Registration number:
Advanced Tooling Systems (Group) Ltd
for the Year Ended 31 December 2022
Advanced Tooling Systems (Group) Ltd
Contents
Company Information |
|
Strategic Report |
|
Directors' Report |
|
Statement of Directors' Responsibilities |
|
Independent Auditor's Report |
|
Consolidated Profit and Loss Account |
|
Consolidated Statement of Comprehensive Income |
|
Consolidated Balance Sheet |
|
Balance Sheet |
|
Consolidated Statement of Changes in Equity |
|
Statement of Changes in Equity |
|
Consolidated Statement of Cash Flows |
|
Statement of Cash Flows |
|
Notes to the Financial Statements |
Advanced Tooling Systems (Group) Ltd
Company Information
Directors |
Mr Keith William Best Mr Adrian Gander Mr Mark Terry |
Registered office |
|
Auditors |
|
Advanced Tooling Systems (Group) Ltd
Strategic Report for the Year Ended 31 December 2022
The directors present their strategic report for the year ended 31 December 2022.
Principal activity
The principal activity of the group is the production of tooling, checking fixtures and automatic equipment for the motor, aeronautical and packaging industries in the United Kingdom and Europe.
Fair review of the business
The performance of the Group during 2022 has not been as strong as we were hoping for following the previous 2 years of difficulty. The principal problems are 2-fold, our Folkestone division has not recovered since Covid which has left us doing some major reorganisation at the end of the year to make it fit for the future. This is all now complete and we perceive this will leave this business in a much stronger position, but has made a significant effect on their figures this year. Secondly being a large user of power and the massive hike in the utility bills this has affected all parts of the group with our power bill going up over 4 times what it was the previous year, resulting in swallowing up most of the potential profits. While 2022 was not a good year, 2023 is looking very promising, enquiry levels in the second half of 2022 have been rising well with good prospects for the first half from all divisions. We are expecting the power bill to slowly come down in 2023, returning these figures back to the bottom line. The new packaging division is starting to have great success and I see great things for the future in this area.
The Group's strength is in its diversity, where we are seeing many of our competitors struggling at the beginning of 2023, we remain strong and looking to make the most of our position.
The group's key financial and other performance indicators during the year were as follows:
Financial KPIs |
Unit |
2022 |
2021 |
Return on capital employed |
% |
2 |
17 |
Debtors days |
days |
108 |
153 |
Quick (Acid Test) Ratio |
3 |
2 |
Cashflow
The business as a group has £725,313 in cash as at 24th August 2023 which is sufficient to cover its fixed costs for over 12 months.
The business also has significant production equipment and assets it can use to obtain asset backed lease funds if necessary.
The Directors believe the business has sufficient cash, customer orders and funding options to continue operating for the foreseeable future being at least 12 months from the date of these accounts.
Principal risks and uncertainties
Reduction of sales orders from customers and increasing costs of raw material coupled with lack of supply are our biggest risks. We have been managing this over the last 12 month and our feeling is this should ease through 2023. With the re-structure of the Folkestone branch, some large projects nominated for the back end of 2023, the company’s flexible work force and strong financial position, we feel in a strong position to weather any further storms.
Approved and authorised by the
Advanced Tooling Systems (Group) Ltd
Strategic Report for the Year Ended 31 December 2022
......................................... |
Advanced Tooling Systems (Group) Ltd
Directors' Report for the Year Ended 31 December 2022
The directors present their report and the for the year ended 31 December 2022.
Directors of the group
The directors who held office during the year were as follows:
Future developments
The UKs economic growth in 2022 has been very flat and slightly below Europe, showing we are still suffering from our Brexit decision. The market is now also having to deal with much higher interest rates which will slow down future investments. The beginning of 2023 has seen some significant growth in our aerospace customers which we still see as a good growth area. Automotive is also now starting to make some movement as JLR have 3 new models kicking off in 2023 and 2024. Our packaging division will continue to grow with exciting announcements of a new collaboration with a Dutch company to sell and service their equipment within the UK and Ireland. Following significant investment in the Maidstone division with the purchase and installation of 4 new CNC machines, 2023 will be a lower year for investment.
Going concern
The group's business is an engineering company specialising in bespoke production machinery in the Automotive industry, full mock up for the interiors of the aircraft industry, injection tooling and white goods industry and has grown revenue and been profitable for the past 10 years. The group has a customer base of OEM in the car industry and First Tier suppliers of whom are all international companies. The group offers products to all its customers and has strong relationships with all of them. Revenue is spread across the customers with the automotive sector customers accounting for approx. 50%, Aircraft industry approx. 25%, the remaining 25% made up of white goods / building industry / electrical / personal safety equipment of 2022/23 revenue. Further detail about current uncertainty and going concern are in the strategic report.
Disclosure of information to the auditor
Each director has taken steps that they ought to have taken as a director in order to make themselves aware of any relevant audit information and to establish that the company's auditor is aware of that information. The directors confirm that there is no relevant information that they know of and of which they know the auditor is unaware.
Reappointment of auditors
In accordance with section 485 of the Companies Act 2006, a resolution for the re-appointment of Pure Audit Limited as auditors of the company is to be proposed at the forthcoming Annual General Meeting.
Approved and authorised by the
......................................... |
Advanced Tooling Systems (Group) Ltd
Statement of Directors' Responsibilities
The directors acknowledge their responsibilities for preparing the Annual Report and the financial statements in accordance with applicable law and regulations.
Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the group and the company and of the profit or loss of the group for that period. In preparing these financial statements, the directors are required to:
• |
select suitable accounting policies and apply them consistently; |
• |
make judgements and accounting estimates that are reasonable and prudent; |
• |
state whether applicable UK Accounting Standards have been followed, subject to any material departures disclosed and explained in the financial statements; and |
• |
prepare the financial statements on the going concern basis unless it is inappropriate to presume that the company will continue in business. |
The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the group's and the company's transactions and disclose with reasonable accuracy at any time the financial position of the group and the company and enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the group and the company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
Advanced Tooling Systems (Group) Ltd
Independent Auditor's Report to the Members of Advanced Tooling Systems (Group) Ltd
Opinion
We have audited the financial statements of Advanced Tooling Systems (Group) Ltd (the 'parent company') and its subsidiaries (the 'group') for the year ended 31 December 2022, which comprise the Consolidated Profit and Loss Account, Consolidated Statement of Comprehensive Income, Consolidated Balance Sheet, Balance Sheet, Consolidated Statement of Changes in Equity, Statement of Changes in Equity, Consolidated Statement of Cash Flows, Statement of Cash Flows, and Notes to the Financial Statements, including a summary of significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland' (United Kingdom Generally Accepted Accounting Practice).
In our opinion the financial statements:
• | give a true and fair view of the state of the group's and the parent company's affairs as at 31 December 2022 and of the group's profit for the year then ended; |
• | have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and |
• | have been prepared in accordance with the requirements of the Companies Act 2006. |
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the auditor responsibilities for the audit of the financial statements section of our report. We are independent of the group in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC’s Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Conclusions relating to going concern
In auditing the financial statements, we have concluded that the director's use of the going concern basis of accounting in the preparation of the financial statements is appropriate.
Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the group's ability to continue as a going concern for a period of at least twelve months from when the original financial statements were authorised for issue.
Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.
Other information
The directors are responsible for the other information. The other information comprises the information included in the annual report, other than the financial statements and our auditor’s report thereon. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon.
In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether there is a material misstatement in the financial statements or a material misstatement of the other information. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.
Advanced Tooling Systems (Group) Ltd
Independent Auditor's Report to the Members of Advanced Tooling Systems (Group) Ltd
We have nothing to report in this regard.
Opinion on other matter prescribed by the Companies Act 2006
In our opinion, based on the work undertaken in the course of the audit:
• |
the information given in the Strategic Report and Directors' Report for the financial year for which the financial statements are prepared is consistent with the financial statements; and |
• |
the Strategic Report and Directors' Report have been prepared in accordance with applicable legal requirements. |
Matters on which we are required to report by exception
In the light of our 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 and the Directors' Report.
We have nothing to report in respect of the following matters where the Companies Act 2006 requires us to report to you if, in our opinion:
• | adequate accounting records have not been kept by the parent company, or returns adequate for our audit have not been received from branches not visited by us; or |
• | the parent company financial statements are not in agreement with the accounting records and returns; or |
• | certain disclosures of directors' remuneration specified by law are not made; or |
• | we have not received all the information and explanations we require for our audit. |
Responsibilities of directors
As explained more fully in the Statement of Directors' Responsibilities [set out on page 5], 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 Responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.
The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below:
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below:
Advanced Tooling Systems (Group) Ltd
Independent Auditor's Report to the Members of Advanced Tooling Systems (Group) Ltd
Extent to which the audit was considered capable of detecting irregularities, including fraud:
We identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, and then design and perform audit procedures responsive to those risks, including obtaining audit evidence that is sufficient and appropriate to provide a basis for our opinion.
Identifying and assessing potential risks related to irregularities:
In identifying and assessing risks of material misstatement in respect of irregularities, including fraud and non-compliance with laws and regulations, we considered the following:
The nature of the industry and sector, control environment and business performance including the design of the Company’s remuneration policies, key drivers for directors’ remuneration, bonus levels and performance targets; results of our enquiries of management about their own identification and assessment of the risks of irregularities and any matters we identified having reviewed the Company’s policies and procedures; the matters discussed among the audit engagement team regarding how and where fraud might occur in the financial statements and any potential indicators of fraud.
As a result of these procedures, we considered the opportunities and incentives that may exist within the organisation for fraud and identified the greatest potential for fraud in relation to revenue recognition. In common with all audits under ISAs (UK), we are also required to perform specific procedures to respond to the risk of management override.
We also obtained an understanding of the legal and regulatory frameworks that the Company operates in and focused on those laws and regulations that had a direct effect on the determination of material amounts and disclosures in the financial statements. The key laws and regulations we considered in this context included the Companies Act 2006 and local tax legislation.
Audit response to risks identified
As a result of performing the above, we identified revenue recognition as key audit matter related to the potential risk of fraud. Our procedures to respond to risks identified included the following:
- reviewing the financial statement disclosures and testing to supporting documentation to assess compliance with provisions of relevant laws and regulations described as having a direct effect on the financial statements;
- enquiring of management, concerning actual and potential litigation and claims;
- performing analytical procedures to identify any unusual or unexpected relationships that may indicate risks of material misstatement due to fraud;
- obtaining an understanding of provisions and discussing with management to understand the basis of recognition or non-recognition of tax provisions; and in addressing the risk of fraud through management override of controls, testing the appropriateness of journal entries and other adjustments; assessing whether the judgements made in making accounting estimates are indicative of a potential bias; and evaluating the business rationale of any significant transactions that are unusual or outside the normal course of business.
We also communicated relevant identified laws and regulations and potential fraud risks to all engagement team members and remained alert to any indications of fraud or noncompliance with laws and regulations throughout the audit.
Advanced Tooling Systems (Group) Ltd
Independent Auditor's Report to the Members of Advanced Tooling Systems (Group) Ltd
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 is also greater regarding irregularities occurring due to fraud rather than error, as fraud involves intentional concealment, forgery, collusion, omission or misrepresentation.
A further description of our responsibilities is available on the Financial Reporting Council’s website at: www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor’s report.
Use of our report
This report is made solely to the company’s members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the company’s members those matters we are required to state to them in an auditor’s report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company’s members as a body, for our audit work, for this report, or for the opinions we have formed.
......................................
For and on behalf of
76 Canterbury Innovation Centre
University Road
Kent
CT2 7FG
Advanced Tooling Systems (Group) Ltd
Consolidated Profit and Loss Account for the Year Ended 31 December 2022
Note |
2022 |
2021 |
|
Turnover |
|
|
|
Cost of sales |
( |
( |
|
Gross profit |
|
|
|
Administrative expenses |
( |
( |
|
Other operating income |
- |
|
|
Operating profit |
|
|
|
Other interest receivable and similar income |
|
|
|
Interest payable and similar expenses |
( |
( |
|
(22,605) |
(40,522) |
||
Profit before tax |
|
|
|
Tax on profit |
|
( |
|
Profit for the financial year |
|
|
|
Profit/(loss) attributable to: |
|||
Owners of the company |
|
|
Advanced Tooling Systems (Group) Ltd
Consolidated Statement of Comprehensive Income for the Year Ended 31 December 2022
2022 |
2021 |
|
Profit for the year |
|
|
Total comprehensive income for the year |
|
|
Total comprehensive income attributable to: |
||
Owners of the company |
|
|
Advanced Tooling Systems (Group) Ltd
(Registration number: 11459949)
Consolidated Balance Sheet as at 31 December 2022
Note |
2022 |
2021 |
|
Fixed assets |
|||
Intangible assets |
|
|
|
Tangible assets |
|
|
|
|
|
||
Current assets |
|||
Stocks |
|
|
|
Debtors |
|
|
|
Cash at bank and in hand |
|
|
|
|
|
||
Creditors: Amounts falling due within one year |
( |
( |
|
Net current assets |
|
|
|
Total assets less current liabilities |
|
|
|
Creditors: Amounts falling due after more than one year |
( |
( |
|
Provisions for liabilities |
( |
( |
|
Net assets |
|
|
|
Capital and reserves |
|||
Called up share capital |
40,594 |
40,594 |
|
Other reserves |
671,965 |
671,965 |
|
Retained earnings |
4,289,740 |
4,365,604 |
|
Equity attributable to owners of the company |
5,002,299 |
5,078,163 |
|
Shareholders' funds |
5,002,299 |
5,078,163 |
Approved and authorised by the
......................................... |
Advanced Tooling Systems (Group) Ltd
(Registration number: 11459949)
Balance Sheet as at 31 December 2022
Note |
2022 |
2021 |
|
Fixed assets |
|||
Investments |
|
|
|
Current assets |
|||
Debtors |
|
|
|
Cash at bank and in hand |
|
|
|
|
|
||
Creditors: Amounts falling due within one year |
( |
- |
|
Net current assets |
|
|
|
Net assets |
|
|
|
Capital and reserves |
|||
Called up share capital |
40,594 |
40,594 |
|
Retained earnings |
925,698 |
914,307 |
|
Shareholders' funds |
966,292 |
954,901 |
Approved and authorised by the
......................................... |
Advanced Tooling Systems (Group) Ltd
Consolidated Statement of Changes in Equity for the Year Ended 31 December 2022
Equity attributable to the parent company
Share capital |
Merger reserve |
Other reserves |
Retained earnings |
Total |
Total equity |
|
At 1 January 2022 |
|
( |
|
|
|
|
Profit for the year |
- |
- |
- |
|
|
|
Dividends |
- |
- |
- |
( |
( |
( |
At 31 December 2022 |
|
( |
|
|
|
|
Share capital |
Merger reserve |
Other reserves |
Retained earnings |
Total |
Total equity |
|
At 1 January 2021 |
|
( |
|
|
|
|
Profit for the year |
- |
- |
- |
|
|
|
Dividends |
- |
- |
- |
( |
( |
( |
At 31 December 2021 |
|
( |
|
|
|
|
Advanced Tooling Systems (Group) Ltd
Statement of Changes in Equity for the Year Ended 31 December 2022
Share capital |
Retained earnings |
Total |
|
At 1 January 2022 |
|
|
|
Profit for the year |
- |
|
|
Dividends |
- |
( |
( |
At 31 December 2022 |
|
|
|
Share capital |
Retained earnings |
Total |
|
At 1 January 2021 |
|
|
|
Profit for the year |
- |
|
|
Dividends |
- |
( |
( |
At 31 December 2021 |
|
|
|
Advanced Tooling Systems (Group) Ltd
Consolidated Statement of Cash Flows for the Year Ended 31 December 2022
Note |
2022 |
2021 |
|
Cash flows from operating activities |
|||
Profit for the year |
|
|
|
Adjustments to cash flows from non-cash items |
|||
Depreciation and amortisation |
|
|
|
Loss on disposal of tangible assets |
|
- |
|
Finance income |
( |
( |
|
Finance costs |
|
|
|
Income tax expense |
( |
|
|
Negative goodwill released |
- |
(188,324) |
|
|
|
||
Working capital adjustments |
|||
Increase in stocks |
( |
( |
|
Decrease/(increase) in trade debtors |
|
( |
|
(Decrease)/increase in trade creditors |
( |
|
|
Cash generated from operations |
|
|
|
Income taxes paid |
( |
( |
|
Net cash flow from operating activities |
|
|
|
Cash flows from investing activities |
|||
Interest received |
|
|
|
Acquisitions of tangible assets |
( |
( |
|
Proceeds from sale of tangible assets |
|
- |
|
Net cash flows from investing activities |
( |
( |
|
Cash flows from financing activities |
|||
Interest paid |
( |
( |
|
Proceeds from bank borrowing draw downs |
( |
( |
|
New Loan received |
- |
500,000 |
|
Payments to finance lease creditors |
( |
( |
|
Dividends paid |
( |
( |
|
Net cash flows from financing activities |
( |
( |
|
Net increase/(decrease) in cash and cash equivalents |
|
( |
|
Cash and cash equivalents at 1 January |
|
|
|
Cash and cash equivalents at 31 December |
1,126,175 |
873,470 |
Advanced Tooling Systems (Group) Ltd
Statement of Cash Flows for the Year Ended 31 December 2022
Note |
2022 |
2021 |
|
Cash flows from operating activities |
|||
Profit for the year |
|
|
|
Adjustments to cash flows from non-cash items |
|||
Finance income |
( |
( |
|
( |
( |
||
Working capital adjustments |
|||
Increase in trade debtors |
( |
( |
|
Increase in trade creditors |
|
- |
|
Net cash flow from operating activities |
( |
( |
|
Cash flows from investing activities |
|||
Dividend income |
|
|
|
Cash flows from financing activities |
|||
Dividends paid |
( |
( |
|
Net increase in cash and cash equivalents |
|
|
|
Cash and cash equivalents at 1 January |
|
|
|
Cash and cash equivalents at 31 December |
22,768 |
11,840 |
Advanced Tooling Systems (Group) Ltd
Notes to the Financial Statements for the Year Ended 31 December 2022
General information |
The company is a private company limited by share capital, incorporated in England and Wales.
The address of its registered office is:
England
These financial statements were authorised for issue by the
Accounting policies |
Summary of significant accounting policies and key accounting estimates
The principal accounting policies applied in the preparation of these financial statements are set out below. These policies have been consistently applied to all the years presented, unless otherwise stated.
Statement of compliance
These financial statements were prepared in accordance with Financial Reporting Standard 102 'The Financial Reporting Standard applicable in the United Kingdom and Republic of Ireland and the Companies Act 2006'.
Basis of preparation
These financial statements have been prepared using the historical cost convention except that as disclosed in the accounting policies certain items are shown at fair value.
Basis of consolidation
The consolidated financial statements consolidate the financial statements of the company and its subsidiary undertakings drawn up to 31 December 2022.
Advanced Tooling Systems (Group) Ltd
Notes to the Financial Statements for the Year Ended 31 December 2022
A subsidiary is an entity controlled by the company. Control is achieved where the company has the power to govern the financial and operating policies of an entity so as to obtain benefits from its activities.
The results of subsidiaries acquired or disposed of during the year are included in the Profit and Loss Account from the effective date of acquisition or up to the effective date of disposal, as appropriate. Where necessary, adjustments are made to the financial statements of subsidiaries to bring their accounting policies into line with those used by the group.
The purchase method of accounting is used to account for business combinations that result in the acquisition of subsidiaries by the group. The cost of a business combination is measured as the fair value of the assets given, equity instruments issued and liabilities incurred or assumed at the date of exchange, plus costs directly attributable to the business combination. Identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are measured initially at their fair values at the acquisition date. Any excess of the cost of the business combination over the acquirer’s interest in the net fair value of the identifiable assets, liabilities and contingent liabilities recognised is recorded as goodwill.
Inter-company transactions, balances and unrealised gains on transactions between the company and its subsidiaries, which are related parties, are eliminated in full.
Intra-group losses are also eliminated but may indicate an impairment that requires recognition in the consolidated financial statements.
Accounting policies of subsidiaries have been changed where necessary to ensure consistency with the policies adopted by the group. Non-controlling interests in the net assets of consolidated subsidiaries are identified separately from the group’s equity therein. Non-controlling interests consist of the amount of those interests at the date of the original business combination and the non-controlling shareholder’s share of changes in equity since the date of the combination.
Going concern
The Group's forecasts and projections, taking account of reasonably possible changes in trading performance, show that the Group should be able to operate within the level of its current facilities. After making enquiries, the directors have a reasonable expectation that the Group has adequate resources to continue in operational existence for the foreseeable future. The Group therefore continues to adopt the going concern basis in preparing its financial statements.
Advanced Tooling Systems (Group) Ltd
Notes to the Financial Statements for the Year Ended 31 December 2022
Judgements
The preparation of financial statements requires the use of certain critical accounting estimates. It also requires management to exercise its judgement in the process of applying the Group and Company accounting policies. The areas involving a higher degree of judgement or complexity, or areas where assumptions and estimates are significant to the financial statements, are disclosed in Critical accounting judgement and estimation uncertainty note. |
Key sources of estimation uncertainty
Estimates and judgements are continually evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances..
The Group makes estimates and assumptions concerning the future. The resulting accounting estimates will, by definition, seldom equal the related actual results. The estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are addressed below.
i) Impairment of intangible assets and goodwill
The Group considers whether intangible assets and / or goodwill are impaired. Where an indication of impairment is identified, the estimation of recoverable value requires estimation of the recoverable value of the cash generating units (CGUs). This requires estimation of the future cash flows from the CGUs and also selection of appropriate discount rates in order to calculate the net present value of those cash flows.
ii) Useful economic lives of tangible assets and goodwill
The annual depreciation and amortisation charge for tangible assets and goodwill is sensitive to changes in estimated useful economic lives and residual values of assets. The useful economic lives and residual values are re-assessed annually. The are amended when necessary to reflect current estimates, based on technological advancement, future investments, economic utilisation and physical condition of the assets. See notes 13 and 14 for the carrying amounts of tangible assets and goodwill and note 2 for the useful economic lives of each class of assets.
iii) Impairment of debtors
The Group makes an estimate of the recoverable value of trade and other debtors. When assessing impairment of trade and other debtors, management considers factors including the current credit rating of the debtors, the ageing profile of debtors and historical experience. See note 17 for the net carrying amount of the debtors and associated impairment provision.
.
Revenue recognition
Turnover comprises the fair value of the consideration received or receivable for the sale of goods and provision of services in the ordinary course of the group’s activities. Turnover is shown net of sales/value added tax, returns, rebates and discounts and after eliminating sales within the group.
The group recognises revenue when:
The amount of revenue can be reliably measured;
it is probable that future economic benefits will flow to the entity;
and specific criteria have been met for each of the group's activities.
Contract revenue recognition
Amounts recoverable on contracts are stated at the expected selling price attainable at the year end and represent work in progress that has not been billed at the year end.
Advanced Tooling Systems (Group) Ltd
Notes to the Financial Statements for the Year Ended 31 December 2022
Government grants
Government grants have been accounted for using the accruals model. Coronavirus Job Retention Scheme grants were received by the company to the value of £302,655 (2020: £441,281). Business Rates Relief grant was received by the company to the value of £45,000 (2020: £0.00). Coronavirus Business Interruption Loan Scheme grant was received by the company to the value of £7,676 (2020: £0.00)
Foreign currency transactions and balances
Foreign currency transactions are translated into the functional currency using the exchange rates ruling at the dates of the transactions.
At each period end foreign currency monetary items are translated using the closing rate. Non-monetary items measured at historical cost are translated using the exchange rate at the date of the transaction and non-monetary items measured at fair value are measured using the exchange rate when fair value was determined.
Foreign exchange gains and losses resulting from the settlement of transactions and from the translation at period-end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in the profit and loss account.
Tax
The tax expense for the period comprises current and deferred tax. Tax is recognised in profit or loss, except that a change attributable to an item of income or expense recognised as other comprehensive income is also recognised directly in other comprehensive income.
The current income tax charge is calculated on the basis of tax rates and laws that have been enacted or substantively enacted by the reporting date in the countries where the group operates and generates taxable income.
Deferred tax is recognised in respect of all timing differences between taxable profits and profits reported in the consolidated financial statements.
Unrelieved tax losses and other deferred tax assets are recognised when it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits.
Deferred tax is measured using tax rates and laws that have been enacted or substantively enacted by the reporting date and that are expected to apply to the reversal of the timing difference.
Tangible assets
Tangible assets are stated in the balance sheet at cost, less any subsequent accumulated depreciation and subsequent accumulated impairment losses.
The cost of tangible assets includes directly attributable incremental costs incurred in their acquisition and installation.
Depreciation
Depreciation is charged so as to write off the cost of assets, other than land and properties under construction over their estimated useful lives, as follows:
Advanced Tooling Systems (Group) Ltd
Notes to the Financial Statements for the Year Ended 31 December 2022
Asset class |
Depreciation method and rate |
Freehold Property |
2% on cost |
Short Leasehold |
Straight Line over 25 years |
Plant and machinery |
25% on reducing balance and 15% on reducing balance |
Furniture and fittings |
25% on reducing balance and 15% on reducing balance |
Motor vehicles |
25% on reducing balance |
Computer equipment |
50% on cost and 33% on reducing balance |
Merger accounting
Goodwill
Goodwill, being the amount paid on acquisition of business by Advanced Tooling Systems UK Limited in 2003, 2006 and 2007 is being amortised evenly over its estimated useful life of twenty years.
The directors have carried out an impairment review of the goodwill in ATS UK Ltd balance sheet and are of the opinion that the recoverable amount, based on expected future cash flows, is not materially different from the book value. The directors believe that the remaining life of 3.5 years as at 31 December 2022 is a reasonable estimate of the period over which the economic benefits are expected to flow to the Group.
Amortisation
Amortisation is provided on intangible assets so as to write off the cost, less any estimated residual value, over their useful life as follows:
Asset class |
Amortisation method and rate |
Computer software |
20% on cost |
Cash and cash equivalents
Cash and cash equivalents comprise cash on hand and call deposits, and other short-term highly liquid investments that are readily convertible to a known amount of cash and are subject to an insignificant risk of change in value.
Trade debtors
Trade debtors are amounts due from customers for merchandise sold or services performed in the ordinary course of business.
Trade debtors are recognised initially at the transaction price. They are subsequently measured at amortised cost using the effective interest method, less provision for impairment. A provision for the impairment of trade debtors is established when there is objective evidence that the group will not be able to collect all amounts due according to the original terms of the receivables.
Stocks
Inventories are valued at the lower of cost and net realisable value, after making due allowance for obsolete and slow moving items.
Advanced Tooling Systems (Group) Ltd
Notes to the Financial Statements for the Year Ended 31 December 2022
Trade creditors
Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Accounts payable are classified as current liabilities if the group does not have an unconditional right, at the end of the reporting period, to defer settlement of the creditor for at least twelve months after the reporting date. If there is an unconditional right to defer settlement for at least twelve months after the reporting date, they are presented as non-current liabilities.
Trade creditors are recognised initially at the transaction price and subsequently measured at amortised cost using the effective interest method.
Borrowings
Interest-bearing borrowings are initially recorded at fair value, net of transaction costs. Interest-bearing borrowings are subsequently carried at amortised cost, with the difference between the proceeds, net of transaction costs, and the amount due on redemption being recognised as a charge to the profit and loss account over the period of the relevant borrowing.
Interest expense is recognised on the basis of the effective interest method and is included in interest payable and similar charges.
Borrowings are classified as current liabilities unless the group has an unconditional right to defer settlement of the liability for at least twelve months after the reporting date.
Leases
Leases in which substantially all the risks and rewards of ownership are retained by the lessor are classified as operating leases. Payments made under operating leases are charged to profit or loss on a straight-line basis over the period of the lease.
Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessee.
Assets held under finance leases are recognised at the lower of their fair value at inception of the lease and the present value of the minimum lease payments. These assets are depreciated on a straight-line basis over the shorter of the useful life of the asset and the lease term. The corresponding liability to the lessor is included in the balance sheet as a finance lease obligation.
Lease payments are apportioned between finance costs in the profit and loss account and reduction of the lease obligation so as to achieve a constant periodic rate of interest on the remaining balance of the liability.
Share capital
Ordinary shares are classified as equity. Equity instruments are measured at the fair value of the cash or other resources received or receivable, net of the direct costs of issuing the equity instruments. If payment is deferred and the time value of money is material, the initial measurement is on a present value basis.
Dividends
Dividend distribution to the group’s shareholders is recognised as a liability in the financial statements in the reporting period in which the dividends are declared.
Advanced Tooling Systems (Group) Ltd
Notes to the Financial Statements for the Year Ended 31 December 2022
Defined contribution pension obligation
A defined contribution plan is a pension plan under which fixed contributions are paid into a pension fund and the group has no legal or constructive obligation to pay further contributions even if the fund does not hold sufficient assets to pay all employees the benefits relating to employee service in the current and prior periods.
Contributions to defined contribution plans are recognised as employee benefit expense when they are due. If contribution payments exceed the contribution due for service, the excess is recognised as a prepayment.
Share based payments
The group operates an equity-settled, share-based compensation plan, under which the entity receives services from employees as consideration for equity instruments (options) of the entity. The fair value of the employee services received is measured by reference to the estimated fair value at the grant date of equity instruments granted and is recognised as an expense over the vesting period. The estimated fair value of the option granted is calculated using the Black Scholes option pricing model. The total amount expensed is recognised over the vesting period, which is the period over which all of the specified vesting conditions are to be satisfied.
The proceeds received net of any directly attributable transaction costs are credited to share capital (nominal value) and share premium when the options are exercised.
Other operating income |
The analysis of the group's other operating income for the year is as follows:
2022 |
2021 |
|
Government grants |
- |
|
Miscellaneous other operating income |
- |
|
- |
|
Other gains and losses |
The analysis of the group's other gains and losses for the year is as follows:
2022 |
2021 |
|
Loss on disposal of Tangible assets |
( |
- |
Operating profit |
Arrived at after charging/(crediting)
2022 |
2021 |
|
Depreciation expense |
|
|
Amortisation expense |
|
|
Operating lease expense - plant and machinery |
|
|
Operating lease expense - other |
|
|
Loss on disposal of property, plant and equipment |
|
- |
Advanced Tooling Systems (Group) Ltd
Notes to the Financial Statements for the Year Ended 31 December 2022
Interest payable and similar expenses |
2022 |
2021 |
|
Interest on bank overdrafts and borrowings |
|
|
Interest on obligations under finance leases and hire purchase contracts |
|
|
|
|
Staff costs |
The aggregate payroll costs (including directors' remuneration) were as follows:
2022 |
2021 |
|
Wages and salaries |
|
|
Social security costs |
|
|
Pension costs, defined contribution scheme |
|
|
Redundancy costs |
- |
|
Share-based payment expenses |
|
- |
|
|
The average number of persons employed by the group (including directors) during the year, analysed by category was as follows:
2022 |
2021 |
|
Production |
|
|
Administration and support |
|
|
Other departments |
|
|
|
|
Directors' remuneration |
The directors' remuneration for the year was as follows:
2022 |
2021 |
|
Remuneration |
|
|
Contributions paid to money purchase schemes |
|
|
39,087 |
37,908 |
Advanced Tooling Systems (Group) Ltd
Notes to the Financial Statements for the Year Ended 31 December 2022
Taxation |
Tax charged/(credited) in the consolidated profit and loss account
2022 |
2021 |
|
Current taxation |
||
UK corporation tax |
- |
|
UK corporation tax adjustment to prior periods |
( |
( |
(119,816) |
72,399 |
|
Deferred taxation |
||
Arising from origination and reversal of timing differences |
|
|
Tax (receipt)/expense in the income statement |
( |
|
The tax on profit before tax for the year is the same as the standard rate of corporation tax in the UK (2021 - the same as the standard rate of corporation tax in the UK) of
The differences are reconciled below:
2022 |
2021 |
|
Profit before tax |
|
|
Corporation tax at standard rate |
|
|
Effect of revenues exempt from taxation |
- |
( |
Effect of expense not deductible in determining taxable profit (tax loss) |
|
|
Deferred tax expense from unrecognised tax loss or credit |
|
|
Decrease in UK and foreign current tax from adjustment for prior periods |
( |
( |
Tax decrease from effect of capital allowances and depreciation |
( |
( |
Tax increase from effect of unrelieved tax losses carried forward |
|
- |
Tax decrease arising from group relief |
( |
- |
Total tax (credit)/charge |
( |
|
Intangible assets |
Group
Advanced Tooling Systems (Group) Ltd
Notes to the Financial Statements for the Year Ended 31 December 2022
Goodwill |
Other intangible assets |
Total |
|
Cost or valuation |
|||
At 1 January 2022 |
( |
|
( |
At 31 December 2022 |
( |
|
( |
Amortisation |
|||
At 1 January 2022 |
( |
|
( |
Amortisation charge |
|
- |
|
At 31 December 2022 |
( |
|
( |
Carrying amount |
|||
At 31 December 2022 |
|
- |
|
At 31 December 2021 |
|
- |
|
Advanced Tooling Systems (Group) Ltd
Notes to the Financial Statements for the Year Ended 31 December 2022
Tangible assets |
Group
Land and buildings |
Furniture, fittings and equipment |
Motor vehicles |
Other tangible assets |
Total |
|
Cost or valuation |
|||||
At 1 January 2022 |
|
|
|
|
|
Additions |
- |
|
- |
|
|
Disposals |
- |
- |
- |
( |
( |
At 31 December 2022 |
|
|
|
|
|
Depreciation |
|||||
At 1 January 2022 |
|
|
|
|
|
Charge for the year |
|
|
|
|
|
Eliminated on disposal |
- |
- |
- |
( |
( |
At 31 December 2022 |
|
|
|
|
|
Carrying amount |
|||||
At 31 December 2022 |
|
|
|
|
|
At 31 December 2021 |
|
|
|
|
|
Included within the net book value of land and buildings above is £256,422 (2021 - £263,921) in respect of freehold land and buildings and £35,719 (2021 - £44,603) in respect of short leasehold land and buildings and £803,348 (2021 - £826,495) in respect of long leasehold land and buildings. The long leasehold property is on 100 years lease from Feb 1979 to Feb 2078.
Advanced Tooling Systems (Group) Ltd
Notes to the Financial Statements for the Year Ended 31 December 2022
Investments |
Group
Details of undertakings
For the year ending 31 December 2022 the following subsidiaries were entitled to exemption from audit under section 479A of the Companies Act 2006 relating to subsidiary companies:
ATS Automation Limited |
ATS (Folkestone) Limited |
ATS Mouldings Limited |
Advanced Tooling Systems (Holdings) Ltd |
Company
2022 |
2021 |
|
Investments in subsidiaries |
|
|
Subsidiaries |
£ |
Cost or valuation |
|
At 1 January 2022 |
|
Provision |
|
Carrying amount |
|
At 31 December 2022 |
|
At 31 December 2021 |
|
Stocks |
Group |
Company |
|||
2022 |
2021 |
2022 |
2021 |
|
Other inventories |
|
|
- |
- |
Group
Advanced Tooling Systems (Group) Ltd
Notes to the Financial Statements for the Year Ended 31 December 2022
Debtors |
Group |
Company |
||||
Note |
2022 |
2021 |
2022 |
2021 |
|
Trade debtors |
|
|
- |
- |
|
Other debtors |
|
|
|
|
|
Prepayments |
|
|
- |
- |
|
Gross amount due from customers for contract work |
|
|
- |
- |
|
Income tax asset |
|
- |
- |
- |
|
|
|
|
|
Cash and cash equivalents |
Group |
Company |
|||
2022 |
2021 |
2022 |
2021 |
|
Cash on hand |
|
|
|
|
Cash at bank |
|
|
|
|
Short-term deposits |
|
|
- |
- |
|
|
|
|
Creditors |
Group |
Company |
||||
Note |
2022 |
2021 |
2022 |
2021 |
|
Due within one year |
|||||
Loans and borrowings |
|
|
- |
- |
|
Trade creditors |
|
|
- |
- |
|
Amounts due to related parties |
- |
|
|
- |
|
Social security and other taxes |
|
|
|
- |
|
Other payables |
|
|
- |
- |
|
Accruals |
|
|
- |
- |
|
Income tax liability |
- |
119,816 |
- |
- |
|
|
|
|
- |
||
Due after one year |
|||||
Loans and borrowings |
|
|
- |
- |
Advanced Tooling Systems (Group) Ltd
Notes to the Financial Statements for the Year Ended 31 December 2022
Pension and other schemes |
Defined contribution pension scheme
The group operates a defined contribution pension scheme. The pension cost charge for the year represents contributions payable by the group to the scheme and amounted to £
Contributions totalling £8,829 (2021: £7,024) were payable to the scheme at the end of the year and are included in creditors.
Share capital |
Allotted, called up and fully paid shares
2022 |
2021 |
|||
No. |
£ |
No. |
£ |
|
|
|
40,514 |
|
40,514 |
|
|
38 |
|
38 |
|
|
6 |
|
6 |
|
|
18 |
|
18 |
|
|
18 |
|
18 |
|
|
|
|
Loans and borrowings |
Group |
Company |
|||
2022 |
2021 |
2022 |
2021 |
|
Non-current loans and borrowings |
||||
Bank borrowings |
|
|
- |
- |
Finance lease liabilities |
|
|
- |
- |
|
|
- |
- |
Advanced Tooling Systems (Group) Ltd
Notes to the Financial Statements for the Year Ended 31 December 2022
Group |
Company |
|||
2022 |
2021 |
2022 |
2021 |
|
Current loans and borrowings |
||||
Bank borrowings |
|
|
- |
- |
Finance lease liabilities |
|
|
- |
- |
|
|
- |
- |
Group
Bank borrowings
|
|
National Westminster Bank plc holds an Unscheduled Mortgage Debenture dated 31st July 2003 incorporating a fixed and floating charge over all current and future assets of a subsidiary, Advanced Tooling Systems UK Ltd.
The Bank Loan is secured against the Land & Buildings at Coldred Road, Maidstone, Kent and its associated assets. The charge was created on 30th October 2007. The property is owned by Advanced Tooling Systems UK Ltd.
Obligations under leases and hire purchase contracts |
Group
Finance leases
The total of future minimum lease payments is as follows:
2022 |
2021 |
|
Not later than one year |
|
|
Later than one year and not later than five years |
|
|
|
|
Operating leases
The total of future minimum lease payments is as follows:
2022 |
2021 |
|
Not later than one year |
|
|
Later than one year and not later than five years |
|
|
|
|
Advanced Tooling Systems (Group) Ltd
Notes to the Financial Statements for the Year Ended 31 December 2022
The amount of non-cancellable operating lease payments recognised as an expense during the year was £
Dividends |
Interim dividends paid
2022 |
2021 |
|||
Interim dividend of £ |
|
|
||
Interim dividend of £Nil per each |
- |
- |
||
Interim dividend of £ |
|
|
||
|
|
Related party transactions |
Group
Advanced Tooling Systems (Group) Ltd
Notes to the Financial Statements for the Year Ended 31 December 2022
Transactions with directors |
2022 |
At 1 January 2022 |
Advances to director |
Repayments by director |
At 31 December 2022 |
Mr Mark Terry |
||||
Loan from the company repayable at £262.50 per month at 0% |
- |
( |
|
( |
Advanced Tooling Systems (Group) Ltd
Notes to the Financial Statements for the Year Ended 31 December 2022
Dividends paid to directors
2022 |
2021 |
|||
Mr Keith William Best |
||||
Dividends paid to director |
37,174 |
38,267 |
||
Mr Adrian Gander |
||||
Dividends paid to director |
92,934 |
95,667 |
||
Mr Mark Terry |
||||
Dividends paid to director |
82,130 |
76,639 |
||
Parent and ultimate parent undertaking |