Advanced Engineering Techniques Limited - Limited company accounts 20.1

REGISTERED NUMBER: 02427380 (England and Wales)

Strategic Report, Report of the Directors and

Financial Statements for the Year Ended 31 October 2020

for

Advanced Engineering Techniques Limited

Page

Company Information

1

Strategic Report

2

Report of the Directors

4

Independent Auditors' Report

6

Statement of Comprehensive Income

8

Statement of Financial Position

9

Statement of Changes in Equity

10

Statement of Cash Flows

11

Notes to the Statement of Cash Flows

12

Notes to the Financial Statements

14

DIRECTORS:

Mr D Birch

Mr R Copeland

Mrs E Spencer

Mrs A M Copeland

Mr S Woollen

Mr A J Richards

REGISTERED OFFICE:

Marland House

13 Huddersfield Road

Barnsley

South Yorkshire

S70 2LW

BUSINESS ADDRESS:

9 - 15 Holbrook Avenue

Holbrook Industrial Estate

Holbrook

Sheffield

South Yorkshire

S20 3FF

REGISTERED NUMBER:

02427380 (England and Wales)

AUDITORS:

Harris & Co Limited

Chartered Accountants & Statutory Auditor

Marland House

13 Huddersfield Road

Barnsley

South Yorkshire

S70 2LW

The directors present their strategic report for the year ended 31 October 2020.

REVIEW OF BUSINESS

The directors aim to present a balanced and comprehensive review of the development and performance of our business during the year and its position at the year-end. Our review is consistent with the size and non-complex nature of our business and is written in the context of the risks and uncertainties we face.

Turnover decreased by £4,224k (30.5%), and the gross profit percentage decreased to 6.2% (2019: 14.2%). Administrative expenses decreased by £192k (11%) which, taken with the decrease in gross profit, resulted in the company recording a loss before tax of £326k (2019: profit before tax of £75k).

This reduction in turnover and resulting loss reflects the impact of the global COVID-19 pandemic which has hugely impacted the UK and caused enormous disruption across the whole society, economy and businesses in all sectors, including the manufacturing industry.

The impact of the pandemic, in conjunction with the United Kingdom's departure from the EU on 1 January 2021 and the related trade agreement are constantly monitored by the directors in order for the related risks to be managed swiftly and effectively.

Not withstanding the loss for the year, the Company is financially secure. The Company's financial projections indicate that it has sufficient facilities and funds to operate for at least the next 12 months and its bankers continue to be supportive. Accordingly, whilst the COVID-19 situation remains unpredictable, the directors have a reasonable expectation that the company has adequate financial resources to continue in operational existence for the foreseeable future and so the financial statements are prepared on a going concern basis.

PRINCIPAL RISKS AND UNCERTAINTIES

COVID-19 - As described in the development and performance review above, the global COVID-19 pandemic has caused significant disruption globally, and in the UK, including in our own manufacturing industry. Whilst the success of the UK vaccination programme has enabled the removal of most UK societal restrictions, uncertainty is likely to continue for the foreseeable future.

Price risk - The company has no exposure to equity securities price risk as it holds no listed or other equity investments.

Credit risk - The company has implemented policies that require appropriate credit checks on potential customers before credit sales are made.

Liquidity risk - The company actively maintains a mixture of long-term and short term debt and in particular bank overdraft and invoice discounting finance that is designed to ensure that the company has sufficient available funds for its operations.

Interest rate cashflow risk - The company has interest bearing liabilities by way of bank loans and overdrafts, and therefore is exposed to interest rate cashflow risk. The board of directors regularly review the level and mix of debt to manage interest rate risk.

Foreign currency exchange risk - Where the company has transactions denominated in foreign currency and so is exposed to exchange rate risk, it manages this risk by keeping under review the need for forward contracts in the appropriate foreign currency as required.

Key performance indicators - We consider that our key performance indicators are those that communicate the financial performance and strength of the group as a whole, these being turnover and gross margin.

ON BEHALF OF THE BOARD:

Mr D Birch - Director

21 October 2021

The directors present their report with the financial statements of the Company for the year ended 31 October 2020.

PRINCIPAL ACTIVITY

The principal activity of the Company in the year under review was that of laser engineers, component producers and fabricators.

DIVIDENDS

The total distribution of dividends for the year ended 31 October 2020 was £120,192.

DIRECTORS

The directors shown below have held office during the whole of the period from 1 November 2019 to the date of this report.

Mr D Birch

Mr R Copeland

Mrs E Spencer

Mrs A M Copeland

Mr S Woollen

Mr A J Richards

DISCLOSURE IN THE STRATEGIC REPORT

The company has chosen in accordance with section 414C(11) of the Companies Act 2006 (Strategic Report and Directors' Report) Regulations 2013 to set out in the company's strategic report information required by schedule 7 of the Large and Medium-sized Companies and Groups (Accounts and Reports) Regulations 2008.

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.

AUDITORS

The auditors, Harris & Co Limited, will be proposed for re-appointment at the forthcoming Annual General Meeting.

ON BEHALF OF THE BOARD:

Mr D Birch - Director

21 October 2021

Opinion

We have audited the financial statements of Advanced Engineering Techniques Limited (the 'Company') for the year ended 31 October 2020 which comprise the Statement of Comprehensive Income, Statement of Financial Position, Statement of Changes in Equity, Statement of Cash Flows and Notes to the Statement of Cash Flows, 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 31 October 2020 and of its loss 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 Auditors' 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.

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

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

Use of our report

This report is made solely to the Company's members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 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 Auditors' Report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the Company and the Company's members as a body, for our audit work, for this report, or for the opinions we have formed.

Paul Hinchliffe BA FCA (Senior Statutory Auditor)

for and on behalf of Harris & Co Limited

Chartered Accountants & Statutory Auditor

Marland House

13 Huddersfield Road

Barnsley

South Yorkshire

S70 2LW

21 October 2021

TURNOVER

9,619,552

13,843,953

Cost of sales

9,027,448

11,866,762

GROSS PROFIT

592,104

1,977,191

Administrative expenses

1,622,464

1,814,520

(1,030,360

)

162,671

Other operating income

4

802,005

31,922

OPERATING (LOSS)/PROFIT

6

(228,355

)

194,593

Interest payable and similar expenses

7

97,909

119,952

(LOSS)/PROFIT BEFORE TAXATION

(326,264

)

74,641

Tax on (loss)/profit

8

(89,509

)

55,502

(LOSS)/PROFIT FOR THE FINANCIAL YEAR

(236,755

)

19,139

OTHER COMPREHENSIVE INCOME

-

-

TOTAL COMPREHENSIVE INCOME FOR THE YEAR

(236,755

)

19,139

FIXED ASSETS

Intangible assets

10

1,496

-

Tangible assets

11

3,151,784

3,430,425

3,153,280

3,430,425

CURRENT ASSETS

Stocks

12

1,421,167

1,273,341

Debtors

13

3,128,020

3,288,245

Cash at bank and in hand

311

37,257

4,549,498

4,598,843

CREDITORS

Amounts falling due within one year

14

5,557,239

5,569,771

NET CURRENT LIABILITIES

(1,007,741

)

(970,928

)

TOTAL ASSETS LESS CURRENT LIABILITIES

2,145,539

2,459,497

CREDITORS

Amounts falling due after more than one year

15

(611,796

)

(524,926

)

PROVISIONS FOR LIABILITIES

20

(232,281

)

(276,162

)

NET ASSETS

1,301,462

1,658,409

CAPITAL AND RESERVES

Called up share capital

21

75

75

Capital redemption reserve

22

25

25

Retained earnings

22

1,301,362

1,658,309

SHAREHOLDERS' FUNDS

1,301,462

1,658,409

The financial statements were approved by the Board of Directors and authorised for issue on 21 October 2021 and were signed on its behalf by:

Mr D Birch - Director

Called up

Capital

share

Retained

redemption

Total

capital

earnings

reserve

equity

£

£

£

£

Balance at 1 November 2018

75

1,819,170

25

1,819,270

Changes in equity

Dividends

-

(180,000

)

-

(180,000

)

Total comprehensive income

-

19,139

-

19,139

Balance at 31 October 2019

75

1,658,309

25

1,658,409

Changes in equity

Dividends

-

(120,192

)

-

(120,192

)

Total comprehensive income

-

(236,755

)

-

(236,755

)

Balance at 31 October 2020

75

1,301,362

25

1,301,462

Cash flows from operating activities

Cash generated from operations

1

175,536

1,283,025

Interest paid

(71,142

)

(78,478

)

Interest element of hire purchase payments paid

(26,767

)

(41,474

)

Tax paid

(538

)

(62,619

)

Net cash from operating activities

77,089

1,100,454

Cash flows from investing activities

Purchase of intangible fixed assets

(1,496

)

-

Purchase of tangible fixed assets

(209,057

)

(235,810

)

Sale of tangible fixed assets

17,801

30,438

Net cash from investing activities

(192,752

)

(205,372

)

Cash flows from financing activities

New loans in year

245,000

100,000

Loan repayments in year

(20,000

)

(11,686

)

New hire purchase agreements

59,700

74,971

Hire purchase repayments in year

(316,026

)

(449,077

)

Amount withdrawn by directors

(5,358

)

(16,915

)

Equity dividends paid

(120,192

)

(180,000

)

Net cash from financing activities

(156,876

)

(482,707

)

(Decrease)/increase in cash and cash equivalents

(272,539

)

412,375

Cash and cash equivalents at beginning of year

2

(2,283,292

)

(2,695,667

)

Cash and cash equivalents at end of year

2

(2,555,831

)

(2,283,292

)

1.	RECONCILIATION OF (LOSS)/PROFIT BEFORE TAXATION TO CASH GENERATED FROM OPERATIONS

2020

2019

£

£

(Loss)/profit before taxation

(326,264

)

74,641

Depreciation charges

472,864

617,502

Profit on disposal of fixed assets

(2,967

)

(8,788

)

Finance costs

97,909

119,952

241,542

803,307

Increase in stocks

(147,826

)

(377,845

)

Decrease in trade and other debtors

178,147

1,214,548

Decrease in trade and other creditors

(96,327

)

(356,985

)

Cash generated from operations

175,536

1,283,025

2.	CASH AND CASH EQUIVALENTS

The amounts disclosed on the Statement of Cash Flows in respect of cash and cash equivalents are in respect of these Statement of Financial Position amounts:

Year ended 31 October 2020

31/10/20

1/11/19

£

£

Cash and cash equivalents

311

37,257

Bank overdrafts

(2,556,142

)

(2,320,549

)

(2,555,831

)

(2,283,292

)

Year ended 31 October 2019

31/10/19

1/11/18

£

£

Cash and cash equivalents

37,257

38,628

Bank overdrafts

(2,320,549

)

(2,734,295

)

(2,283,292

)

(2,695,667

)

3.	ANALYSIS OF CHANGES IN NET DEBT

At 1/11/19

Cash flow

At 31/10/20

£

£

£

Net cash

Cash at bank and in hand

37,257

(36,946

)

311

Bank overdrafts

(2,320,549

)

(235,593

)

(2,556,142

)

(2,283,292

)

(272,539

)

(2,555,831

)

Debt

Finance leases

(787,062

)

256,326

(530,736

)

Debts falling due within 1 year

(19,796

)

(204

)

(20,000

)

Debts falling due after 1 year

(78,323

)

(224,796

)

(303,119

)

(885,181

)

31,326

(853,855

)

Total

(3,168,473

)

(241,213

)

(3,409,686

)

1.	STATUTORY INFORMATION

Advanced Engineering Techniques 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 and functional currency of the financial statements is the Pound Sterling (£).

2.	STATEMENT OF COMPLIANCE

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.

3.	ACCOUNTING POLICIES

Basis of preparing the financial statements

Going concern

From mid-March 2020 the global COVID-19 pandemic has hugely impacted the UK and caused enormous disruption across the whole society, economy and businesses in all sectors, including the manufacturing industry, as reflected in the company's reduced turnover and resulting loss for the year.

The impact of the pandemic, in conjunction with the United Kingdom's departure from the EU on 1 January 2021 and the related trade agreement are constantly monitored by the directors in order for the related risks to be managed swiftly and effectively.

Notwithstanding the loss for the year, the Company is financially secure. The Company's financial projections indicate that it has sufficient facilities and funds to operate for at least the next 12 months and its bankers continue to be supportive. Accordingly, whilst the COVID-19 situation remains unpredictable, the directors have a reasonable expectation that the company has adequate financial resources to continue in operational existence for the foreseeable future and so the financial statements are prepared on a going concern basis.

Significant judgements and estimates

The principal accounting policies and significant judgements and estimates applied in the preparation of these financial statements are set out below. These policies, judgements and estimates have been consistently applied to all years presented unless otherwise stated.

The significant judgements and estimates applied are:

-

the useful lives and residual values of tangible fixed assets at the end of their useful lives

-

the stage of completion and resulting valuation of items in work in progress

-

going concern as described above.

Turnover

Turnover represents amounts earned on goods sold and services provided during the year, derives from the provision of goods and services falling within the company's ordinary activities and is recognised in the financial statements at the date that the goods are despatched.

Tangible fixed assets

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

Long leasehold

-

Straight line over 25 to 30 years

Plant and machinery

-

Straight line over 5 to 15 years

Fixtures and fittings

-

Straight line over 3 to 15 years

Motor vehicles

-

Straight line over 4 years

Government grants

Government grants are recognised in accordance with the accrual model of Section 24 of FRS 102.

Grants became receivable as compensation for expenses already incurred for the purpose of giving immediate financial support to the entity with no future related costs recognised in income in the period in which the grant became receivable.

Stocks

Stocks and work in progress are valued at the lower of cost and net realisable value, after making due allowance for obsolete and slow moving items.

Cost is calculated using the first-in, first-out method and includes all purchase, transport and handling costs bringing stocks to their present location and condition, including an appropriate amount of fixed and variable overheads.

Taxation

Taxation for the year comprises current and deferred tax. Tax is recognised in the Statement of Comprehensive Income, 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 taxation

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.

Hire purchase and leasing commitments

Assets obtained under hire purchase contracts or finance leases are capitalised in the balance sheet. Those held under hire purchase contracts are depreciated over their estimated useful lives. Those held under finance leases are depreciated over their estimated 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.

4.	OTHER OPERATING INCOME

2020

2019

£

£

Coronovirus grants

775,315

-

Capital grants released

25,346

29,004

Exchange gains

1,344

2,918

802,005

31,922

Coronavirus grants relate to Job Retention Support Scheme Grants received from government during the pandemic. In the opinion of the directors, there are no material unfulfilled conditions or other contingencies relating to this income.

5.	EMPLOYEES AND DIRECTORS

2020

2019

£

£

Wages and salaries

4,062,341

4,618,792

Social security costs

355,828

401,628

Other pension costs

111,450

105,126

4,529,619

5,125,546

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

2020

2019

Sales, design and manufacturing staff

135

180

Administrative staff and directors

11

12

146

192

2020

2019

£

£

Directors' remuneration

252,210

266,316

Directors' pension contributions to money purchase schemes

23,371

9,613

Information regarding the highest paid director is as follows:

2020

2019

£

£

Emoluments etc

72,791

82,541

Pension contributions to money purchase schemes

6,266

3,068

6.	OPERATING (LOSS)/PROFIT

The operating loss (2019 - operating profit) is stated after charging/(crediting):

2020

2019

£

£

Hire of plant and machinery

47,892

63,305

Other operating leases

88,018

71,313

Depreciation - owned assets

220,985

341,773

Depreciation - assets on hire purchase contracts

251,879

275,729

Profit on disposal of fixed assets

(2,967

)

(8,788

)

Auditors' remuneration

21,375

22,000

Foreign exchange differences

(1,344

)

(2,918

)