,051,791
1,989,114
Corporation tax recoverable
13,029
Other debtors
157,498
Prepayments and accrued income
146,181
131,905
2,197,972
2,291,546
TURNSPEED PRECISION ENGINEERING COMPANY LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 JULY 2024
- 22 -
15
Creditors: amounts falling due within one year
2024
2023
Notes
£
£
Bank loans and overdrafts
17
200,129
119,123
Obligations under finance leases
18
838,550
946,700
Other borrowings
17
13,697
Trade creditors
1,139,168
2,895,094
Taxation and social security
171,705
47,268
Other creditors
224,070
206,082
Accruals and deferred income
171,833
216,094
2,759,152
4,430,361
There is a bank loan of £74,800 (2023: £69,001) included within bank loans and overdrafts, along with hire purchase liabilities of £399,221 (2023: £278,890) included within obligations under finance leases, which are secured by:
a) Debenture including fixed charge over all present freehold and leasehold property; first fixed charge over book and other debts, chattels, goodwill and uncalled capital, both present and future; and first floating charge over all assets and undertaking both present and future, dated 2 September 2005.
b) First legal charge over the freehold property known as 3 Boundary Way, Lufton Trading Estate, Yeovil, Somerset, BA22 8HZ, dated 29 July 2011.
Included within the remaining amount in bank loans and overdrafts is £33,992 (2023: £30,149) relating to an unsecured loan.
The remaining £439,329 (2023: £667,810) included within obligations under finance leases is secured over the assets to which the liabilities relate.
16
Creditors: amounts falling due after more than one year
2024
2023
Notes
£
£
Bank loans and overdrafts
17
614,077
722,328
Obligations under finance leases
18
1,917,524
1,038,940
Other borrowings
17
21,692
2,553,293
1,761,268
TURNSPEED PRECISION ENGINEERING COMPANY LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 JULY 2024
16
Creditors: amounts falling due after more than one year
(Continued)
- 23 -
Bank loans of £598,674 (2023: £672,933) included within bank loans and overdrafts, and hire purchase liabilities of £1,025,682 (2023: £141,420) included within obligations under finance leases, are secured by:
a) Debenture including fixed charge over all present freehold and leasehold property; first fixed charge over book and other debts, chattels, goodwill and uncalled capital, both present and future; and first floating charge over all assets and undertaking both present and future, dated 2 September 2005.
b) First legal charge over the freehold property known as 3 Boundary Way, Lufton Trading Estate, Yeovil, Somerset, BA22 8HZ, dated 29 July 2011.
The remaining £15,403 (2023: £49,395) included within bank loans and overdrafts is unsecured.
The remaining £891,842 (2023: £897,520) included within obligations under finance leases is secured over the assets to which the liabilities relate.
Amounts included above which fall due after five years are as follows:
Payable by instalments
232,114
334,706
17
Loans and overdrafts
2024
2023
£
£
Bank loans
722,869
821,478
Bank overdrafts
91,337
19,973
Other loans
35,389
849,595
841,451
Payable within one year
213,826
119,123
Payable after one year
635,769
722,328
A bank loan of £673,474 (2023: £741,934) included above is repayable in monthly instalments over the twenty year period ending July 2031. The interest rate on the loan is 2.75% above the bank's sterling base rate.
TURNSPEED PRECISION ENGINEERING COMPANY LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 JULY 2024
- 24 -
18
Finance lease obligations
2024
2023
Future minimum lease payments due under finance leases:
£
£
Within one year
1,022,107
1,036,426
In two to five years
2,147,034
1,129,015
3,169,141
2,165,441
Less: future finance charges
(413,067)
(179,801)
2,756,074
1,985,640
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:
£
£
Accelerated capital allowances
1,786,429
1,722,016
Tax losses
(77,049)
(260,102)
Other timing differences
(4,229)
(3,340)
1,705,151
1,458,574
2024
Movements in the year:
£
Liability at 1 August 2023
1,458,574
Charge to profit or loss
246,577
Liability at 31 July 2024
1,705,151
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.
20
Retirement benefit schemes
2024
2023
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
199,348
193,547
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.
TURNSPEED PRECISION ENGINEERING COMPANY LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 JULY 2024
- 25 -
21
Share capital
2024
2023
2024
2023
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary shares of £1 each
4,500
4,500
4,500
4,500
'A' Ordinary shares of £1 each
100
100
100
100
4,600
4,600
4,600
4,600
Each ordinary share is entitled to one vote in any circumstances and each ordinary share is also entitled pari passu to dividend payments or any other distribution, including a distribution from a winding up of the company.
Class 'A' ordinary shares are entitled to dividends. They do not carry any voting rights. On winding up or on a reduction in share capital they are entitled to the repayment of the capital paid up, they are not entitled to any other distributions.
22
Operating lease commitments
Lessee
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
29,716
39,911
Between two and five years
73,120
86,836
In over five years
116,000
132,000
218,836
258,747
23
Directors' transactions
Dividends totalling £185,000 (2023 - £185,000) were paid in the year in respect of shares held by the company's directors.
Interest free loans have been granted by the company to its directors as follows:
Description
% Rate
Opening balance
Amounts advanced
Interest charged
Amounts repaid
Closing balance
£
£
£
£
£
Directors' Loan
2.25
-
16,684
38
(16,722)
-
-
16,684
38
(16,722)
-
TURNSPEED PRECISION ENGINEERING COMPANY LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 JULY 2024
- 26 -
24
Ultimate controlling party
The controlling party is Mr R E J Davies.
25
Cash generated from operations
2024
2023
£
£
Profit after taxation
678,079
84,178
Adjustments for:
Taxation charged
246,577
465,748
Finance costs
272,915
369,353
Investment income
(467)
Amounts withdrawn by directors
166,974
133,589
Loss on disposal of tangible fixed assets
19,679
-
Amortisation and impairment of intangible assets
8,866
8,866
Depreciation and impairment of tangible fixed assets
683,141
615,307
Movements in working capital:
(Increase)/decrease in stocks
(82,507)
22,818
Decrease/(increase) in debtors
80,545
(490,414)
(Decrease)/increase in creditors
(439,696)
613,664
Cash generated from operations
1,634,106
1,823,109
26
Analysis of changes in net debt
1 August 2023
Cash flows
New finance leases
31 July 2024
£
£
£
£
Cash at bank and in hand
277
620
-
897
Bank overdrafts
(19,973)
(71,364)
-
(91,337)
(19,696)
(70,744)
(90,440)
Borrowings excluding overdrafts
(821,478)
63,220
-
(758,258)
Obligations under finance leases
(1,985,640)
1,096,374
(1,866,808)
(2,756,074)
(2,826,814)
1,088,850
(1,866,808)
(3,604,772)
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