CMS Cepcor Limited - Limited company accounts 18.2

REGISTERED NUMBER: 02390549 (England and Wales)

CMS CEPCOR LIMITED

STRATEGIC REPORT,

REPORT OF THE DIRECTORS AND

FINANCIAL STATEMENTS

FOR THE YEAR ENDED 30 APRIL 2019

Page

Company Information

1

Strategic Report

2

to

3

Report of the Directors

4

to

5

Report of the Independent Auditors

6

to

7

Income Statement

8

Other Comprehensive Income

9

Statement of Financial Position

10

Statement of Changes in Equity

11

Notes to the Financial Statements

12

to

22

DIRECTORS:

D I Sydenham

Mrs E H Sydenham

M T Weare

C I Sydenham

L R J Hodges

J L Shelley

SECRETARY:

Mrs E H Sydenham

REGISTERED OFFICE:

1 Vulcan Way

Coalville

Leicestershire

LE67 3AP

REGISTERED NUMBER:

02390549 (England and Wales)

SENIOR STATUTORY AUDITOR:

Michael Argyle BSc ACA

AUDITORS:

Duncan & Toplis Limited, statutory auditor

26 Park Road

Melton Mowbray

Leicestershire

LE13 1TT

The directors present their strategic report for the year ended 30 April 2019.

REVIEW OF BUSINESS

The results for the year and financial position of the company are shown in the annexed documents.

The directors aim to present a balanced and comprehensive review of the development and performance of the

business during the year and its position at year end.

The company continues to supply crusher spares, repair services and machinery to the quarrying, mining and recycling

industries in the UK and a wide range of export markets. Customers continue to be the main UK quarry companies,

worldwide mining companies, international contractors and a wide range of independent trading businesses both in

the UK and overseas. In addition the company is developing the precision manufacturing services for other industries

which complement the industries in which the company already operates.

Despite continued challenging economic conditions in a number of core markets sales turnover increased by for the

year by 14.75% to £38,154,888. Based on market conditions this was considered an excellent trading performance by

the directors.

The company's profit after tax increased to £5,484,763. This figure, after deduction of dividends, has been added to

company reserves.

In April 2019 the company received The Queen's Award for Enterprise: International Trade 2019, for outstanding

growth in overseas sales over the last three years. This is the second time the company has received this award and

further recognition of continued growth and success in export markets.

To support further growth additional premises have been secured which will become the Global Parts Centre for the

company. After the transfer of stock to the new premises this will allow the expansion of manufacturing, workshop

and engineering operations. Further capital investment is planned in new CNC machine tools. Further recruitment is

planned in all areas of the business.

Continued investment in export markets and development of new export territories remains a core focus for the

business along with research in development of specialist products and increasing product ranges.

The business maintained Lloyds Register ISO accreditations for Health and Safety (ISO 18001), Environment (ISO14001)

and manufacturing ISO9001 during this financial year. These internationally recognised Standards demonstrate the

company's ongoing commitment for quality products, customer service and sustainable operation. These

accreditations coupled with the established reputation of the business worldwide for quality and service mean the

business is well placed to trade successfully in a highly competitive market.

The company's financial strength grows yearly and the directors have a clear plan for further business development.

PRINCIPAL RISKS AND UNCERTAINTIES

Pricing

The company's exposure to increases in prices of raw materials is managed by a regular review of raw material costs,

market conditions and sales prices.

Foreign exchange

The company's exposure to foreign exchange is mitigated through purchasing and selling in overseas currencies. This

provides a natural hedge to protect the company against significant exchange movements.

ON BEHALF OF THE BOARD:

M T Weare - Director

2 September 2019

The directors present their report with the financial statements of the company for the year ended 30 April 2019.

PRINCIPAL ACTIVITY

The principal activity of the company in the year under review was that of the supply of spare parts for crushing

machinery used in the quarrying, mining and recycling industries.

DIVIDENDS

Interim dividends per share were paid as follows:

250

- 14 May 2018

200

- 10 August 2018

1209.112

- 12 November 2018

750

- 4 January 2019

700

- 2 April 2019

3159.112

The directors recommend that no final dividend be paid.

The total distribution of dividends for the year ended 30 April 2019 will be £ 3,159,112 .

EVENTS SINCE THE END OF THE YEAR

Information relating to events since the end of the year is given in the notes to the financial statements.

DIRECTORS

The directors shown below have held office during the whole of the period from 1 May 2018 to the date of this report.

D I Sydenham

Mrs E H Sydenham

M T Weare

C I Sydenham

L R J Hodges

J L Shelley

STATEMENT OF DIRECTORS' RESPONSIBILITIES

The directors are responsible for preparing the Strategic Report, the Report of the Directors and the financial

statements in accordance with applicable law and regulations.

Company law requires the directors to prepare financial statements for each financial year. Under that law the

directors have elected to prepare the financial statements in accordance with United Kingdom Generally Accepted

Accounting Practice (United Kingdom Accounting Standards and applicable law). Under company law the directors

must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of

affairs of the company and of the profit or loss of the company for that period. In preparing these financial

statements, the directors are required to:

-	select suitable accounting policies and then apply them consistently;

-	make judgements and accounting estimates that are reasonable and prudent;

-	prepare the financial statements on the going concern basis unless it is inappropriate to presume that the company will continue in business.

The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the

company's transactions and disclose with reasonable accuracy at any time the financial position of the company and

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

for safeguarding the assets of the company and hence for taking reasonable steps for the prevention and detection of

fraud and other irregularities.

STATEMENT AS TO DISCLOSURE OF INFORMATION TO AUDITORS

So far as the directors are aware, there is no relevant audit information (as defined by Section 418 of the Companies

Act 2006) of which the company's auditors are unaware, and each director has taken all the steps that he or she ought

to have taken as a director in order to make himself or herself aware of any relevant audit information and to

establish that the company's auditors are aware of that information.

ON BEHALF OF THE BOARD:

M T Weare - Director

2 September 2019

Opinion

We have audited the financial statements of CMS Cepcor Limited (the 'company') for the year ended 30 April 2019

which comprise the Income Statement, Other Comprehensive Income, Statement of Financial Position, Statement of

Changes in Equity 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 company's affairs as at 30 April 2019 and of its profit for the year then ended;

-	have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and

-	have been prepared in accordance with the requirements of the Companies Act 2006.

Basis for opinion

We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law.

Our responsibilities under those standards are further described in the Auditors' responsibilities for the audit of the

financial statements section of our report. We are independent of the company in accordance with the ethical

requirements that are relevant to our audit of the financial statements in the 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

We have nothing to report in respect of the following matters in relation to which the ISAs (UK) require us to report to

you where:

-	the directors' use of the going concern basis of accounting in the preparation of the financial statements is not appropriate; or

-

the directors have not disclosed in the financial statements any identified material uncertainties that may cast significant doubt about the company's ability to continue to adopt the going concern basis of accounting for a period of at least twelve months from the date when the financial statements are authorised for issue.

Other information

The directors are responsible for the other information. The other information comprises the information in the

Strategic Report and the Report of the Directors, but does not include the financial statements and our Report of the

Auditors 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.

Opinions on other matters prescribed by the Companies Act 2006

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

-	the information given in the Strategic Report and the Report of the Directors for the financial year for which the financial statements are prepared is consistent with the financial statements; and

-	the Strategic Report and the Report of the Directors have been prepared in accordance with applicable legal requirements.

Matters on which we are required to report by exception

In the light of the knowledge and understanding of the company and its environment obtained in the course of the

audit, we have not identified material misstatements in the Strategic Report or the Report of the Directors.

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, or returns adequate for our audit have not been received from branches not visited by us; or

-	the financial statements are not in agreement with the accounting records and returns; or

-	certain disclosures of directors' remuneration specified by law are not made; or

-	we have not received all the information and explanations we require for our audit.

Responsibilities of directors

As explained more fully in the Statement of Directors' Responsibilities set out on page four, 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 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.

Auditors' responsibilities for the audit of the financial statements

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from

material misstatement, whether due to fraud or error, and to issue a Report of the Auditors that includes our opinion.

Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with

ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and

are considered material if, individually or in the aggregate, they could reasonably be expected to influence the

economic decisions of users taken on the basis of these financial statements.

A further description of our responsibilities 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 Report of

the Auditors.

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 a Report of the Auditors 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.

Michael Argyle BSc ACA (Senior Statutory Auditor)

for and on behalf of Duncan & Toplis Limited, statutory auditor

26 Park Road

Melton Mowbray

Leicestershire

LE13 1TT

2 September 2019

REVENUE

3

38,154,888

33,249,364

Cost of sales

25,191,886

22,075,981

GROSS PROFIT

12,963,002

11,173,383

Distribution costs

790,864

673,810

Administrative expenses

5,500,110

4,260,357

6,290,974

4,934,167

6,672,028

6,239,216

Other operating income

40,000

-

OPERATING PROFIT

6

6,712,028

6,239,216

Interest receivable and similar income

29,360

-

6,741,388

6,239,216

Interest payable and similar expenses

7

2,184

6,618

PROFIT BEFORE TAXATION

6,739,204

6,232,598

Tax on profit

8

1,254,441

1,004,794

PROFIT FOR THE FINANCIAL YEAR

5,484,763

5,227,804

PROFIT FOR THE YEAR

5,484,763

5,227,804

OTHER COMPREHENSIVE INCOME

-

-

TOTAL COMPREHENSIVE INCOME FOR THE YEAR

5,484,763

5,227,804

FIXED ASSETS

Property, plant and equipment

10

2,432,223

2,259,101

Investments

11

2

2

2,432,225

2,259,103

CURRENT ASSETS

Inventories

12

12,450,196

9,857,389

Debtors

13

8,577,440

7,620,916

Cash at bank and in hand

3,652,696

4,464,170

24,680,332

21,942,475

CREDITORS

Amounts falling due within one year

14

4,733,237

4,333,496

NET CURRENT ASSETS

19,947,095

17,608,979

TOTAL ASSETS LESS CURRENT LIABILITIES

22,379,320

19,868,082

CREDITORS

Amounts falling due after more than one year

15

(151,703

)

(15,470

)

PROVISIONS FOR LIABILITIES

18

(68,177

)

(18,823

)

NET ASSETS

22,159,440

19,833,789

CAPITAL AND RESERVES

Called up share capital

19

1,000

1,000

Retained earnings

22,158,440

19,832,789

SHAREHOLDERS' FUNDS

22,159,440

19,833,789

The financial statements were approved by the Board of Directors on 2 September 2019 and were signed on its behalf by:

D I Sydenham - Director

Mrs E H Sydenham - Director

Called up

share

Retained

Total

capital

earnings

equity

£

£

£

Balance at 1 May 2017

1,000

21,555,391

21,556,391

Changes in equity

Dividends

-

(6,950,406

)

(6,950,406

)

Total comprehensive income

-

5,227,804

5,227,804

Balance at 30 April 2018

1,000

19,832,789

19,833,789

Changes in equity

Dividends

-

(3,159,112

)

(3,159,112

)

Total comprehensive income

-

5,484,763

5,484,763

Balance at 30 April 2019

1,000

22,158,440

22,159,440

1.	STATUTORY INFORMATION

CMS Cepcor Limited is a private company, limited by shares , registered in England and Wales. The company's

registered number and registered office address can be found on the Company Information page.

The presentation currency of the financial statements is the Pound Sterling (£).

2.	ACCOUNTING POLICIES

Basis of preparing the financial statements

These financial statements have been prepared in accordance with Financial Reporting Standard 102 "The Financial Reporting Standard applicable in the UK and Republic of Ireland" and the Companies Act 2006. The financial statements have been prepared under the historical cost convention.

Financial Reporting Standard 102 - reduced disclosure exemptions

The company has taken advantage of the following disclosure exemptions in preparing these financial

statements, as permitted by FRS 102 "The Financial Reporting Standard applicable in the UK and Republic of

Ireland":

•

the requirements of Section 7 Statement of Cash Flows;

•

the requirements of Section 11 Financial Instruments paragraphs 11.41(b), 11.41(c), 11.41(e), 11.41(f), 11.42, 11.44, 11.45, 11.47, 11.48(a)(iii), 11.48(a)(iv), 11.48(b) and 11.48(c);

•

the requirements of Section 12 Other Financial Instruments paragraphs 12.26, 12.27, 12.29(a), 12.29(b) and 12.29A;

•

the requirement of Section 33 Related Party Disclosures paragraph 33.7.

The company is a subsidiary of CMS Cepcor (Holdings) Limited. Consolidated financial statements of CMS

Cepcor (Holdings) Limited can be obtained from:

Companies House

Crown Way

Cardiff

CF14 3UZ

Preparation of consolidated financial statements

Group accounts have not been prepared as all the subsidiaries are dormant and therefore their consolidation

into group accounts would not be material for the purposes of giving a true and fair view.

Related party exemption

The company has taken advantage of exemption, under the terms of Financial Reporting Standard 102 'The

Financial Reporting Standard applicable in the UK and Republic of Ireland', not to disclose related party

transactions with wholly owned subsidiaries within the group.

Significant judgements and estimates

In the application of the Company's accounting policies, management is required to make judgements,

estimates and assumptions about the carrying value of assets and liabilities that are not readily apparent from

other sources. The estimates and underlying 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 if the revision affects only that period,

or in the period of the revision and future periods if the revision affects both current and future periods.

The key sources of estimation uncertainty that have a significant effect on the amounts recognised in the

financial statements are described below.

(i) Stock provision

The company supplies spare parts for crushing machinery used in the quarrying, mining and recycling

industries, and is subject to changing consumer demands and economic trends. As a result it is necessary to

consider the recoverability of the cost of stock and the associated provisioning required. Stocks are stated

after provisions for impairment of £1,418,794 (2018 - 1,301,997). When calculating the stock provision,

management considers the age of the stock, in particular any items that have been non-moving for the last

two years, as well as applying assumptions around anticipated saleability.

Revenue

Revenue represents net invoiced sales of goods, excluding value added tax. Revenue is recognised upon

despatch of goods.

Property, plant and equipment

Depreciation is provided at the following annual rates in order to write off each asset over its estimated useful life or, if held under a finance lease, over the lease term, whichever is the shorter.

Fixtures, fittings and equipment

-

25% on cost, 15% on cost, 12.5% on cost and 10% on cost

Motor vehicles

-

25% on cost

Investments in subsidiaries

Investments in subsidiary undertakings are recognised at cost less impairment.

Inventories

Inventories are stated at the lower of cost and fair value less costs to complete and sell, after making due

allowance for obsolete and slow moving items. Inventories are accounted for on a first-in-first-out basis.

Taxation

Taxation for the year comprises current and deferred tax. Tax is recognised in the Income Statement, except to

the extent that it relates to items recognised in other comprehensive income or directly in equity.

Current or deferred taxation assets and liabilities are not discounted.

Current tax is recognised at the amount of tax payable using the tax rates and laws that have been enacted or

substantively enacted by the statement of financial position date.

Deferred tax

Deferred tax is recognised in respect of all timing differences that have originated but not reversed at the

statement of financial position date.

Timing differences arise from the inclusion of income and expenses in tax assessments in periods different

from those in which they are recognised in financial statements. Deferred tax is measured using tax rates and

laws that have been enacted or substantively enacted by the year end and that are expected to apply to the

reversal of the timing difference.

Unrelieved tax losses and other deferred tax assets are recognised only to the extent that it is probable that

they will be recovered against the reversal of deferred tax liabilities or other future taxable profits.

Foreign currencies

Assets and liabilities in foreign currencies are translated into sterling at the rates of exchange ruling at the

financial reporting date. Transactions in foreign currencies are translated into sterling at the rate of exchange

ruling at the date of transaction. Exchange differences are taken into account in arriving at the operating

result.

Hire purchase and leasing commitments

Assets obtained under hire purchase contracts or finance leases are capitalised in the statement of financial

position. Those held under hire purchase contracts are depreciated over their estimated useful lives. Those

held under finance leases are depreciated over their useful lives or the lease term, whichever is the shorter.

The interest element of these obligations is charged to profit or loss over the relevant period. The capital

element of the future payments is treated as a liability.

Rentals paid under operating leases are charged to profit or loss on a straight line basis over the period of the

lease.

Pension costs and other post-retirement benefits

The company operates a defined contribution pension scheme. Contributions payable to the company's

pension scheme are charged to profit or loss in the period to which they relate.

Financial instruments

The company has chosen to adopt the Sections 11 and 12 of FRS 102 in respect of financial instruments.

Basic financial assets, including trade and other debtors and cash and bank balances are initially recognised at

transaction price, 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.

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

evidence of impairment. If an asset is impaired the impairment loss is the difference between the carrying

amount and the present value of the estimated cash flows discounted at the asset's original effective interest

rate. The impairment loss is recognised in profit or loss.

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 the income

statement, except that investments in equity instruments that are not publically traded and whose fair values

cannot be measured reliably are measured at cost less impairment.

Financial assets are derecognised when (a) the contractual rights to the cash flows from the asset expire or are

settled, or (b) substantially all the risks and rewards of the ownership of the asset are transferred to another

party or (c) control of the asset has been transferred to another party who has the practical ability to

unilaterally sell the asset to an unrelated third party without imposing additional restrictions.

Basic financial liabilities, including trade and other 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 receipts discounted at a market rate of interest.

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. Accounts 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.

3.

REVENUE

The revenue and profit before taxation are attributable to the one principal activity of the company.

An analysis of revenue by geographical market is given below:

2019

2018

£

£

United Kingdom

10,959,455

9,092,643

Outside of United Kingdom

27,195,433

24,156,721

38,154,888

33,249,364

4.	EMPLOYEES AND DIRECTORS

2019

2018

£

£

Wages and salaries

3,983,530

3,361,316

Social security costs

443,855

384,180

Other pension costs

185,678

191,023

4,613,063

3,936,519

The average number of employees during the year was as follows:

2019

2018

Administration

43

41

Production

47

39

90

80

5.	DIRECTORS' EMOLUMENTS

2019

2018

£

£

Directors' remuneration

741,639

419,058

Directors' pension contributions to money purchase schemes

62,201

40,680

The number of directors to whom retirement benefits were accruing was as follows:

Money purchase schemes

6

4

Information regarding the highest paid director is as follows:

2019

2018

£

£

Emoluments etc

216,573

179,148

Pension contributions to money purchase schemes

8,514

7,920

6.	OPERATING PROFIT

The operating profit is stated after charging/(crediting):

2019

2018

£

£

Hire of plant and machinery

4,518

4,518

Other operating leases

108,929

100,194

Depreciation - owned assets

707,578

793,020

Depreciation - assets on hire purchase contracts

33,189

17,735

Profit on disposal of fixed assets

(87,590

)

(7,909

)

Auditors' remuneration

15,450

15,000

Directors' pension contributions

62,201

40,680

Foreign exchange (gains)/losses

(155,595

)

114,079

7.

INTEREST PAYABLE AND SIMILAR EXPENSES

2019

2018

£

£

Bank interest

545

3,521

Interest on overdue tax

-

1,604

Hire purchase interest

1,639

1,493

2,184

6,618

8.

TAXATION

Analysis of the tax charge

The tax charge on the profit for the year was as follows:

2019

2018

£

£

Current tax:

UK corporation tax

1,244,436

1,215,015

Adjustment re previous years

(39,349

)

(16,484

)

Total current tax

1,205,087

1,198,531

Deferred tax

49,354

(193,737

)

Tax on profit

1,254,441

1,004,794

Reconciliation of total tax charge included in profit and loss

The tax assessed for the year is lower than the standard rate of corporation tax in the UK. The difference is

explained below:

2019

2018

£

£

Profit before tax

6,739,204

6,232,598

Profit multiplied by the standard rate of corporation tax in the UK of 19% (2018 - 19%)

1,280,449

1,184,194

Effects of:

Expenses not deductible for tax purposes

9,137

6,019

Capital allowances in excess of depreciation

(45,068

)

-

Depreciation in excess of capital allowances

-

27,525

Adjustments to tax charge in respect of previous periods

(39,349

)

(16,484

)

Adjustment in respect of expensive leased cars

1,484

1,593

Movement in deferred tax provision

49,354

(193,737

)

Allowable expenditure

(1,566

)

(4,316

)

Total tax charge

1,254,441

1,004,794