Company registration number 01293983 (England and Wales)
Ellis Patents Limited
Annual Report And Financial Statements
For The Year Ended 28 February 2023
ELLIS PATENTS LIMITED
Ellis Patents Limited
COMPANY INFORMATION
Directors
Mr C J Calvert
Mr D Macfarlane
Mr R A Shaw
Mr J M Weaving
Mrs D Holmes
Mr R M Lowish
Mr S A Walton
Miss K E Brown
(Appointed 1 April 2022)
Secretary
Mrs D Holmes
Company number
01293983
Registered office
High Street
Rillington
Malton
YO17 8LA
Auditor
Azets Audit Services Limited
Triune Court
Monks Cross Drive
York
YO32 9GZ
ELLIS PATENTS LIMITED
Ellis Patents Limited
CONTENTS
Page
Strategic report
1 - 2
Directors' report
3
Directors' responsibilities statement
4
Independent auditor's report
5 - 7
Statement of comprehensive income
8
Balance sheet
9
Statement of changes in equity
10
Notes to the financial statements
11 - 25
ELLIS PATENTS LIMITED
Ellis Patents Limited
STRATEGIC REPORT
FOR THE YEAR ENDED 28 FEBRUARY 2023
- 1 -
The directors present the strategic report for the year ended 28 February 2023.
Fair review of the business
The principal activity of the Company is the design, manufacture and marketing of cable and pipe fixings.
The impact of Covid-19 was very much less apparent, although material prices and shipping prices remained high, easing somewhat later in the year.
The invasion of Ukraine had an impact on energy prices but the Company’s significant investment in solar panels went some way to mitigating these costs.
The Company’s activities have returned to normal and trading conditions have continued to improve.
Principal risks and uncertainties
The Company operates in a competitive commercial environment, which by its nature, presents risks and uncertainties. However, there are strategies in place to maintain and grow market share globally, whilst geographical coverage and market sector diversity ensure there is no overdependence on any particular territory or sector.
Principal risks also arise from financial aspects of doing business, and in particular related to financial instruments.
The Company’s principal financial instruments comprise cash, trade debtors and trade creditors which arise directly from its operations. The Company does not enter into derivative transactions and it is the Company’s policy that no trading in financial instruments be undertaken. The main risks arising from the Company’s financial instruments are commodity risk, credit risk and foreign exchange risk.
Commodity risk
Material prices and shipping prices were high at the beginning of the year but eased as the year progressed. The Company has continued to mitigate risk by holding stock.
Credit risk
The Company trades with recognised creditworthy third parties. Trade debtor balances are monitored on an ongoing basis with the result that the Company’s exposure to bad debts is not considered to be significant. The majority of trade debtors are insured.
Foreign exchange risk
As far as is practical the Company continued to mitigate foreign exchange risk using forward exchange contracts.
Analysis based on Key Performance Indicators
The directors consider the key performance indicators to be sales, gross profit, and cash.
Sales increased in the financial year by 22.4%, following an increase of 33.9% in the prior year. Gross profit (as a percentage of sales) has marginally reduced this year, from 40.4% to 39.3%. Cash levels have remained healthy throughout the year as a result of careful cash management.
Given the relatively straightforward nature of the Company’s operations, the directors do not believe there to be value in a more in-depth review of its KPIs.
The Company’s balance sheet as detailed on page 8 shows a satisfactory position with shareholders’ funds amounting to £5,231,695 (2022 £4,709,675).
ELLIS PATENTS LIMITED
Ellis Patents Limited
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 28 FEBRUARY 2023
- 2 -
Future Developmments
The Company continues to develop new products, explore new market sectors, and expand its global reach, and consequently the directors are confident about the future prospects of the Company.
Mrs D Holmes
Secretary
27 June 2023
ELLIS PATENTS LIMITED
Ellis Patents Limited
DIRECTORS' REPORT
FOR THE YEAR ENDED 28 FEBRUARY 2023
- 3 -
The directors present their annual report and financial statements for the year ended 28 February 2023.
Principal activities
The principal activity of the company is the design, manufacture and marketing of cable and pipe fixings.
Results and dividends
The results for the year are set out on page 8.
Ordinary interim dividends were paid amounting to £470,000. The directors do not recommend payment of a final dividend.
Directors
The directors who held office during the year and up to the date of signature of the financial statements were as follows:
Mr C J Calvert
Mr D Macfarlane
Mr R A Shaw
Mr J M Weaving
Mrs D Holmes
Mr R M Lowish
Mr S A Walton
Miss K E Brown
(Appointed 1 April 2022)
Mr N J Nightingale
(Resigned 12 July 2022)
Auditor
The auditor, Azets Audit Services Limited, is deemed to be reappointed under section 487(2) of the Companies Act 2006.
Statement of disclosure to auditor
So far as each person who was a director at the date of approving this report is aware, there is no relevant audit information of which the company’s auditor is unaware. Additionally, the directors individually have taken all the necessary steps that they ought to have taken as directors in order to make themselves aware of all relevant audit information and to establish that the company’s auditor is aware of that information.
By order of the board
Mrs D Holmes
Secretary
27 June 2023
ELLIS PATENTS LIMITED
Ellis Patents Limited
DIRECTORS' RESPONSIBILITIES STATEMENT
FOR THE YEAR ENDED 28 FEBRUARY 2023
- 4 -
The directors are responsible for preparing the annual report and the financial statements in accordance with applicable law and regulations.
Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the company and of the profit or loss of the company for that period. In preparing these financial statements, the directors are required to:
select suitable accounting policies and then apply them consistently;
make judgements and accounting estimates that are reasonable and prudent;
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.
ELLIS PATENTS LIMITED
Ellis Patents Limited
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF ELLIS PATENTS LIMITED
- 5 -
Opinion
We have audited the financial statements of Ellis Patents Limited (the 'company') for the year ended 28 February 2023 which comprise the statement of comprehensive income, the balance sheet, the statement of changes in equity and notes to the financial statements, including significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice).
In our opinion the financial statements:
give a true and fair view of the state of the company's affairs as at 28 February 2023 and of its profit for the year then ended;
have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and
have been prepared in accordance with the requirements of the Companies Act 2006.
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditor's responsibilities for the audit of the financial statements section of our report. We are independent of the company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC’s Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Conclusions relating to going concern
In auditing the financial statements, we have concluded that the directors' use of the going concern basis of accounting in the preparation of the financial statements is appropriate.
Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the company's ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.
Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.
The other information comprises the information included in the annual report other than the financial statements and our auditor's report thereon. The directors are responsible for the other information contained within the annual report. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon.
Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the course of the audit, or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.
We have nothing to report in this regard.
Opinions on other matters prescribed by the Companies Act 2006
In our opinion, based on the work undertaken in the course of our audit:
the information given in the strategic report and the directors' report for the financial year for which the financial statements are prepared is consistent with the financial statements; and
the strategic report and the directors' report have been prepared in accordance with applicable legal requirements.
ELLIS PATENTS LIMITED
Ellis Patents Limited
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF ELLIS PATENTS LIMITED
- 6 -
Matters on which we are required to report by exception
In the light of the knowledge and understanding of the company and its environment obtained in the course of the audit, we have not identified material misstatements in the strategic report or the directors' report. We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to report to you if, in our opinion:
adequate accounting records have not been kept, or returns adequate for our audit have not been received from branches not visited by us; or
the financial statements are not in agreement with the accounting records and returns; or
certain disclosures of remuneration specified by law are not made; or
we have not received all the information and explanations we require for our audit.
Responsibilities of directors
As explained more fully in the directors' responsibilities statement, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. In preparing the financial statements, the directors are responsible for assessing the company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the company or to cease operations, or have no realistic alternative but to do so.
Auditor's responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.
A further description of our responsibilities is available on the Financial Reporting Council’s website at: https://www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor's report.
ELLIS PATENTS LIMITED
Ellis Patents Limited
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF ELLIS PATENTS LIMITED
- 7 -
Extent to which the audit was considered capable of detecting irregularities, including fraud
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above and on the Financial Reporting Council’s website, to detect material misstatements in respect of irregularities, including fraud.
We obtain and update our understanding of the entity, its activities, its control environment, and likely future developments, including in relation to the legal and regulatory framework applicable and how the entity is complying with that framework. Based on this understanding, we identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. This includes consideration of the risk of acts by the entity that were contrary to applicable laws and regulations, including fraud.
In response to the risk of irregularities and non-compliance with laws and regulations, including fraud, we designed procedures which included:
Enquiry of management and those charged with governance around actual and potential litigation and claims as well as actual, suspected and alleged fraud;
Reviewing minutes of meetings of those charged with governance;
Assessing the extent of compliance with the laws and regulations considered to have a direct material effect on the financial statements or the operations of the company through enquiry and inspection;
Reviewing financial statement disclosures and testing to supporting documentation to assess compliance with applicable laws and regulations;
Performing audit work over the risk of management bias and override of controls, including testing of journal entries and other adjustments for appropriateness, evaluating the business rationale of significant transactions outside the normal course of business and reviewing accounting estimates for indicators of potential bias.
Performing audit work over the timing and recognition of revenue and in particular whether it has been recorded in the correct accounting period.
Because of the inherent limitations of an audit, there is a risk that we will not detect all irregularities, including those leading to a material misstatement in the financial statements or non-compliance with regulation. This risk increases the more that compliance with a law or regulation is removed from the events and transactions reflected in the financial statements, as we will be less likely to become aware of instances of non-compliance. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
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.
Alan Sidebottom (Senior Statutory Auditor)
For and on behalf of Azets Audit Services Limited
27 June 2023
Chartered Accountants
Statutory Auditor
Triune Court
Monks Cross Drive
York
YO32 9GZ
ELLIS PATENTS LIMITED
Ellis Patents Limited
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 28 FEBRUARY 2023
- 8 -
2023
2022
Notes
£
£
Turnover
3
9,200,095
7,518,062
Cost of sales
(5,583,121)
(4,481,928)
Gross profit
3,616,974
3,036,134
Distribution costs
(179,652)
(141,045)
Administrative expenses
(2,433,741)
(1,890,492)
Other operating income
13,550
15,600
Operating profit
4
1,017,131
1,020,197
Interest receivable and similar income
6
11,464
219
Change in fair value of investment properties
7
100,000
-
Profit before taxation
1,128,595
1,020,416
Tax on profit
8
(180,473)
(203,909)
Profit for the financial year
948,122
816,507
ELLIS PATENTS LIMITED
Ellis Patents Limited
BALANCE SHEET
AS AT
28 FEBRUARY 2023
28 February 2023
- 9 -
2023
2022
Notes
£
£
£
£
Fixed assets
Tangible assets
11
1,354,008
1,492,755
Investment properties
12
565,000
465,000
1,919,008
1,957,755
Current assets
Stocks
13
2,498,664
2,120,529
Debtors
14
1,850,202
1,614,420
Cash at bank and in hand
846,087
1,127,571
5,194,953
4,862,520
Creditors: amounts falling due within one year
15
(1,415,571)
(1,713,497)
Net current assets
3,779,382
3,149,023
Total assets less current liabilities
5,698,390
5,106,778
Creditors: amounts falling due after more than one year
16
(216,695)
(160,103)
Provisions for liabilities
Deferred tax liability
17
250,000
237,000
(250,000)
(237,000)
Net assets
5,231,695
4,709,675
Capital and reserves
Called up share capital
20
40,129
40,129
Share premium account
121,865
121,865
Other reserves
195,524
151,626
Profit and loss reserves
21
4,874,177
4,396,055
Total equity
5,231,695
4,709,675
The financial statements were approved by the board of directors and authorised for issue on 27 June 2023 and are signed on its behalf by:
Mr R A Shaw
Director
Company Registration No. 01293983
ELLIS PATENTS LIMITED
Ellis Patents Limited
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 28 FEBRUARY 2023
- 10 -
Share capital
Share premium account
Other reserves
Profit and loss reserves
Total
Notes
£
£
£
£
£
Balance at 1 March 2021
40,129
121,865
151,626
3,779,548
4,093,168
Year ended 28 February 2022:
Profit and total comprehensive income for the year
-
-
-
816,507
816,507
Dividends
9
-
-
-
(200,000)
(200,000)
Balance at 28 February 2022
40,129
121,865
151,626
4,396,055
4,709,675
Year ended 28 February 2023:
Profit and total comprehensive income for the year
-
-
-
948,122
948,122
Dividends
9
-
-
-
(470,000)
(470,000)
Share based payment expense
-
-
43,898
43,898
Balance at 28 February 2023
40,129
121,865
195,524
4,874,177
5,231,695
ELLIS PATENTS LIMITED
Ellis Patents Limited
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 28 FEBRUARY 2023
- 11 -
1
Accounting policies
Company information
Ellis Patents Limited is a company limited by shares incorporated in England and Wales, with company reference 01293983. The registered office is High Street, Rillington, Malton, YO17 8LA.
1.1
Accounting convention
These financial statements have been prepared in accordance with “The Financial Reporting Standard applicable in the UK and Republic of Ireland” (“FRS 102”) and the requirements of the Companies Act 2006.
The financial statements are prepared in sterling, which is the functional currency of the company. Monetary amounts in these financial statements are rounded to the nearest £1.
The financial statements have been prepared under the historical cost convention, modified to include investment properties and certain financial instruments at fair value. The principal accounting policies adopted are set out below.
This company is a qualifying entity for the purposes of FRS 102, being a member of a group where the parent of that group prepares publicly available consolidated financial statements, including this company, which are intended to give a true and fair view of the assets, liabilities, financial position and profit or loss of the group. The company has therefore taken advantage of exemptions from the following disclosure requirements:
Section 7 ‘Statement of Cash Flows’: Presentation of a statement of cash flow and related notes and disclosures;
Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instrument Issues: Interest income/expense and net gains/losses for financial instruments not measured at fair value; basis of determining fair values; details of collateral, loan defaults or breaches, details of hedges, hedging fair value changes recognised in profit or loss and in other comprehensive income;
Section 33 ‘Related Party Disclosures’: Compensation for key management personnel
Ellis Patents Limited is a wholly owned subsidiary of Ellis Patents Holdings Limited. The results of Ellis Patents Limited are included in the consolidated financial statements of Ellis Patents Holdings Limited. The registered office of Holdings Limited is High Street, Rillington, Malton, YO17 8LA.
1.2
Going concern
The directors have considered all factors, including in the wider economy, as part of their assessment of going concern. Although the current economic climate creates both cashflow and profitability risks for the company, the company continues to trade profitably and is cash generative. Budgets and cashflows have been prepared using assumptions for customer demand and supply chain costs as well as expectations for legal and regulatory environmental impacts. These budgets and cashflows indicate continuing profitability and cash generation, consequently the directors believe on balance that they have sufficient resources to enable trading to continue for a period of at least one year from the date of approval of the financial statements. Accordingly, these financial statements have been prepared on the going concern basis.true
1.3
Turnover
Turnover represents amounts invoiced for goods despatched and services rendered during the year, 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), 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.
1.4
Research and development expenditure
Research and development expenditure is written off against profits in the year in which it is incurred.
ELLIS PATENTS LIMITED
Ellis Patents Limited
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 28 FEBRUARY 2023
1
Accounting policies
(Continued)
- 12 -
1.5
Intangible fixed assets other than goodwill
Intangible assets acquired separately from a business are recognised at cost and are subsequently measured at cost less accumulated amortisation and accumulated impairment losses.
Amortisation 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:
Software
5 years straight line
1.6
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:
Plant and machinery
5 to 10 years straight line
Fixtures, fittings and equipment
10 years straight line
Tooling
10 years straight line
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.
1.7
Investment properties
Investment property, which is property held to earn rentals and/or for capital appreciation, is measured using the fair value model and stated at its fair value at the reporting end date. The surplus or deficit on revaluation is recognised in the profit and loss account.
1.8
Impairment of fixed assets
At each reporting period end date, the company reviews the carrying amounts of its tangible and intangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where it is not possible to estimate the recoverable amount of an individual asset, the company estimates the recoverable amount of the cash-generating unit to which the asset belongs.
Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.
If the recoverable amount of an asset is estimated to be less than its carrying amount, the carrying amount of the asset 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 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 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.
ELLIS PATENTS LIMITED
Ellis Patents Limited
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 28 FEBRUARY 2023
1
Accounting policies
(Continued)
- 13 -
1.9
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.
Stocks are costed on an activity based costing model, with absorption of directly incurred overheads.
At each reporting date, an assessment is made for impairment. Any excess of the carrying amount of stocks over its estimated selling price less costs to complete and sell is recognised as an impairment loss in profit or loss. Reversals of impairment losses are also recognised in profit or loss.
1.10
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.
1.11
Financial instruments
The company has elected to apply the provisions of Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instruments Issues’ of FRS 102 to all of its financial instruments.
Financial instruments are recognised in the company's balance sheet when the company becomes party to the contractual provisions of the instrument.
Financial assets and liabilities are offset, with the net amounts presented in the financial statements, when there is a legally enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously.
Basic financial assets
Basic financial assets, which include debtors and cash and bank balances, are initially measured at transaction price including transaction costs and are subsequently carried at amortised cost using the effective interest method unless the arrangement constitutes a financing transaction, where the transaction is measured at the present value of the future receipts discounted at a market rate of interest. Financial assets classified as receivable within one year are not amortised.
Other financial assets
Other financial assets, including investments in equity instruments which are not subsidiaries, associates or joint ventures, are initially measured at fair value, which is normally the transaction price. Such assets are subsequently carried at fair value and the changes in fair value are recognised in profit or loss, except that investments in equity instruments that are not publicly traded and whose fair values cannot be measured reliably are measured at cost less impairment.
ELLIS PATENTS LIMITED
Ellis Patents Limited
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 28 FEBRUARY 2023
1
Accounting policies
(Continued)
- 14 -
Impairment of financial assets
Financial assets, other than those held at fair value through profit and loss, are assessed for indicators of impairment at each reporting end date.
Financial assets are impaired where there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial asset, the estimated future cash flows have been affected. If an asset is impaired, the impairment loss is the difference between the carrying amount and the present value of the estimated cash flows discounted at the asset’s original effective interest rate. The impairment loss is recognised in profit or loss.
If there is a decrease in the impairment loss arising from an event occurring after the impairment was recognised, the impairment is reversed. The reversal is such that the current carrying amount does not exceed what the carrying amount would have been, had the impairment not previously been recognised. The impairment reversal is recognised in profit or loss.
Derecognition of financial assets
Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire or are settled, or when the company transfers the financial asset and substantially all the risks and rewards of ownership to another entity, or if some significant risks and rewards of ownership are retained but control of the asset has transferred to another party that is able to sell the asset in its entirety to an unrelated third party.
Classification of financial liabilities
Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the company after deducting all of its liabilities.
Basic financial liabilities
Basic financial liabilities, including creditors, bank loans, and loans from fellow group companies, 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. Financial liabilities classified as payable within one year are not amortised.
Debt instruments are subsequently carried at amortised cost, using the effective interest rate method.
Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Amounts payable are classified as current liabilities if payment is due within one year or less. If not, they are presented as non-current liabilities. Trade creditors are recognised initially at transaction price and subsequently measured at amortised cost using the effective interest method.
Other financial liabilities
Derivatives, including interest rate swaps and forward foreign exchange contracts, are not basic financial instruments. Derivatives are initially recognised at fair value on the date a derivative contract is entered into and are subsequently re-measured at their fair value. Changes in the fair value of derivatives are recognised in profit or loss in finance costs or finance income as appropriate, unless hedge accounting is applied and the hedge is a cash flow hedge.
Debt instruments that do not meet the conditions in FRS 102 paragraph 11.9 are subsequently measured at fair value through profit or loss. Debt instruments may be designated as being measured at fair value through profit or loss to eliminate or reduce an accounting mismatch or if the instruments are measured and their performance evaluated on a fair value basis in accordance with a documented risk management or investment strategy.
Derecognition of financial liabilities
Financial liabilities are derecognised when the company’s contractual obligations expire or are discharged or cancelled.
ELLIS PATENTS LIMITED
Ellis Patents Limited
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 28 FEBRUARY 2023
1
Accounting policies
(Continued)
- 15 -
1.12
Equity instruments
Equity instruments issued by the company are recorded at the proceeds received, net of transaction costs. Dividends payable on equity instruments are recognised as liabilities once they are no longer at the discretion of the company.
1.13
Derivatives
Derivatives are initially recognised at fair value at the date a derivative contract is entered into and are subsequently remeasured to fair value at each reporting end date. The resulting gain or loss is recognised in profit or loss immediately unless the derivative is designated and effective as a hedging instrument, in which event the timing of the recognition in profit or loss depends on the nature of the hedge relationship.
A derivative with a positive fair value is recognised as a financial asset, whereas a derivative with a negative fair value is recognised as a financial liability.
1.14
Taxation
The tax expense represents the sum of the tax currently payable and deferred tax.
Current tax
The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the profit and loss account because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The company’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.
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.
ELLIS PATENTS LIMITED
Ellis Patents Limited
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 28 FEBRUARY 2023
1
Accounting policies
(Continued)
- 16 -
1.15
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.
The company operates a Senior Employee Bonus Scheme whereby a discretionary allocation of points is made each year by the shareholders, with the value of each point linked to the underlying share valuation of the Group of which this company is a subsidiary. Members of the Scheme can only recognise the value after a vesting period, but after the vesting period those Members have the right to take settlement of the value in cash as at that date. At each balance sheet date the estimated present value of the Group's obligations under the Scheme is provided for as a liability, with the movement from the prior year's present value recognised as a movement in profit or loss.
Termination benefits are recognised immediately as an expense when the company is demonstrably committed to terminate the employment of an employee or to provide termination benefits.
1.16
Retirement benefits
Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.
1.17
Share-based payments
The fair value of equity-settled share based payments to employees is determined at the date of grant and is expensed on a straight-line basis over the vesting period based on the company’s estimate of shares or options that will eventually vest. Where the date of grant and issue of shares is on the same date, amounts are recognised as an immediate expense to the profit and loss account as measured by reference to the fair value of shares provided to recipients.
1.18
Leases
Rentals payable under operating leases, including any lease incentives received, are charged to profit or loss on a straight line basis over the term of the relevant lease except where another more systematic basis is more representative of the time pattern in which economic benefits from the leases asset are consumed.
Rentals payable under operating leases are charged against income on a straight line basis over the lease term.
1.19
Foreign exchange
Transactions in currencies other than pounds sterling are recorded at the rates of exchange prevailing at the dates of the transactions. At each reporting end date, monetary assets and liabilities that are denominated in foreign currencies are retranslated at the rates prevailing on the reporting end date. Gains and losses arising on translation in the period are included in profit or loss.
ELLIS PATENTS LIMITED
Ellis Patents Limited
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 28 FEBRUARY 2023
- 17 -
2
Judgements and key sources of estimation uncertainty
In the application of the company’s accounting policies, the directors are required to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised where the revision affects only that period, or in the period of the revision and future periods where the revision affects both current and future periods.
Key sources of estimation uncertainty
The estimates and assumptions which have a significant risk of causing a material adjustment to the carrying amount of assets and liabilities are as follows.
Tooling expenditure
As part of its manufacturing process, the Group incurs expenditure on creating its own tooling for use in the primary trade; this expenditure is capitalised as a fixed asset and depreciated over 10 years.
The cost is determined by reference to the direct time incurred on each tool item, with the cost per hour calculated using a total cost formula, updated on an annual basis. The useful life is determined using management's expectation of the period of use of each tool using their experience of the renewal period of similar tools.
Investment properties
The Company holds investment properties at their fair value, which approximates to the open market value of the property on an existing use basis. The company obtains regular professional valuations to determine this estimate, with the last professional valuation being obtained for the year ending 28 February 2023.
Senior Employee Bonus Scheme
The Group operates a long term bonus scheme for a number of its primary management personnel. This is calculated by a discretionary allocation of points each year under the control of the shareholders, with these points being multiplied by an estimated market value for the Group. The total provision is scheduled in note 15.
Depreciation
The depreciation policy has been set according to management's experience of the useful lives of a typical asset in each category, something which is reviewed annually. It is not considered practical to use a per unit basis to allocate depreciation without undue cost and therefore amounts are charged annually. The depreciation charged during the year was £51,007 (2022 - £38,996) which the directors feel is a fair reflection of the benefits derived from the consumption of the tangible fixed assets in use during the period.
ELLIS PATENTS LIMITED
Ellis Patents Limited
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 28 FEBRUARY 2023
- 18 -
3
Turnover and other revenue
An analysis of the company's turnover is as follows:
2023
2022
£
£
Turnover analysed by class of business
Sale of goods
9,055,926
7,401,721
Sundry and scrap sales
35,493
27,062
Carriage income
108,676
89,279
9,200,095
7,518,062
2023
2022
£
£
Turnover analysed by geographical market
UK
5,835,521
3,943,889
Europe but not in the EU
732,972
301,855
EU member states
724,013
948,392
Rest of the World
1,907,589
2,323,926
9,200,095
7,518,062
2023
2022
£
£
Other revenue
Interest income
11,464
219
4
Operating profit
2023
2022
Operating profit for the year is stated after charging/(crediting):
£
£
Exchange losses
26,407
9,477
Research and development costs
53,220
45,385
Fees payable to the company's auditor for the audit of the company's financial statements
13,300
11,100
Depreciation of owned tangible fixed assets
343,021
347,275
Profit on disposal of tangible fixed assets
(2,021)
(4,475)
Amortisation of intangible assets
-
744
Share-based payments
43,898
-
Operating lease charges
143,750
137,500
ELLIS PATENTS LIMITED
Ellis Patents Limited
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 28 FEBRUARY 2023
- 19 -
5
Employees
The average monthly number of persons (including directors) employed by the company during the year was:
2023
2022
Number
Number
Manufacturing
43
40
Office and management
26
26
Total
69
66
Their aggregate remuneration comprised:
2023
2022
£
£
Wages and salaries
2,332,049
1,968,303
Social security costs
229,283
170,446
Pension costs
228,541
204,129
2,789,873
2,342,878
6
Interest receivable and similar income
2023
2022
£
£
Interest income
Interest on bank deposits
11,464
219
Investment income includes the following:
Interest on financial assets not measured at fair value through profit or loss
11,464
219
7
Fair value adjustments
2023
2022
£
£
Changes in the fair value of investment properties
100,000
-
ELLIS PATENTS LIMITED
Ellis Patents Limited
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 28 FEBRUARY 2023
- 20 -
8
Taxation
2023
2022
£
£
Current tax
UK corporation tax on profits for the current period
235,000
180,000
Adjustments in respect of prior periods
(67,527)
Total current tax
167,473
180,000
Deferred tax
Origination and reversal of timing differences
13,000
(33,115)
Changes in tax rates
57,024
Total deferred tax
13,000
23,909
Total tax charge
180,473
203,909
The actual charge for the year can be reconciled to the expected charge for the year based on the profit or loss and the standard rate of tax as follows:
2023
2022
£
£
Profit before taxation
1,128,595
1,020,416
Expected tax charge based on the standard rate of corporation tax in the UK of 19.00% (2022: 19.00%)
214,433
193,879
Tax effect of expenses that are not deductible in determining taxable profit
8,341
Effect of change in corporation tax rate
57,024
Depreciation on assets not qualifying for tax allowances
404
522
Under/(over) provided in prior years
(67,527)
Research and Development and Patent Box adjustments
(18,512)
Other tax adjustments
24,940
(28,886)
Capitalised revenue
(118)
(118)
Taxation charge for the year
180,473
203,909
The UK corporation tax rate was 19% throughout the year.
In the March 2021 Budget, a change to the future UK corporation tax rate was announced, indicating that the rate will increase to 25% from April 2023. Deferred tax balances at the reporting date are therefore measured at 25% (2022 - 25%).
9
Dividends
2023
2022
£
£
Interim paid
470,000
200,000
ELLIS PATENTS LIMITED
Ellis Patents Limited
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 28 FEBRUARY 2023
- 21 -
10
Intangible fixed assets
Software
£
Cost
At 1 March 2022 and 28 February 2023
11,516
Amortisation and impairment
At 1 March 2022 and 28 February 2023
11,516
Carrying amount
At 28 February 2023
At 28 February 2022
11
Tangible fixed assets
Plant and machinery
Fixtures, fittings and equipment
Tooling
Total
£
£
£
£
Cost
At 1 March 2022
2,520,337
276,223
3,486,679
6,283,239
Additions
142,803
14,582
46,889
204,274
Disposals
(8,405)
(8,405)
At 28 February 2023
2,654,735
290,805
3,533,568
6,479,108
Depreciation and impairment
At 1 March 2022
1,910,790
182,183
2,697,511
4,790,484
Depreciation charged in the year
148,416
17,307
177,298
343,021
Eliminated in respect of disposals
(8,405)
(8,405)
At 28 February 2023
2,050,801
199,490
2,874,809
5,125,100
Carrying amount
At 28 February 2023
603,934
91,315
658,759
1,354,008
At 28 February 2022
609,547
94,040
789,168
1,492,755
ELLIS PATENTS LIMITED
Ellis Patents Limited
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 28 FEBRUARY 2023
- 22 -
12
Investment property
2023
£
Fair value
At 1 March 2022
465,000
Net gains or losses through fair value adjustments
100,000
At 28 February 2023
565,000
The investment property was revalued on 10 May 2023 by Lawrence Hannah Property and Construction Consultants, on the basis of its open market value for continued use, which is believed by the directors to be equivalent to its fair value. The directors do not believe there to have been a material change in the valuation since this date.
13
Stocks
2023
2022
£
£
Raw materials and consumables
1,398,754
1,037,951
Work in progress
434,918
463,475
Finished goods and goods for resale
664,992
619,103
2,498,664
2,120,529
14
Debtors
2023
2022
Amounts falling due within one year:
£
£
Trade debtors
1,733,746
1,511,741
Amounts owed by group undertakings
12,450
Prepayments and accrued income
104,006
102,679
1,850,202
1,614,420
15
Creditors: amounts falling due within one year
2023
2022
£
£
Trade creditors
409,525
555,618
Amounts owed to group undertakings
124,913
Corporation tax
235,000
176,500
Other taxation and social security
177,975
169,828
Accruals and deferred income
593,071
686,638
1,415,571
1,713,497
ELLIS PATENTS LIMITED
Ellis Patents Limited
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 28 FEBRUARY 2023
- 23 -
16
Creditors: amounts falling due after more than one year
2023
2022
£
£
Other creditors
216,695
160,103
The long term creditor represents a provision for amounts due under the company's Senior Employee Bonus Scheme. Amounts accrued which fall due within one year are included within note 15 and amount to £72,109 (2022 - £61,457).
17
Deferred taxation
The following are the major deferred tax liabilities and assets recognised by the company and movements thereon:
Liabilities
Liabilities
2023
2022
Balances:
£
£
Capital allowances claimed in excess of depreciation charged
273,000
259,909
Senior Employee Bonus Scheme
(73,000)
(49,000)
Investment property revaluations
50,000
26,091
250,000
237,000
2023
Movements in the year:
£
Liability at 1 March 2022
237,000
Charge to profit or loss
13,000
Liability at 28 February 2023
250,000
No balances are expected to substantially unwind within the next 12 months.
The deferred taxation asset has this year been offset against associated liabilities against which it is expected the timing difference will unwind.
18
Retirement benefit schemes
2023
2022
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
228,541
204,129
The company operates a defined contribution pension scheme for all qualifying employees. The assets of the scheme are held separately from those of the company in an independently administered fund.
ELLIS PATENTS LIMITED
Ellis Patents Limited
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 28 FEBRUARY 2023
- 24 -
19
Capital contribution reserve
The capital contribution reserve represents the fair value of shares issued in the company's parent, Ellis Patents Holdings Limited, in respect of remuneration for employees of this company.
20
Share capital
2023
2022
2023
2022
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary shares of £1 each
40,129
40,129
40,129
40,129
Each ordinary share is entitled to one vote, and carries rights to any discretionary dividend payments but no rights to fixed income. Each share carries equal rights to any capital distributions made.
21
Profit and loss reserves
Profit and loss reserves include £248,131 (2022 - £172,040) of undistributable profit relating to revaluation gains made on the investment property, net of deferred tax liabilities.
22
Financial commitments, guarantees and contingent liabilities
At the balance sheet date the company was committed to buy €403,000 (2022 - €655,000) and $165,000 (2022-Nil) under forward exchange contracts.
23
Capital commitments
Amounts contracted for but not provided in the financial statements:
2023
2022
£
£
Acquisition of tangible fixed assets
88,345
14,015
24
Operating lease commitments
Lessee
The company is party to one significant operating lease, being for the factory which is used for manufacturing during the course of its primary trade. The lessor is the parent company, Ellis Patents Holdings Limited.
At the reporting end date the company had outstanding commitments for future minimum lease payments under non-cancellable operating leases, which fall due as follows:
2023
2022
£
£
Within one year
189,053
164,492
Between two and five years
539,430
563,806
In over five years
34,375
728,483
762,673
ELLIS PATENTS LIMITED
Ellis Patents Limited
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 28 FEBRUARY 2023
- 25 -
25
Related party transactions
Transactions with related parties
During the year the company entered into the following transactions with related parties:
Sales
Sales
2023
2022
£
£
Other related parties
594,540
284,411
The following amounts were outstanding at the reporting end date:
2023
2022
Amounts due from related parties
£
£
Other related parties
76,726
25,010
26
Directors' remuneration
2023
2022
£
£
Remuneration for qualifying services
711,613
439,261
Company pension contributions to defined contribution schemes
49,873
44,500
761,486
483,761
The number of directors for whom retirement benefits are accruing under defined contribution schemes amounted to 3 (2022 - 3).
Remuneration disclosed above include the following amounts paid to the highest paid director:
Remuneration for qualifying services
231,701
113,924
Company pension contributions to defined contribution schemes
27,454
544
27
Ultimate controlling party
The ultimate parent company and controlling party is Ellis Patents Holdings Limited. Ellis Patents Holdings Limited prepares consolidated accounts that can be obtained from its registered office at Ellis Patents Limited, High Street, Rillington, Malton, YO17 8LA.
The accounts of Ellis Patents Holdings Limited are the smallest and largest group into which this company is consolidated.
2023-02-282022-03-01falseCCH SoftwareCCH Accounts Production 2023.300Mr C J CalvertMr D MacfarlaneMr R A ShawMr J M WeavingMr R M LowishMr S A WaltonMiss K E BrownMr N J NightingaleMr N J NightingaleMrs D Holmesfalse012939832022-03-012023-02-2801293983bus:Director12022-03-012023-02-2801293983bus:Director22022-03-012023-02-2801293983bus:Director32022-03-012023-02-2801293983bus:Director42022-03-012023-02-2801293983bus:CompanySecretaryDirector12022-03-012023-02-2801293983bus:Director52022-03-012023-02-2801293983bus:Director62022-03-012023-02-2801293983bus:Director72022-03-012023-02-2801293983bus:Director82022-03-012023-02-2801293983bus:Director92022-03-012023-02-2801293983bus:CompanySecretary12022-03-012023-02-2801293983bus:RegisteredOffice2022-03-012023-02-28012939832023-02-28012939832021-03-012022-02-2801293983core:RetainedEarningsAccumulatedLosses2021-03-012022-02-2801293983core:RetainedEarningsAccumulatedLosses2022-03-012023-02-28012939832022-02-2801293983core:PlantMachinery2023-02-2801293983core:FurnitureFittings2023-02-2801293983core:ComputerEquipment2023-02-2801293983core:PlantMachinery2022-02-2801293983core:FurnitureFittings2022-02-2801293983core:ComputerEquipment2022-02-2801293983core:CurrentFinancialInstrumentscore:WithinOneYear2023-02-2801293983core:CurrentFinancialInstrumentscore:WithinOneYear2022-02-2801293983core:Non-currentFinancialInstrumentscore:AfterOneYear2023-02-2801293983core:Non-currentFinancialInstrumentscore:AfterOneYear2022-02-2801293983core:CurrentFinancialInstruments2023-02-2801293983core:CurrentFinancialInstruments2022-02-2801293983core:ShareCapital2023-02-2801293983core:ShareCapital2022-02-2801293983core:SharePremium2023-02-2801293983core:SharePremium2022-02-2801293983core:OtherMiscellaneousReserve2023-02-2801293983core:OtherMiscellaneousReserve2022-02-2801293983core:RetainedEarningsAccumulatedLosses2023-02-2801293983core:RetainedEarningsAccumulatedLosses2022-02-2801293983core:ShareCapital2021-02-2801293983core:SharePremium2021-02-2801293983core:OtherMiscellaneousReserve2021-02-2801293983core:RetainedEarningsAccumulatedLosses2021-02-28012939832021-02-2801293983core:IntangibleAssetsOtherThanGoodwill2022-03-012023-02-2801293983core:ComputerSoftware2022-03-012023-02-2801293983core:PlantMachinery2022-03-012023-02-2801293983core:FurnitureFittings2022-03-012023-02-2801293983core:ComputerEquipment2022-03-012023-02-2801293983core:UKTax2022-03-012023-02-2801293983core:UKTax2021-03-012022-02-280129398312022-03-012023-02-280129398312021-03-012022-02-280129398322022-03-012023-02-280129398322021-03-012022-02-280129398332022-03-012023-02-280129398332021-03-012022-02-280129398342022-03-012023-02-280129398342021-03-012022-02-280129398352022-03-012023-02-280129398352021-03-012022-02-2801293983core:ComputerSoftware2022-02-2801293983core:ComputerSoftware2023-02-2801293983core:ComputerSoftware2022-02-2801293983core:PlantMachinery2022-02-2801293983core:FurnitureFittings2022-02-2801293983core:ComputerEquipment2022-02-28012939832022-02-2801293983core:Non-currentFinancialInstruments12023-02-2801293983core:Non-currentFinancialInstruments12022-02-2801293983core:WithinOneYear2023-02-2801293983core:WithinOneYear2022-02-2801293983core:BetweenTwoFiveYears2023-02-2801293983core:BetweenTwoFiveYears2022-02-2801293983core:MoreThanFiveYears2023-02-2801293983core:MoreThanFiveYears2022-02-2801293983core:OtherRelatedPartiescore:SaleOrPurchaseGoods2022-03-012023-02-2801293983core:OtherRelatedPartiescore:SaleOrPurchaseGoods2021-03-012022-02-2801293983bus:PrivateLimitedCompanyLtd2022-03-012023-02-2801293983bus:FRS1022022-03-012023-02-2801293983bus:Audited2022-03-012023-02-2801293983bus:FullAccounts2022-03-012023-02-28xbrli:purexbrli:sharesiso4217:GBP