Promart Manufacturing Limited - Accounts to registrar (filleted) - small 23.2.5

REGISTERED NUMBER: 01751832 (England and Wales)

FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2022

FOR

PROMART MANUFACTURING LIMITED

Page

Company Information

1

Balance Sheet

2

Notes to the Financial Statements

3

DIRECTORS:

Mr A J Davies

Mrs E Davies

Mr I P Hulse

Mr A T Mckenna

SECRETARY:

Mr A J Davies

REGISTERED OFFICE:

Unit 2b Caddick Road

Knowsley Business Park

Prescot

Merseyside

L34 9HP

REGISTERED NUMBER:

01751832 (England and Wales)

AUDITORS:

Additions

Chartered Accountants

Statutory Auditors

One Derby Square

Liverpool

L2 9QR

FIXED ASSETS

Intangible assets

4

140,778

175,972

Tangible assets

5

1,835,711

1,902,702

1,976,489

2,078,674

CURRENT ASSETS

Stocks

402,081

312,327

Debtors

6

1,307,622

722,957

Cash at bank

954,379

2,368,087

2,664,082

3,403,371

CREDITORS

Amounts falling due within one year

7

1,205,583

1,244,549

NET CURRENT ASSETS

1,458,499

2,158,822

TOTAL ASSETS LESS CURRENT LIABILITIES

3,434,988

4,237,496

CREDITORS

Amounts falling due after more than one year

8

(1,117,851

)

(1,662,414

)

PROVISIONS FOR LIABILITIES

10

(16,206

)

(114,326

)

NET ASSETS

2,300,931

2,460,756

CAPITAL AND RESERVES

Called up share capital

10,000

10,000

Revaluation reserve

348,215

362,318

Retained earnings

1,942,716

2,088,438

2,300,931

2,460,756

The financial statements have been prepared and delivered in accordance with the provisions applicable to companies subject to the small companies regime.

In accordance with Section 444 of the Companies Act 2006, the Income Statement has not been delivered.

The financial statements were approved by the Board of Directors and authorised for issue on 8 September 2023 and were signed on its behalf by:

Mr A J Davies - Director

1.	STATUTORY INFORMATION

Promart Manufacturing 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.

2.	ACCOUNTING POLICIES

Basis of preparing the financial statements

The financial statements have been prepared in accordance with FRS102 "The Financial Reporting Standard applicable in the UK and Republic of Ireland" ("FRS102") and the requirements of the Companies Act 2006 as applicable to companies subject to the small companies regime. The disclosure requirements of section 1A of FRS 102 have been applied other than where additional disclosure is required to show a true and fair view.

The financial statements are prepared in sterling, which is the functional currency of the company. Monetary amounts in these financial statements are rounded to the nearest £.

The financial statements have been prepared under the historical cost convention, modified to include the revaluation of land and buildings. The principal accounting policies adopted are set out below.

Going concern

At the time of approving the financial statements, the directors have a reasonable expectation that the company has adequate resources to continue in operational existence for the foreseeable future.

The company has certain conditions attached to long term bank borrowings. The directors are confident that if any conditions were not met in full this would not cause any material change in terms of those borrowings as they would expect to maintain the support of their principal bankers.

The company meets its day to day working capital requirements through facilities from it's principal bankers. Based upon the continuing support of the bank the directors' consider it appropriate to prepare the financial statements on the going concern basis. The financial statements, therefore, do not include any adjustments that would result from a withdrawal of the support of it's bankers.

Turnover

Turnover represents amounts receivable for goods and services net of VAT and trade discounts.

Revenue from the sale of goods is recognised when the significant risks and rewards of ownership of the goods have passed to the buyer (usually on dispatch of the goods), the amount of revenue can be measured reliably, it is probable that the economic benefits associated with the transaction will flow to the entity and the costs incurred or to be incurred in respect of the transaction can be measured reliably.

Intangible assets

Intangible assets acquired separately from a business are recognised at cost and are subsequently measured at cost less accumulated amortisation and accumulated impairment losses.

Intangible assets acquired on business combinations are recognised separately from goodwill at the acquisition date where it is probable that the expected future economic benefits that are attributable to the asset will flow to the entity and the fair value of the asset can be measured reliably; the intangible asset arises from contractual or other legal rights;and the intangible asset is separable from the entity.

Amortisation is recognised so as to write off the cost or valuation of assets less their residual values over their useful life as follows:

Asset class:

Amortisation method and rate:

Development costs

10 years straight line

Tangible fixed assets

Tangible fixed assets are initially measured at cost and subsequently measured at cost or valuation, net of depreciation and any impairment losses.

Depreciation is recognised so as to write off the cost or valuation of assets less their residual values over their useful lives on the following bases:

Asset class:

Depreciation method and rate:

Buildings

2% straight line

Plant and machinery

15% reducing balance

Land is not depreciated.

The gain or loss arising on the disposal of an asset is determined as the difference between the sale proceeds and the carrying value of the asset, and is credited or charged to profit or loss.

Impairment of fixed assets

At each reporting period end date, the company reviews the carrying amounts of its tangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where it is not possible to estimate the recoverable amount of an individual asset, the company estimates the recoverable amount of the cash-generating unit to which the asset belongs.

Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimated of future cash flows have not been adjusted.

If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (or cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the impairment loss is treated as a revaluation decrease.

Recognised impairment losses are reversed if, and only if, the reasons for the impairment loss have ceased to apply. Where an impairment loss subsequently reverses, the carrying amount of the asset (or cash-generating unit) is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset (cash-generating unit) in prior years. A reversal of an impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the reversal of the impairment loss is treated as a revaluation increase.

Stocks

Stocks are stated at the lower of cost and estimated selling price less costs to complete and sell. Cost comprises direct materials and, where applicable, direct labour costs and those overheads that have been incurred in bringing the stocks to their present location and condition.

At each reporting date, an assessment is made for impairment. Any excess of the carrying amount of stocks over its estimated selling price less costs to complete and sell is recognised as an impairment loss in profit or loss. Reversals of impairment losses are also recognised in profit or loss.

Taxation

The tax expense represents the sum of the tax currently payable and deferred tax.

Current tax

The current tax payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the profit and loss account because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The company's liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.

Deferred tax

Deferred tax liabilities are generally recognised for all timing differences and deferred tax assets are recognised to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits. Such assets and liabilities are not recognised if the timing difference arises from goodwill or from the initial recognition of other assets and liabilities in a transaction that affects neither the tax profit nor the accounting profit.

The carrying amount of deferred tax assets is reviewed at each reporting end date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realised. Deferred tax is charged or credited in the profit and loss account, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity. Deferred tax assets and liabilities are offset when the company has a legally enforceable right to offset current tax assets and liabilities and the deferred tax assets and liabilities relate to taxes levied by the same tax authority.

Research and development

Research expenditure is written off against profits in the year in which it is incurred. Identifiable development expenditure is capitalised to the extent that the technical, commercial and financial feasibility can be demonstrated.

Cash and cash equivalents

Cash and cash equivalents are basic financial assets and include cash in hand, deposits held at call with banks, other short-term liquid investments with original maturities of three months or less, and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities.

Financial instruments

The company has elected to apply the provisions of Section 11 'Basic Financial Instruments' and Section 12 'Other Financial Instruments Issues' of FRS 102 to all of its financial instruments.

Financial instruments are recongised in the company's balance sheet when the company becomes party to the contractual provisions of the instrument.

Financial assets and liabilities are offset, with the net amounts presented in the financial statements, when there is a legally enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously.

The following policies for financial instruments have been applied in the preparation of the company's financial statements:

Basic financial assets

Basic financial assets, which include debtors and cash and bank balances, are initially measured at transaction price including transaction costs and are subsequently caried at amortised cost using the effective interest method unless the arrangement constitutes a financing transaction, where the transaction is measured at the present value of the future receipts discounted at a market rate of interest. Financial assets classified as receivable within on year are not amortised.

Classification of financial liabilities

Basic financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the company after deducting all of its liabilities.

Basic financial liabilities

Basic financial liabilities, including creditors, bank loans, loans from fellow group companies and preference shares that are classified as debt, are initially recognised at transaction price unless the arrangement constitutes a financing transaction, where the debt instrument is measured at the present value of the future payments discounted at a market rate of interest. Financial liabilities classified as payable within one year are not amortised.

Debt instruments are subsequently carried at amortised cost, using the effective interest rate method.

Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Amounts payable are classified as current liabilities if payment is due within one year or less. If not, they are presented as non-current liabilities. Trade creditors are recognised initially at transaction price and subsequently measured at amortised cost using the effective interest method.

Equity instruments

Equity instruments issued by the company are recorded at the proceeds received, net of transaction costs. Dividends payable on equity instruments are recognised as liabilities once they are no longer at the discretion of the company.

Employee benefits

The costs of short-term employee benefits are recognised as a liability and an expense, unless those costs are required to be recognised as part of the cost of stock or fixed assets.

The cost of any unused holiday entitlement is recognised in the period in which the employee's services are received.

Termination benefits are recognised immediately as an expense when the company is demonstrably committed to terminate the employment of an employee or to provide termination benefits.

Retirement benefts

The company operates a defined contribution scheme for the benefit of its employees. Contributions payable are charged to the profit and loss account in the year they are payable.

Government grants

Government grants are recognised at the fair value of the asset received or receivable when there is reasonable assurance that the grant conditions will be met and the grants will be received.

A grant that specifies performance conditions is recognised in income when the performance conditions are met. Where a grant does not specify performance conditions it is recognised in income when the proceeds are received or receivable. A grant received before the recognition criteria are satisfied is recognised as a liability.

3.	EMPLOYEES AND DIRECTORS

The average number of employees during the year was 52 (2021 - 50 ) .

4.	INTANGIBLE FIXED ASSETS

Development

costs

£

COST

At 1 January 2022

and 31 December 2022

351,943

AMORTISATION

At 1 January 2022

175,971

Amortisation for year

35,194

At 31 December 2022

211,165

NET BOOK VALUE

At 31 December 2022

140,778

At 31 December 2021

175,972

5.	TANGIBLE FIXED ASSETS

Plant and

Land and

machinery

buildings

etc

Totals

£

£

£

COST

At 1 January 2022

1,621,093

928,387

2,549,480

Additions

-

17,845

17,845

At 31 December 2022

1,621,093

946,232

2,567,325

DEPRECIATION

At 1 January 2022

60,432

586,346

646,778

Charge for year

32,422

52,414

84,836

At 31 December 2022

92,854

638,760

731,614

NET BOOK VALUE

At 31 December 2022

1,528,239

307,472

1,835,711

At 31 December 2021

1,560,661

342,041

1,902,702

Land and buildings were valued at 20 February 2020 by Mason Owen, independent valuers not connected with the company on the basis of market value. The valuation conforms to International Valuation Standards and was based on recent market transactions on arm's length terms for similar properties. The directors used this as a basis to value the land and buildings at 31 December 2019.

Historical cost

If revalued assets were stated on an historical cost basis rather than a fair value basis, the total amounts included would have been as follows:

2022

2021

£

£

Cost

1,276,688

1.276,688

Accumulated depreciation

(167,557

)

(148,078

)

Carrying value

1,109,031

1,128,610

6.

DEBTORS: AMOUNTS FALLING DUE WITHIN ONE YEAR

2022

2021

£

£

Trade debtors

788,780

299,575

Amounts owed by group undertakings

38,345

42,481

Other debtors

480,497

380,901

1,307,622

722,957

Amounts owed by group undertakings are interest free, have no fixed date of repayment and are repayable upon demand.

7.

CREDITORS: AMOUNTS FALLING DUE WITHIN ONE YEAR

2022

2021

£

£

Bank loans and overdrafts (see note 9)

294,161

337,879

Trade creditors

444,650

404,709

Taxation and social security

194,513

245,661

Other creditors

272,259

256,300

1,205,583

1,244,549

8.

CREDITORS: AMOUNTS FALLING DUE AFTER MORE THAN ONE YEAR

2022

2021

£

£

Bank loans (see note 9)

1,067,012

1,572,233

Other creditors

50,839

90,181

1,117,851

1,662,414

9.

LOANS

Included within bank loans is £465,340 (2021: £514,279) in respect of a bank loan. The security for the bank loan is supported by fixed and floating charges over all current and future assets of the company and by a corporate guarantee between Promart Manufacturing Limited, Promart Holdings Limited and Promart Holdings (UK) Limited. This is supported by a first legal charge over the fixed assets owned by the parent and company.

The bank loan incurs interest at base plus 2% per annum and is due for repayment in 2031.

Also included in bank loans is £895,833 (2021: £1,145,833) in respect of a Corovonavirus Business Interruption loan. The security for this loan is supported by fixed and floating charges over all current and future assets of the company and by a corporate guarantee between Promart Manufacturing Limited, Promart Holdings Limited and Promart Holdings (UK) Limited. This is supported by a first legal charge over fixed assets owned by the parent and company.

This loan incurs interest at 2.79% per annum and is due for repayment in 2026.

Also included in bank loans is £nil (2021: £250,000) in respect of a second Coronavirus Business Interuption loan. The security for this loan was supported by fixed and floating charges over all current and future assets of the company and by a corporate guarantee between Promart Manufacturing Limited, Promart Holdings Limited and Promart Holdings (UK) Limited. This was supported by a first legal charge over fixed assets owned by the parent and company.

This loan incurred interest at base plus 2.11% and was due for repayment in 2027, but was repaid in full on 30 March 2022.

Included in the loans and borrowings are the following amounts due after more than five years:

2022

2021

£

£

After more than five years by instalments

216,129

263,416

10.	PROVISIONS FOR LIABILITIES

A provision of £16,206 (2021: £114,236) has been recognised for deferred taxation which arises on accelerated capital allowances, losses carried forward and other timing differences.

11.	DISCLOSURE UNDER SECTION 444(5B) OF THE COMPANIES ACT 2006

The Report of the Auditors was unqualified.

Maxine Desse BA (Econ) FCA (Senior Statutory Auditor)

for and on behalf of Additions

12.	RELATED PARTY DISCLOSURES

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.

No other transactions with related parties were undertaken such as are required to be disclosed Financial Reporting Standard 102.

13.	PARENT COMPANY

The company is a wholly owned subsidiary of Promart Holdings Limited and its ultimate parent company is Promart Holdings (UK) Limited.

The smallest and largest group into which the result of this entity are consolidated is Promart Holdings (UK) Limited. The company is registered at Unit 2b Caddick Road, Knowsley Business Park, Prescot, L34 9HP. The consolidated accounts are also available from this address.

The ulitmate controlling party is Mr A Davies.