Company Registration number:
Sumac Manufacturing (Holdings) Limited
for the Year Ended 30 September 2024
Sumac Manufacturing (Holdings) Limited
Contents
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Company Information |
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Strategic Report |
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Directors' Report |
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Statement of Directors' Responsibilities |
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Independent Auditor's Report |
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Consolidated Profit and Loss Account |
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Consolidated Statement of Comprehensive Income |
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Consolidated Balance Sheet |
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Balance Sheet |
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Consolidated Statement of Changes in Equity |
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Statement of Changes in Equity |
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Consolidated Statement of Cash Flows |
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Notes to the Financial Statements |
Sumac Manufacturing (Holdings) Limited
Company Information
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Directors |
J A Marsh J A Stevenson M A Robson D Clothier |
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Registered office |
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Auditors |
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Sumac Manufacturing (Holdings) Limited
Strategic Report for the Year Ended 30 September 2024
The directors present their strategic report for the year ended 30 September 2024.
Principal activity
The principal activity of the group is precision engineers.
Fair review of the business
The year under review has been challenging for the Group, with ongoing development on the nature of work type. Commercial work has continued to see an ongoing reduction, whilst there continues to be a definitive upturn in more demanding areas such as Defence, Aerospace and Scientific. This has been aided by our investment in the fabrication and sheet metal side of our business which has enabled Sumac to give wider services and support in more complex and challenging market sectors. The effects of the Russian invasion of Ukraine have not been so prominent or of particular concern.
The Group continues to invest heavily in capital equipment and personnel, in both developed and emerging markets, and continues to view this as integral to maintain our competitiveness in a challenging market.
The directors are particularly focussed on business development with new and existing customers, but trading and global economic conditions and pressures remain unpredictable and volatile. Relationships in new business sectors are improving, with focus on aligning business strengths to these emerging markets. Investment continues to support growth in these sectors as necessary, in order to support the positive opportunities that have emerged. Increasing staff and general operating costs remain a challenge, and the drive to automate where possible remains a priority. Previous and continued investment in apprentices is now proving to be beneficial.
Although turnover has increased from the previous year by just over 14%, even with the unrelenting pressure on margins and increasing costs, a gross profit of almost 37% was achieved.
The group's key financial and other performance indicators during the year were as follows:
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Financial KPIs |
Unit |
2024 |
2023 |
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Turnover |
£ |
9,638,990 |
8,452,563 |
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Gross profit |
£ |
3,578,848 |
2,691,284 |
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Profit before tax |
£ |
1,133,438 |
345,875 |
Future developments
The Group continues to develop existing and new customers and market sectors with a view to longer term contracts, stability and diversification.UK political and economic strategy creates challenges to maintaining competitive pricing in both local and global markets. US political and economic strategy remains a concern although doesn’t appear to have an immediate impact on the business. The directors remain optimistic over business levels for the future, and the market diversity offers some stability whilst new longer term contracts are developed. The directors believe that the Group will continue to strengthen its position in the market and remain financially stable. With ongoing investment a priority, the Group is well placed to capitalize on market opportunities and increasing capability and capacity to suit longer term contracts and supply agreements.
Margins continue to be challenged, and current business is still demonstrating this, though the mix of new industry sectors and work type will hopefully lead to better margins in the future.
Sumac Manufacturing (Holdings) Limited
Strategic Report for the Year Ended 30 September 2024
Principal risks and uncertainties
The principal risk to the business continues to be inflation with material and labour, and with no indication of energy prices reducing, remaining competitive is an ongoing challenge. Almost all other costs continuing to increase in ongoing global insecurity. Leadtimes continue to be challenging with many customers seeing short lead times as key to their market success. Skilled labour continues to be problematic, though further investment in training and apprentices, alongside automation remains a high priority to help with offsetting this.
Upward pressure on wages and employment costs caused by UK political strategy, and ongoing business operating costs is an area of concern.
Approved by the Board on
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Sumac Manufacturing (Holdings) Limited
Directors' Report for the Year Ended 30 September 2024
The directors present their report and the consolidated financial statements for the year ended 30 September 2024.
Directors of the group
The directors who held office during the year were as follows:
Financial instruments
Objectives and policies
The Group’s principal financial instruments comprise bank balances, trade debtors, trade creditors, lease purchase finance agreements, directors’ loans and bank loans. The main purpose of these instruments is to maintain funds to finance the Group’s operations.
Price risk, credit risk, liquidity risk and cash flow risk
In respect of bank balances, the liquidity risk is managed through treasury management in respect of cash balances with the use of a deposit account and fixed term deposits as necessary. The risk associated with the bank loans is managed through fixed interest rates with the structured loan finance being used to fund capital purchases.
Trade debtors are managed by policies concerning the credit offered to customers and the regular monitoring of amounts outstanding for both time and credit limits.
Trade creditors liquidity risk is managed by ensuring sufficient funds are available to meet the amounts due.
Lease purchase finance agreement liquidity risk is managed in the same way as trade creditors above.
In respect of directors’ loans, the directors are aware of the Group’s cash working capital requirements and receive a set monthly repayment. Any repayment over and above this amount would be by agreement when finance was available without compromising the Group’s working capital requirement.
Sumac Manufacturing (Holdings) Limited
Directors' Report for the Year Ended 30 September 2024
Disclosure of information to the auditor
Each director has taken steps that they ought to have taken as a director in order to make themselves aware of any relevant audit information and to establish that the company's auditor is aware of that information. The directors confirm that there is no relevant information that they know of and of which they know the auditor is unaware.
Reappointment of auditors
The auditors Albert Goodman LLP are deemed to be reappointed under section 487(2) of the Companies Act 2006.
Future Developments
The future developments of the business are included within the strategic report.
Approved by the Board on
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Sumac Manufacturing (Holdings) Limited
Statement of Directors' Responsibilities
The directors acknowledge their responsibilities 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 group and the company and of the profit or loss of the group for that period. In preparing these financial statements, the directors are required to:
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select suitable accounting policies and apply them consistently; |
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make judgements and accounting estimates that are reasonable and prudent; |
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state whether applicable UK Accounting Standards have been followed, subject to any material departures disclosed and explained in the financial statements; and |
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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 group's and the company's transactions and disclose with reasonable accuracy at any time the financial position of the group and 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 group and the company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
Sumac Manufacturing (Holdings) Limited
Independent Auditor's Report to the Members of Sumac Manufacturing (Holdings) Limited
Opinion
We have audited the financial statements of Sumac Manufacturing (Holdings) Limited (the 'parent company') and its subsidiaries (the 'group') for the year ended 30 September 2024, which comprise the Consolidated Profit and Loss Account, Consolidated Statement of Comprehensive Income, Consolidated Balance Sheet, Balance Sheet, Consolidated Statement of Changes in Equity, Statement of Changes in Equity, Consolidated Statement of Cash Flows, and Notes to the Financial Statements, including a summary of 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 group's and the parent company's affairs as at 30 September 2024 and of the groups profit for the year then ended; |
• | have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and |
• | have been prepared in accordance with the requirements of the Companies Act 2006. |
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the auditor responsibilities for the audit of the financial statements section of our report. We are independent of the group 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 director's 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 original financial statements were 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.
Sumac Manufacturing (Holdings) Limited
Independent Auditor's Report to the Members of Sumac Manufacturing (Holdings) Limited
Other information
The directors are responsible for the other information. The other information comprises the information included in the annual report, other than the financial statements and our auditor’s report thereon. 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.
In connection with our audit of the financial statements, 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 audit or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether there is a material misstatement in the financial statements or a material misstatement of the other information. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.
We have nothing to report in this regard.
Opinion on other matter prescribed by the Companies Act 2006
In our opinion, based on the work undertaken in the course of the audit:
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the information given in the Strategic Report and Directors' Report for the financial year for which the financial statements are prepared is consistent with the financial statements; and |
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the Strategic Report and Directors' Report have been prepared in accordance with applicable legal requirements. |
In the light of our knowledge and understanding of the group and the parent company and their environment obtained in the course of the audit, we have not identified material misstatements in the Strategic Report and the Directors' Report.
Matters on which we are required to report by exception
We have nothing to report in respect of the following matters where the Companies Act 2006 requires us to report to you if, in our opinion:
• | adequate accounting records have not been kept by the parent company, or returns adequate for our audit have not been received from branches not visited by us; or |
• | the parent company financial statements are not in agreement with the accounting records and returns; or |
• | certain disclosures of directors' remuneration specified by law are not made; or |
• | we have not received all the information and explanations we require for our audit. |
Responsibilities of directors
As explained more fully in the Statement of Directors' Responsibilities set out on page 6, 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 group’s and the parent 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 group or the parent company or to cease operations, or have no realistic alternative but to do so.
Sumac Manufacturing (Holdings) Limited
Independent Auditor's Report to the Members of Sumac Manufacturing (Holdings) Limited
Auditor 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 the audit was considered capable of detecting irregularities including fraud
Our approach to identifying and assessing the risks of material misstatement in respect of irregularities, including fraud and non-compliance with laws and regulations, was as follows:
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the engagement partner ensured that the engagement team collectively had the appropriate competence, capabilities and skills to identify or recognise non-compliance with applicable laws and regulations; |
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we identified the laws and regulations applicable to the group through discussions with directors and other management, and from our commercial knowledge and experience of the manufacturing sector; |
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we focused on specific laws and regulations which we considered may have a direct material effect on the financial statements or the operations of the group, including the Companies Act 2006, taxation legislation, data protection, anti-bribery, employment and health and safety legislation; |
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we assessed the extent of compliance with the laws and regulations identified above through making enquiries of management and inspecting legal correspondence; and |
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identified laws and regulations were communicated within the audit team regularly and the team remained alert to instances of non-compliance throughout the audit. |
We assessed the susceptibility of the group’s financial statements to material misstatement, including obtaining an understanding of how fraud might occur, by:
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making enquiries of management as to where they considered there was susceptibility to fraud, their knowledge of actual, suspected and alleged fraud; and |
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considering the internal controls in place to mitigate risks of fraud and non-compliance with laws and regulations. |
To address the risk of fraud through management bias and override of controls, we:
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performed analytical procedures to identify any unusual or unexpected relationships; |
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tested journal entries to identify unusual transactions; |
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assessed whether judgements and assumptions made in determining the accounting estimates were indicative of potential bias; and |
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investigated the rationale behind significant or unusual transactions. |
Sumac Manufacturing (Holdings) Limited
Independent Auditor's Report to the Members of Sumac Manufacturing (Holdings) Limited
In response to the risk of irregularities and non-compliance with laws and regulations, we designed procedures which included, but were not limited to:
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agreeing financial statement disclosures to underlying supporting documentation; |
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enquiring of management as to actual and potential litigation and claims; and |
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reviewing correspondence with HMRC, relevant regulators and the group’s legal advisors. |
There are inherent limitations in our audit procedures described above. The more removed that laws and regulations are from financial transactions, the less likely it is that we would become aware of non-compliance. Auditing standards also limit the audit procedures required to identify non-compliance with laws and regulations to enquiry of the directors and other management and the inspection of regulatory and legal correspondence, if any.
Material misstatements that arise due to fraud can be harder to detect than those that arise from error as they may involve deliberate concealment or collusion.
A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council's website at www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor's report.
Use of our report
This report is made solely to the company’s members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 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.
For and on behalf of
Goodwood House
Blackbrook Park Avenue
Somerset
TA1 2PX
Sumac Manufacturing (Holdings) Limited
Consolidated Profit and Loss Account
for the Year Ended 30 September 2024
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Note |
2024 |
2023 |
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Turnover |
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Cost of sales |
( |
( |
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Gross profit |
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Administrative expenses |
( |
( |
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Other operating income |
- |
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Operating profit |
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Other interest receivable and similar income |
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Interest payable and similar charges |
( |
( |
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Profit before tax |
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Taxation |
( |
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Profit for the financial year |
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Profit/(loss) attributable to: |
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Owners of the company |
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Sumac Manufacturing (Holdings) Limited
Consolidated Statement of Comprehensive Income
for the Year Ended 30 September 2024
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2024 |
2023 |
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Profit for the year |
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Total comprehensive income for the year |
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Total comprehensive income attributable to: |
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Owners of the company |
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Sumac Manufacturing (Holdings) Limited
(Registration number: 12249741)
Consolidated Balance Sheet as at 30 September 2024
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Note |
2024 |
2023 |
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Fixed assets |
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Intangible assets |
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Tangible assets |
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Current assets |
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Stocks |
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Debtors |
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Cash at bank and in hand |
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Creditors: Amounts falling due within one year |
( |
( |
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Net current assets |
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Total assets less current liabilities |
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Creditors: Amounts falling due after more than one year |
( |
( |
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Provisions for liabilities |
( |
( |
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Net assets |
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Capital and reserves |
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Called up share capital |
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Share premium reserve |
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Capital redemption reserve |
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Retained earnings |
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Equity attributable to owners of the company |
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Shareholders' funds |
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Approved and authorised by the
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Sumac Manufacturing (Holdings) Limited
(Registration number: 12249741)
Balance Sheet as at 30 September 2024
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Note |
2024 |
2023 |
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Fixed assets |
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Tangible assets |
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Investments |
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Current assets |
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Debtors |
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Cash at bank and in hand |
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Creditors: Amounts falling due within one year |
( |
( |
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Net current assets |
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Net assets |
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Capital and reserves |
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Called up share capital |
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Profit and loss reserve |
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Total equity |
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As permitted by s408 Companies Act 2006, the company has not presented its own profit and loss account and related notes as it prepares group accounts. The company made a profit after tax for the financial year of £304,787.
Approved and authorised by the
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Sumac Manufacturing (Holdings) Limited
Consolidated Statement of Changes in Equity
for the Year Ended 30 September 2024
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Ordinary share capital |
Share premium |
Capital redemption reserve |
Profit and loss reserve |
Total |
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At 1 October 2023 |
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Profit for the year |
- |
- |
- |
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Dividends |
- |
- |
- |
( |
( |
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At 30 September 2024 |
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Ordinary share capital |
Share premium |
Capital redemption reserve |
Profit and loss reserve |
Total |
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At 1 October 2022 |
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Profit for the year |
- |
- |
- |
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Dividends |
- |
- |
- |
( |
( |
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New share capital subscribed |
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- |
- |
- |
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At 30 September 2023 |
10,779 |
198,731 |
100 |
5,589,854 |
5,799,464 |
Sumac Manufacturing (Holdings) Limited
Statement of Changes in Equity
for the Year Ended 30 September 2024
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Share capital |
Retained earnings |
Total |
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At 1 October 2023 |
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Profit for the year |
- |
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Dividends |
- |
( |
( |
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At 30 September 2024 |
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Share capital |
Retained earnings |
Total |
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At 1 October 2022 |
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Profit for the year |
- |
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Dividends |
- |
( |
( |
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New share capital subscribed |
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- |
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At 30 September 2023 |
10,779 |
1,889,488 |
1,900,267 |
Sumac Manufacturing (Holdings) Limited
Consolidated Statement of Cash Flows
for the Year Ended 30 September 2024
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Note |
2024 |
2023 |
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Cash flows from operating activities |
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Profit for the year |
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Adjustments to cash flows from non-cash items |
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Depreciation and amortisation |
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Loss/(profit) on disposal of tangible assets |
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( |
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Finance income |
( |
( |
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Finance costs |
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Income tax expense |
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( |
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Working capital adjustments |
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Decrease/(increase) in stocks |
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( |
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Decrease/(increase) in trade debtors |
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( |
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Decrease in trade creditors |
( |
( |
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Cash generated from operations |
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Income taxes received |
- |
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Net cash flow from operating activities |
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Cash flows from investing activities |
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Interest received |
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Acquisitions of tangible assets |
( |
( |
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Proceeds from sale of tangible assets |
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Net cash flows from investing activities |
( |
( |
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Cash flows from financing activities |
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Interest paid |
( |
( |
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Repayment of bank borrowing |
( |
( |
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Proceeds from other borrowing draw downs |
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Repayment of other borrowing |
( |
- |
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Payments to finance lease creditors |
( |
( |
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Dividends paid |
( |
( |
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Net cash flows from financing activities |
( |
( |
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Net increase in cash and cash equivalents |
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Cash and cash equivalents at 1 October |
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Cash and cash equivalents at 30 September |
2,990,330 |
1,626,366 |
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Sumac Manufacturing (Holdings) Limited
Notes to the Financial Statements
for the Year Ended 30 September 2024
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General information |
The company is a private company limited by share capital, incorporated in England and Wales.
The address of its registered office is:
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Accounting policies |
Summary of significant accounting policies and key accounting estimates
The principal accounting policies applied in the preparation of these financial statements are set out below. These policies have been consistently applied to all the years presented, unless otherwise stated.
Statement of compliance
These financial statements were prepared in accordance with Financial Reporting Standard 102 'The Financial Reporting Standard applicable in the United Kingdom and Republic of Ireland and the Companies Act 2006'.
Basis of preparation
These financial statements have been prepared using the historical cost convention except that as disclosed in the accounting policies certain items are shown at fair value.
These financial statements are presented in Sterling (£).
Basis of consolidation
The consolidated financial statements consolidate the financial statements of the company and its subsidiary undertakings drawn up to 30 September 2024.
Sumac Manufacturing (Holdings) Limited
Notes to the Financial Statements
for the Year Ended 30 September 2024
A subsidiary is an entity controlled by the company. Control is achieved where the company has the power to govern the financial and operating policies of an entity so as to obtain benefits from its activities.
The results of subsidiaries acquired or disposed of during the year are included in the Profit and Loss Account from the effective date of acquisition or up to the effective date of disposal, as appropriate. Where necessary, adjustments are made to the financial statements of subsidiaries to bring their accounting policies into line with those used by the group.
The purchase method of accounting is used to account for business combinations that result in the acquisition of subsidiaries by the group. The cost of a business combination is measured as the fair value of the assets given, equity instruments issued and liabilities incurred or assumed at the date of exchange, plus costs directly attributable to the business combination. Identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are measured initially at their fair values at the acquisition date. Any excess of the cost of the business combination over the acquirer’s interest in the net fair value of the identifiable assets, liabilities and contingent liabilities recognised is recorded as goodwill.
Inter-company transactions, balances and unrealised gains on transactions between the company and its subsidiaries, which are related parties, are eliminated in full.
Intra-group losses are also eliminated but may indicate an impairment that requires recognition in the consolidated financial statements.
Accounting policies of subsidiaries have been changed where necessary to ensure consistency with the policies adopted by the group. Non-controlling interests in the net assets of consolidated subsidiaries are identified separately from the group’s equity therein. Non-controlling interests consist of the amount of those interests at the date of the original business combination and the non-controlling shareholder’s share of changes in equity since the date of the combination.
Sumac Manufacturing (Holdings) Limited
Notes to the Financial Statements
for the Year Ended 30 September 2024
Judgements and key sources of estimation uncertainty
As described in the strategic report the Directors have made the assessment that the Group is a going concern and these financial statements are prepared on that basis. This assessment took into account the continuing impact of the cost of living crisis. The impact of both of these external events has been considered when considering turnover and supply, the working capital facilities in place and the ability to access funding if required. |
Key sources of estimation uncertainty
Provision for doubtful debts
In determining the requirement to provide for debtor balances, the group considers the age of debtor, trading status and payment terms. Each year the group reviews the above to establish if there is a requirement to provide for any debtor balances.
Net Realisable Value of Stock
Raw materials
In determining the net realisable value of raw materials, the group considers age, length of ownership, current market trends and advancements and general industry performance. Each year the group reviews the above to establish if there is any change in the expected net realisable value. At 30 September 2024 the net realisable value of raw materials was £215,229 (2023: £237,404).
Work in progress
In determining the net realisable value of raw materials, the group considers age, length of ownership, current market trends and advancements, general industry performance and correspondence with the customer. Each year the group reviews the above to establish if there is any change in the expected net realisable value. At 30 September 2024 the net realisable value of work in progress was £1,108,461 (2023: £1,379,922)
Finished goods
In determining the net realisable value of finished goods, the group considers age, length of ownership, current market trends and advancements and general industry performance. Each year the group reviews the above to establish if there is any change in the expected net realisable value of stock items. At 30 September 2024 the net realisable value of finished goods was £427,045 (2023: £418,568).
Turnover recognition
Turnover comprises the fair value of the consideration received or receivable for the sale of goods in the ordinary course of the group’s activities. Turnover is shown net of sales/value added tax, returns, rebates and discounts and after eliminating sales within the group. Turnover is recognised on dispatch of goods.
Government grants
Government grants are recognised under the accruals model resulting in income being recognised on a systematic basis over the period in which the related costs are incurred for which the grant is compensating. The income from the scheme is recognised as other operating income in the profit and loss and timing differences presented as other debtors within the balance sheet.
Sumac Manufacturing (Holdings) Limited
Notes to the Financial Statements
for the Year Ended 30 September 2024
Foreign currency transactions and balances
Exchange differences are taken into account in arriving at operating profit. Exchange differences are recognised in the profit and loss in the period in which they arise.
Non-monetary items measured in terms of historical cost in a foreign currency are not retranslated.
Tax
The tax expense for the period comprises current and deferred tax. Tax is recognised in the profit and loss account, except that a change attributable to an item of income or expense recognised as other comprehensive income is also recognised directly in other comprehensive income.
The current tax charge is calculated on the basis of tax rates and laws that have been enacted or substantively enacted by the reporting date in the countries where the group operates and generates taxable income.
Deferred tax is recognised on timing differences arising between the tax bases of assets and liabilities and their carrying amounts in the consolidated financial statements and on unused tax losses or tax credits in the group. Deferred tax is determined using tax rates and laws that have been enacted or substantively enacted by the reporting date.
The carrying amount of deferred tax assets are reviewed at each reporting date and a valuation allowance is set up against deferred tax assets so that the net carrying amount equals the highest amount that is more likely than not to be recovered based on current or future taxable profit.
Deferred tax liabilities are presented within provisions for liabilities on the balance sheet.
Goodwill
Goodwill arising on the acquisition of an entity represents the excess of the cost of acquisition over the group’s interest in the net fair value of the identifiable assets, liabilities and contingent liabilities of the entity recognised at the date of acquisition. Goodwill is initially recognised as an asset at cost and is subsequently measured at cost less accumulated amortisation and accumulated impairment losses. Goodwill is held in the currency of the acquired entity and revalued to the closing rate at each reporting period date. Goodwill is amortised over its useful life, which shall not exceed ten years if a reliable estimate of the useful life cannot be made.
Intangible assets
Separately acquired trademarks and licences are shown at historical cost.
Trademarks, licences (including software) and customer-related intangible assets acquired in a business combination are recognised at fair value at the acquisition date.
Sumac Manufacturing (Holdings) Limited
Notes to the Financial Statements
for the Year Ended 30 September 2024
Amortisation
Amortisation is provided on intangible assets so as to write off the cost, less any estimated residual value, over their useful life as follows:
|
Asset class |
Amortisation method and rate |
|
Trademarks, patents, licences |
10% straight line basis |
Tangible assets
Tangible assets are stated at cost, less accumulated depreciation and accumulated impairment losses.
The cost of tangible assets includes directly attributable incremental costs incurred in their acquisition and installation.
Depreciation
Depreciation is charged so as to write off the cost of assets, other than land and properties under construction over their estimated useful lives, as follows:
|
Asset class |
Depreciation method and rate |
|
Freehold land |
Not depreciated |
|
Freehold buildings |
50 years straight line |
|
Plant and machinery |
25% reducing balance |
|
Furniture, fittings and equipment |
20% - 33% reducing balance |
|
Motor vehicles |
25% reducing balance |
Business combinations
Business combinations are accounted for using the purchase method. The consideration for each acquisition is measured at the aggregate of the fair values at acquisition date of assets given, liabilities incurred or assumed, and equity instruments issued by the group in exchange for control of the acquired, plus any costs directly attributable to the business combination. When a business combination agreement provides for an adjustment to the cost of the combination contingent on future events, the group includes the estimated amount of that adjustment in the cost of the combination at the acquisition date if the adjustment is probable and can be measured reliably.
Investments
Investments in equity shares which are not publicly traded and where fair value cannot be measured reliably are measured at cost less impairment.
Interest income on debt securities, where applicable, is recognised in income using the effective interest method. Dividends on equity securities are recognised in income when receivable.
Stocks
Stocks are stated at the lower of cost and estimated selling price less costs to complete and sell. The cost of finished goods and work in progress comprises direct materials and, where applicable, direct labour costs and those overheads that have been incurred in bringing the inventories to their present location and condition.
At each report date, stocks are assessed for impairment. If stocks are impaired, the carrying amount is reduced to its selling price less costs to complete and sell; the impairment loss is recognised immediately in profit and loss
Sumac Manufacturing (Holdings) Limited
Notes to the Financial Statements
for the Year Ended 30 September 2024
Trade debtors
Trade debtors are amounts due from customers for merchandise sold or services performed in the ordinary course of business.
Trade debtors are recognised initially at the transaction price. They are subsequently measured at amortised cost using the effective interest method, less provision for impairment. A provision for the impairment of trade debtors is established when there is objective evidence that the group will not be able to collect all amounts due according to the original terms of the receivables.
Cash and cash equivalents
Cash and cash equivalents comprise cash on hand and call deposits, and other short-term highly liquid investments that are readily convertible to a known amount of cash and are subject to an insignificant risk of change in value.
Trade creditors
Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Trade creditors are classified as current liabilities if the group does not have an unconditional right, at the end of the reporting period, to defer settlement of the creditor for at least twelve months after the reporting date. If there is an unconditional right to defer settlement for at least twelve months after the reporting date, they are presented as non-current liabilities.
Trade creditors are recognised initially at the transaction price and subsequently measured at amortised cost using the effective interest method.
Borrowings
Interest-bearing borrowings are initially recorded at fair value, net of transaction costs. Interest-bearing borrowings are subsequently carried at amortised cost, with the difference between the proceeds, net of transaction costs, and the amount due on redemption being recognised as a charge to the Profit and Loss Account over the period of the relevant borrowing.
Interest expense is recognised on the basis of the effective interest method and is included in interest payable and similar charges.
Borrowings are classified as current liabilities unless the group has an unconditional right to defer settlement of the liability for at least twelve months after the reporting date.
Assets held under hire purchase agreements are capitalised as tangible fixed assets with the future obligation being recognised as a liability. Finance costs are recognised in the Profit and Loss Account calculated at a constant periodic rate of interest over the term of the liability.
Sumac Manufacturing (Holdings) Limited
Notes to the Financial Statements
for the Year Ended 30 September 2024
Leases
Leases in which substantially all the risks and rewards of ownership are retained by the lessor are classified as operating leases. Payments made under operating leases are charged to profit or loss on a straight-line basis over the period of the lease. Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessee.
Assets held under finance leases are recognised at the lower of their fair value at inception of the lease and the present value of the minimum lease payments. These assets are depreciated on a straight-line basis over the shorter of the useful life of the asset and the lease term. The corresponding liability to the lessor is included in the Balance Sheet as a finance lease obligation.
Lease payments are apportioned between finance costs in the Profit and Loss Account and reduction of the lease obligation so as to achieve a constant periodic rate of interest on the remaining balance of the liability.
Share capital
Ordinary shares are classified as equity. Equity instruments are measured at the fair value of the cash or other resources received or receivable, net of the direct costs of issuing the equity instruments. If payment is deferred and the time value of money is material, the initial measurement is on a present value basis.
Dividends
Dividend distribution to the group’s shareholders is recognised as a liability in the financial statements in the reporting period in which the dividends are declared.
Defined contribution pension obligation
The group operates a defined contribution plan for its employees. A defined contribution plan is a pension plan under which the group pays fixed contributions into a separate entity. Once the contributions have been paid the group has no further payments obligations.
The contributions are recognised as an expense in the profit and loss account when they fall due. Amounts not paid are shown in accruals as a liability in the balance sheet. The assets of the plan are held separately from the group in independently administered funds.
Reserves
Called up share capital represents the nominal value of shares that have been issued.
Share premium account includes any premiums received on the issue of share capital. Transaction costs associated with the issuing of shares are deducted from the share premium.
Profit and loss account includes all current and prior period profits and losses.
Capital redemption reserve records the nominal value of shares repurchased by the company.
Sumac Manufacturing (Holdings) Limited
Notes to the Financial Statements
for the Year Ended 30 September 2024
|
Turnover |
The analysis of the group's Turnover for the year from continuing operations is as follows:
|
2024 |
2023 |
|
|
Sale of goods |
|
|
The analysis of the group's Turnover for the year by market is as follows:
|
2024 |
2023 |
|
|
UK |
|
|
|
Europe |
|
|
|
Rest of world |
|
|
|
|
|
|
Other operating income |
The analysis of the group's other operating income for the year is as follows:
|
2024 |
2023 |
|
|
Miscellaneous other operating income |
- |
|
Sumac Manufacturing (Holdings) Limited
Notes to the Financial Statements
for the Year Ended 30 September 2024
|
Operating profit |
Arrived at after charging/(crediting)
|
2024 |
2023 |
|
|
Depreciation expense |
|
|
|
Foreign exchange losses |
|
|
|
Operating lease expense - plant and machinery |
|
|
|
Loss/(profit) on disposal of property, plant and equipment |
|
( |
|
Other interest receivable and similar income |
|
2024 |
2023 |
|
|
Interest income on bank deposits |
|
|
|
Interest payable and similar expenses |
|
2024 |
2023 |
|
|
Interest on bank overdrafts and borrowings |
|
|
|
Interest on obligations under finance leases and hire purchase contracts |
|
|
|
Interest expense on other finance liabilities |
|
|
|
|
|
|
Staff costs |
The aggregate payroll costs (including directors' remuneration) were as follows:
|
2024 |
2023 |
|
|
Wages and salaries |
|
|
|
Social security costs |
|
|
|
Pension costs, defined contribution scheme |
|
|
|
Other employee expense |
|
|
|
|
|
Sumac Manufacturing (Holdings) Limited
Notes to the Financial Statements
for the Year Ended 30 September 2024
The average number of persons employed by the group (including directors) during the year, analysed by category was as follows:
|
2024 |
2023 |
|
|
Production |
|
|
|
Administration and support |
|
|
|
Other departments |
|
|
|
|
|
|
Directors' remuneration |
The directors' remuneration for the year was as follows:
|
2024 |
2023 |
|
|
Remuneration |
|
|
|
Contributions paid to money purchase schemes |
|
|
|
214,283 |
238,123 |
During the year the number of directors who were receiving benefits and share incentives was as follows:
|
2024 |
2023 |
|
|
Accruing benefits under money purchase pension scheme |
|
|
In respect of the highest paid director:
|
2024 |
2023 |
|
|
Remuneration |
|
|
|
Company contributions to money purchase pension schemes |
|
|
|
Auditors' remuneration |
|
2024 |
2023 |
|
|
Audit of these financial statements |
3,150 |
3,000 |
|
Audit of the financial statements of subsidiaries of the company pursuant to legislation |
21,500 |
21,200 |
|
|
|
Sumac Manufacturing (Holdings) Limited
Notes to the Financial Statements
for the Year Ended 30 September 2024
|
Taxation |
Tax charged/(credited) in the consolidated profit and loss account
|
2024 |
2023 |
|
|
Current taxation |
||
|
UK corporation tax |
|
|
|
UK corporation tax adjustment to prior periods |
( |
( |
|
93,679 |
(249,229) |
|
|
Deferred taxation |
||
|
Arising from origination and reversal of timing differences |
|
|
|
Arising from previously unrecognised tax loss, tax credit or temporary difference of prior periods |
- |
35,859 |
|
Total deferred taxation |
|
|
|
Tax expense/(receipt) in the income statement |
|
( |
The tax on profit before tax for the year is higher than the standard rate of corporation tax in the UK (2023 - lower than the standard rate of corporation tax in the UK) of
The differences are reconciled below:
|
2024 |
2023 |
|
|
Profit before tax |
|
|
|
Corporation tax at standard rate |
|
|
|
Tax (decrease)/increase from effect of capital allowances and depreciation |
( |
|
|
Increase from effect of different UK tax rates on some earnings |
|
- |
|
Tax increase/(decrease) from other short-term timing differences |
|
( |
|
Effect of expense not deductible in determining taxable profit (tax loss) |
|
|
|
Effect of tax losses |
( |
( |
|
Deferred tax expense from unrecognised temporary difference from a prior period |
|
|
|
Tax decrease from effect of adjustment in research and development tax credit |
( |
( |
|
Total tax charge/(credit) |
|
( |
Sumac Manufacturing (Holdings) Limited
Notes to the Financial Statements
for the Year Ended 30 September 2024
|
Intangible assets |
Group
|
Goodwill |
Other intangible assets |
Total |
|
|
Cost or valuation |
|||
|
At 1 October 2023 |
|
- |
|
|
Additions acquired separately |
- |
|
|
|
At 30 September 2024 |
|
|
|
|
Amortisation |
|||
|
At 1 October 2023 |
|
- |
|
|
At 30 September 2024 |
|
- |
|
|
Carrying amount |
|||
|
At 30 September 2024 |
|
|
|
|
At 30 September 2023 |
|
|
|
Sumac Manufacturing (Holdings) Limited
Notes to the Financial Statements
for the Year Ended 30 September 2024
|
Tangible assets |
Group
|
Land and buildings |
Furniture, fittings and equipment |
Motor vehicles |
Plant and machinery |
Total |
|
|
Cost or valuation |
|||||
|
At 1 October 2023 |
|
|
|
|
|
|
Additions |
- |
|
|
|
|
|
Disposals |
- |
( |
( |
( |
( |
|
At 30 September 2024 |
|
|
|
|
|
|
Depreciation |
|||||
|
At 1 October 2023 |
|
|
|
|
|
|
Charge for the year |
|
|
|
|
|
|
Eliminated on disposal |
- |
( |
( |
( |
( |
|
At 30 September 2024 |
|
|
|
|
|
|
Carrying amount |
|||||
|
At 30 September 2024 |
|
|
|
|
|
|
At 30 September 2023 |
|
|
|
|
|
Included within the net book value of land and buildings above is £1,187,965 (2023 - £1,214,030) in respect of freehold land and buildings.
Sumac Manufacturing (Holdings) Limited
Notes to the Financial Statements
for the Year Ended 30 September 2024
Assets held under finance leases and hire purchase contracts
The net carrying amount of tangible assets includes the following amounts in respect of assets held under finance leases and hire purchase contracts:
|
2024 |
2023 |
|
|
Plant and machinery |
691,338 |
664,725 |
Restriction on title and pledged as security
Company
|
Land and buildings |
Total |
|
|
Cost or valuation |
||
|
At 1 October 2023 |
|
|
|
At 30 September 2024 |
|
|
|
Depreciation |
||
|
At 1 October 2023 |
|
|
|
Charge for the year |
|
|
|
At 30 September 2024 |
|
|
|
Carrying amount |
||
|
At 30 September 2024 |
|
|
|
At 30 September 2023 |
|
|
Included within the net book value of land and buildings above is £1,187,965 (2023 - £1,214,030) in respect of freehold land and buildings.
Restriction on title and pledged as security
.
Sumac Manufacturing (Holdings) Limited
Notes to the Financial Statements
for the Year Ended 30 September 2024
|
Investments |
Company
|
2024 |
2023 |
|
|
Investments in subsidiaries |
|
|
|
Subsidiaries |
£ |
|
Cost or valuation |
|
|
At 1 October 2023 |
|
|
Carrying amount |
|
|
At 30 September 2024 |
|
|
At 30 September 2023 |
|
Details of undertakings
Details of the investments (including principal place of business of unincorporated entities) in which the company holds 20% or more of the nominal value of any class of share capital are as follows:
|
Undertaking |
Registered office |
Holding |
Proportion of voting rights and shares held |
|
|
2024 |
2023 |
|||
|
Subsidiary undertakings |
||||
|
|
26 Cambridge Road, Granby Industrial Estate, Weymouth, Dorset, DT4 9TJ |
Ordinary |
|
|
|
England & Wales |
||||
|
Subsidiary undertakings |
|
Sumac Precision Engineering Limited The principal activity of Sumac Precision Engineering Limited is |
Sumac Manufacturing (Holdings) Limited
Notes to the Financial Statements
for the Year Ended 30 September 2024
|
Stocks |
|
Group |
Company |
|||
|
2024 |
2023 |
2024 |
2023 |
|
|
Raw materials and consumables |
|
|
- |
- |
|
Work in progress |
|
|
- |
- |
|
Finished goods and goods for resale |
|
|
- |
- |
|
|
|
- |
- |
|
|
Debtors |
|
Group |
Company |
||||
|
Current |
Note |
2024 |
2023 |
2024 |
2023 |
|
Trade debtors |
|
|
- |
- |
|
|
Amounts owed by related parties |
- |
- |
|
|
|
|
Other debtors |
- |
|
- |
- |
|
|
Called up share capital not paid |
|
|
|
|
|
|
Prepayments |
|
|
- |
- |
|
|
Accrued income |
- |
|
- |
- |
|
|
|
|
|
|
||
|
Cash and cash equivalents |
|
Group |
Company |
|||
|
2024 |
2023 |
2024 |
2023 |
|
|
Cash on hand |
- |
|
- |
- |
|
Cash at bank |
|
|
|
|
|
Short-term deposits |
|
|
- |
- |
|
|
|
|
|
|
Sumac Manufacturing (Holdings) Limited
Notes to the Financial Statements
for the Year Ended 30 September 2024
|
Creditors |
|
Group |
Company |
||||
|
Note |
2024 |
2023 |
2024 |
2023 |
|
|
Due within one year |
|||||
|
Loans and borrowings |
|
|
- |
- |
|
|
Trade creditors |
|
|
- |
|
|
|
Social security and other taxes |
|
|
|
|
|
|
Outstanding defined contribution pension costs |
|
|
- |
- |
|
|
Other creditors |
|
|
|
|
|
|
Accrued expenses |
|
|
|
|
|
|
Corporation tax |
171,058 |
70,208 |
7,609 |
6,793 |
|
|
|
|
|
|
||
|
Due after one year |
|||||
|
Loans and borrowings |
|
|
- |
- |
|
|
Provisions for liabilities |
Group
|
Deferred tax |
Total |
|
|
At 1 October 2023 |
|
|
|
Additional provisions |
|
|
|
At 30 September 2024 |
|
|
|
|
||
Deferred tax
Group
Deferred tax assets and liabilities
|
2024 |
Asset |
Liability |
|
Capital allowances in excess of depreciation |
- |
|
|
Short term timing differences |
- |
|
|
- |
|
|
2023 |
Asset |
Liability |
|
Capital allowances in excess of depreciation |
- |
|
|
Short term timing differences |
|
- |
|
|
|
Sumac Manufacturing (Holdings) Limited
Notes to the Financial Statements
for the Year Ended 30 September 2024
|
Pension and other schemes |
Defined contribution pension scheme
The group operates a defined contribution pension scheme. The pension cost charge for the year represents contributions payable by the group to the scheme and amounted to £
Contributions totalling £
|
Share capital |
Allotted, called up and fully paid shares
|
2024 |
2023 |
|||
|
No. |
£ |
No. |
£ |
|
|
|
|
10,779 |
|
10,779 |
Rights, preferences and restrictions
|
Ordinary shares have the following rights, preferences and restrictions: |
|
Loans and borrowings |
Current loans and borrowings
|
Group |
Company |
|||
|
2024 |
2023 |
2024 |
2023 |
|
|
Bank borrowings |
|
|
- |
- |
|
Hire purchase contracts |
|
|
- |
- |
|
Other borrowings |
|
|
- |
- |
|
|
|
- |
- |
|
Non-current loans and borrowings
|
Group |
Company |
|||
|
2024 |
2023 |
2024 |
2023 |
|
|
Bank borrowings |
|
|
- |
- |
|
Hire purchase contracts |
|
|
- |
- |
|
|
|
- |
- |
|
Sumac Manufacturing (Holdings) Limited
Notes to the Financial Statements
for the Year Ended 30 September 2024
Bank borrowings
Bank loan 1 is denominated in GBP with a nominal interest rate of 4.43%, and the final instalment was due on 19 December 2023. The carrying amount at year end is £Nil (2023 - £15,384).
The loan is secured with first legal charges over the freehold property 1 and 2 Albany Court and land lying to the north of Albany Road, Weymouth. There is also an unlimited debenture from Sumac Precision Engineering Limited.
Bank loan 2 is denominated in GBP with a nominal interest rate of 2.9%, and the final instalment is due on 2 February 2027. The carrying amount at year end is £61,509 (2023 - £85,837).
The loan is secured with first legal charges over the freehold property 1 and 2 Albany Court and 28 Cambridge Road, Weymouth, and an unlimited debenture from Sumac Precision Engineering Limited.
Other borrowings
Hire purchase contracts are denominated in GBP with a nominal interest rate of 3-6%. The carrying amount at the year end is £691,436 (2023 - £696,658). The liabilities are secured on the plant and machinery assets to which the obligations relate.
|
Obligations under leases and hire purchase contracts |
Group
Operating leases
The total of future minimum lease payments is as follows:
|
2024 |
2023 |
|
|
Not later than one year |
|
|
|
Later than one year and not later than five years |
|
|
|
|
|
The amount of non-cancellable operating lease payments recognised as an expense during the year was £
|
Dividends |
Interim dividends paid
|
2024 |
2023 |
|||
|
Interim dividends paid during the year |
|
|
||
Sumac Manufacturing (Holdings) Limited
Notes to the Financial Statements
for the Year Ended 30 September 2024
|
Analysis of changes in net debt |
Group
|
At 1 October 2023 |
Financing cash flows |
At 30 September 2024 |
|
|
Cash and cash equivalents |
|||
|
Cash |
1,626,336 |
1,363,964 |
2,990,300 |
|
Borrowings |
|||
|
Long term borrowings |
(62,915) |
25,580 |
(37,335) |
|
Short term borrowings |
(38,306) |
14,132 |
(24,174) |
|
Lease liabilities |
(696,658) |
5,222 |
(691,436) |
|
(797,879) |
44,934 |
(752,945) |
|
|
|
|||
|
|
|
|
|
|
Related party transactions |
Group
|
Transactions with directors |
Summary of transactions with subsidiaries
Summary of transactions with other related parties
The group maintains loan accounts with its shareholders which pays interest at a rate of 5%. At the year end £161,447 (2023: £288,015) was due to the shareholders and interest payable to them of £3,244 (2023: £6,799).
Company
Summary of transactions with subsidiaries