Company registration number 00411322 (England and Wales)
ROYSTON LEAD LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
Faulkner House
Victoria Street
Rayner Essex LLP
St Albans
Chartered Accountants
Hertfordshire
AL1 3SE
ROYSTON LEAD LIMITED
COMPANY INFORMATION
Directors
Mr I Crabbe
Mr M E Sherling
Mr D A J Rintoul
Mr G C Hudson
Mr B H Smith
Company number
00411322
Registered office
Pogmoor Works
Stocks Lane
Barnsley
South Yorkshire
S75 2DS
Auditor
Rayner Essex LLP
Faulkner House
Victoria Street
St Albans
Hertfordshire
AL1 3SE
ROYSTON LEAD LIMITED
CONTENTS
Page
Strategic report
1 - 2
Directors' report
3 - 4
Independent auditor's report
5 - 7
Profit and loss account
8
Statement of comprehensive income
9
Balance sheet
10
Statement of changes in equity
11
Notes to the financial statements
12 - 29
ROYSTON LEAD LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 31 DECEMBER 2022
- 1 -
The directors present the strategic report for the year ended 31 December 2022.
Fair review of the business
Results in the previous year saw the delayed impact of Covid which filtered through the markets served by the company and adversely impacted its results. Operating results in the current year saw some improvement as activity picked up, though given the long-term nature of the project-based work carried out by the Company it was not yet back to normalised levels in the year. In addition, the company's results were impacted by certain costs of market and product development incurred in the year for the future growth of the business.
Principal risks and uncertainties
The principal risks and uncertainties faced by the company in the view of the directors are as follows:
Liquidity risk
The board manages liquidity risk by a combination of controls such as the monitoring of gearing levels and ensuring that facilities are readily available for use.
Price risk
The industry in which the company operates is greatly affected by the price of lead of which is outside the control of the company as it is dictated by market forces. The directors therefore undertake daily reviews of the price of lead as shown on the London Metal Exchange (LME). The directors believe that the company has the appropriate controls in place to ensure that the company can react in a timely fashion to any significant changes in the price of lead.
Energy cost risk
Wholesale energy costs have seen increased volatility over the last two years. The directors are taking a number of actions to manage the impact of price increases, including engaging market experts to offer advice, regular monitoring of the market and fixing some forward energy costs to reduce uncertainty.
Supply chain network uncertainty
Any delays in securing materials due to issues with global supply chains can cause problems. The directors seek to ensure that adequate levels on stock are held to meet the requirements of its customers.
Foreign currency risk
Whilst a significant portion of the company's revenues and expenses are denominated in sterling, the company is exposed to some foreign exchange risk. The company constantly reviews its exposure to limit the adverse effects of such risks on its financial performance.The use of forward foreign exchange contracts and other derivatives assist the directors in managing the risk.
Interest rate risk
The company finances its operations in the main through bank loans and asset based financing. The resulting interest costs are reviewed by the directors however, the board accepts that a certain amount of third party funding is required and therefore the board does accept the risk attached to interest rate fluctuations.
Credit risk
The company undertakes credit checks for new accounts and sets credit limits for its customers. The level of debtor days is reviewed for significant accounts and procedures are in place if an account falls outside the set parameters. A reputable credit insurer is also used to insure the debtors. Due to the current market conditions prevailing within the industry sector the company makes an adequate and realistic provision against possible trade debts.
ROYSTON LEAD LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
- 2 -
Cash flow risk
The board continually monitors the cash requirements of the company to ensure that there is the appropriate level of cover. There are adequate facilities readily available to support the company's cash flow requirements at the balance sheet date.
Development and performance
General economic conditions remain difficult, with factors including Russia's ongoing invasion of Ukraine and the global recovery from the Covid-19 pandemic contributing to increased energy cost volatility, general high cost inflation and rising interest rates. Despite these factors, the company has seen increased activity levels from prior year and has a strong order book in place. Financial performance is expected to improve from the previous year.
Key performance indicators
The directors review various key performance indicators during the year to measure the performance of the company both compared to forecasts and against the industry as a whole. A summary of these indicators are as follows:-
Turnover
The directors review the pricing of its products in line with the prices on the LME. This means that the prices offered by the company to its customers are continually updated and remain competitive. Turnover for the year was £18.2m (2021: £12.2m).
Gross profit
As a result of the continued review of the sales prices the directors continually take steps to ensure that the company maintains its gross margin. This is reviewed throughout the year. Gross profit for the year was £2.4m (2021: £1.3m).
Debtors days
The directors review the average debtors days throughout the year to ensure that any collection problems are swiftly identified and resolved. Debtor days increased from 46 in 2021 to 77 in 2022, with the increase reflecting comparatively high revenues in the last quarter of the year.
Stock turnover
The directors strive to hold stock levels to ensure that any short term fluctuation in the lead price can be covered whilst not tying up a large amount of funds in stock holding. Turnover days for the year was 54.9 days (2021: 119.5 days).
Mr I Crabbe
Director
31 July 2023
ROYSTON LEAD LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 DECEMBER 2022
- 3 -
The directors present their annual report and financial statements for the year ended 31 December 2022.
Principal activities
The principal activity of the company continued to be that of the manufacture specialised lead products.
Directors
The directors who held office during the year and up to the date of signature of the financial statements were as follows:
Mr G O'Riordan
(Resigned 20 January 2023)
Mr I Crabbe
Mr M E Sherling
Mr D A J Rintoul
Mr G C Hudson
Mr B H Smith
Results and dividends
The results for the year are set out on page 8.
The directors do not recommend the payment of a dividend for the current financial year.
Financial instruments
The company uses financial instruments comprising bank loans and overdrafts, together with various items such as trade debtors and trade creditors that arise directly from its operations. It is the objective of the board to ensure that the company has ready access to the funds that the board deems necessary at any time during the year. The board reviews future projections to highlight any times when requirements may exceed current levels to ensure that facilities are in place and available.
The main risks arising from the financial instruments are credit risk, interest rate risk, liquidity risk and cash flow risk. The company reviews and agrees policies for managing these risks, as detailed in the strategic report, to minimise its exposure.
Research and development
The company invests in the development of new technology. During the period the company incurred £34,555 of business development and research expenditure (2021: £11,815). The directors believe this will lead to future profits for the company.
Future developments
The directors continue to develop the business in accordance with plans and projections.
Auditor
The auditor, Rayner Essex LLP, is deemed to be reappointed under section 487(2) of the Companies Act 2006.
ROYSTON LEAD LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
- 4 -
Statement of directors' responsibilities
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.
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.
On behalf of the board
Mr I Crabbe
Director
31 July 2023
ROYSTON LEAD LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF ROYSTON LEAD LIMITED
- 5 -
Opinion
We have audited the financial statements of Royston Lead Limited (the 'company') for the year ended 31 December 2022 which comprise the profit and loss account, 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 31 December 2022 and of its loss for the year then ended;
have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and
have been prepared in accordance with the requirements of the Companies Act 2006.
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.
ROYSTON LEAD LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF ROYSTON LEAD 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.
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.
The extent to which the audit was considered capable of detecting irregularities including fraud
Our approach to identifying and assessing the risks of material misstatement in respect of irregularities, including fraud and non-compliance with laws and regulations, was as follows:
the engagement partner ensured that the engagement team collectively had the appropriate competence, capabilities and skills to identify or recognise non-compliance with applicable laws and regulations;
we identified the laws and regulations applicable to the company through discussions with the directors and other management, and from our commercial knowledge and experience of the manufacturing and distribution sectors;
we focused on specific laws and regulations which we considered may have a direct material effect on the financial statements or the operations of the company, including the Companies Act 2006, taxation legislation and data protection, anti-bribery, employment and other relevant regulations;
we assessed the extent of compliance with the laws and regulations identified above through making enquiries of management and inspecting legal correspondence; and
identified laws and regulations were communicated within the audit team regularly and the team remained alert to instances of non-compliance throughout the audit.
ROYSTON LEAD LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF ROYSTON LEAD LIMITED
- 7 -
We assessed the susceptibility of the company’s financial statements to material misstatement, including obtaining an understanding of how fraud might occur, by:
making enquiries of management as to where they considered there was susceptibility to fraud, their knowledge of actual, suspected and alleged fraud; and
considering the internal controls in place to mitigate risks of fraud and non-compliance with laws and regulations.
To address the risk of fraud through management bias and override of controls, we:
performed analytical procedures to identify any unusual or unexpected relationships;
tested journal entries to identify unusual transactions;
assessed whether judgements and assumptions made in determining the accounting estimates were indicative of potential bias; and
investigated the rationale behind significant or unusual transactions.
In response to the risk of irregularities and non-compliance with laws and regulations, we designed procedures which included, but were not limited to:
agreeing financial statement disclosures to underlying supporting documentation
reading the minutes of meetings of those charged with governance;
enquiring of management as to actual and potential litigation and claims; and
reviewing correspondence with HMRC and relevant regulators.
There are inherent limitations in our audit procedures described above. The more removed that laws and regulations are from financial transactions, the less likely it is that we would become aware of non-compliance. Auditing standards also limit the audit procedures required to identify non-compliance with laws and regulations to enquiry of the directors and other management and the inspection of regulatory and legal correspondence, if any.
Material misstatements that arise due to fraud can be harder to detect than those that arise from error as they may involve deliberate concealment or collusion.
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.
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.
Antony Federer FCA FCCA CF
Senior Statutory Auditor
For and on behalf of Rayner Essex LLP
31 July 2023
Chartered Accountants
Statutory Auditor
Faulkner House
Victoria Street
St Albans
Hertfordshire
AL1 3SE
ROYSTON LEAD LIMITED
PROFIT AND LOSS ACCOUNT
FOR THE YEAR ENDED 31 DECEMBER 2022
- 8 -
2022
2021
Notes
£
£
Turnover
3
18,229,100
12,237,501
Cost of sales
(15,835,072)
(10,913,517)
Gross profit
2,394,028
1,323,984
Administrative expenses
(2,841,050)
(2,068,356)
Other operating income
25,238
Operating loss
6
(447,022)
(719,134)
Interest receivable and similar income
7
18,000
13,000
Interest payable and similar expenses
8
(217,847)
(129,465)
Loss before taxation
(646,869)
(835,599)
Tax on loss
9
192,282
293,976
Loss for the financial year
(454,587)
(541,623)
The profit and loss account has been prepared on the basis that all operations are continuing operations.
ROYSTON LEAD LIMITED
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2022
- 9 -
2022
2021
£
£
Loss for the year
(454,587)
(541,623)
Other comprehensive income
Actuarial gain on defined benefit pension schemes
160,000
33,000
Total comprehensive income for the year
(294,587)
(508,623)
ROYSTON LEAD LIMITED
BALANCE SHEET
AS AT
31 DECEMBER 2022
31 December 2022
- 10 -
2022
2021
Notes
£
£
£
£
Fixed assets
Tangible assets
11
1,345,687
1,261,924
Investments
10
4,900
1,345,687
1,266,824
Current assets
Stocks
12
2,382,345
3,211,393
Debtors
14
10,748,596
7,237,413
Cash at bank and in hand
228,201
66,355
13,359,142
10,515,161
Creditors: amounts falling due within one year
15
(12,260,258)
(8,473,340)
Net current assets
1,098,884
2,041,821
Total assets less current liabilities
2,444,571
3,308,645
Creditors: amounts falling due after more than one year
16
(10,978)
(393,465)
Provisions for liabilities
Defined benefit pension liability
21
87,000
274,000
(87,000)
(274,000)
Net assets
2,346,593
2,641,180
Capital and reserves
Called up share capital
19
59,170
59,170
Share premium account
20
245,277
245,277
Profit and loss reserves
22
2,042,146
2,336,733
Total equity
2,346,593
2,641,180
The financial statements were approved by the board of directors and authorised for issue on 31 July 2023 and are signed on its behalf by:
Mr I Crabbe
Director
Company Registration No. 00411322
ROYSTON LEAD LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2022
- 11 -
Share capital
Share premium account
Profit and loss reserves
Total
£
£
£
£
Balance at 1 January 2021
59,170
245,277
2,845,356
3,149,803
Year ended 31 December 2021:
Loss for the year
-
-
(541,623)
(541,623)
Other comprehensive income:
Actuarial gains/(losses) on defined benefit plans
-
-
33,000
33,000
Total comprehensive income for the year
(508,623)
(508,623)
Balance at 31 December 2021
59,170
245,277
2,336,733
2,641,180
Year ended 31 December 2022:
Loss for the year
-
-
(454,587)
(454,587)
Other comprehensive income:
Actuarial gains/(losses) on defined benefit plans
-
-
160,000
160,000
Total comprehensive income for the year
-
-
(294,587)
(294,587)
Balance at 31 December 2022
59,170
245,277
2,042,146
2,346,593
ROYSTON LEAD LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
- 12 -
1
Accounting policies
Company information
Royston Lead Limited is a private company limited by shares incorporated in England and Wales. The registered office is Pogmoor Works, Stocks Lane, Barnsley, South Yorkshire, S75 2DS.
1.1
Accounting convention
These financial statements have been prepared in accordance with FRS 102 “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 £.
The financial statements have been prepared under the historical cost convention, modified to include the revaluation of freehold 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 4 ‘Statement of Financial Position’ – Reconciliation of the opening and closing number of shares;
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’ – Carrying amounts, interest income/expense and net gains/losses for each category of financial instrument; 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 26 ‘Share based Payment’ – Share-based payment expense charged to profit or loss, reconciliation of opening and closing number and weighted average exercise price of share options, how the fair value of options granted was measured, measurement and carrying amount of liabilities for cash-settled share-based payments, explanation of modifications to arrangements;
Section 33 ‘Related Party Disclosures’ – Compensation for key management personnel.
The financial statements of the company are consolidated in the financial statements of International Metal Industries Limited. These consolidated financial statements are available from its registered office: Faulkner House, Victoria Street, St Albans, Herts, AL1 3SE.
1.2
Going concern
At the time of approving the financial statements, the directors have a reasonable expectation that the company has adequate resources to continue in operational existence for the foreseeable future. Thus the directors continue to adopt the going concern basis of accounting in preparing the financial statements. true
In adopting the going concern basis for preparing the financial statements, the directors have considered the business activities and the group's principal risks and uncertainties. The group in which the company is a member meets its day-to-day working capital requirements through use of its cash and banking facilities.
In assessing the appropriateness of the going concern assumption, the directors have prepared detailed cash flow forecasts using the latest information available which show that the group can continue to meet its obligations as they fall due. The directors are therefore satisfied that the group will continue to operate within facilities agreed with the group’s bankers.
ROYSTON LEAD LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
1
Accounting policies
(Continued)
- 13 -
1.3
Turnover
Turnover represents amounts receivable for goods and services net of VAT and trade discounts, including sales rebates.
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 despatch of the goods), the amount of revenue can be measured reliably, it is probable that the economic benefits associated with the transaction will flow to the entity and the costs incurred or to be incurred in respect of the transaction can be measured reliably.
The “percentage of completion method” is used to determine the appropriate amount to recognise in a given period. The stage of completion is measured by the proportion of contract costs incurred for work performed to date compared to the estimated total contract costs. Costs incurred in the year in connection with future activity on a contract are excluded from contract costs in determining the stage of completion. These costs are presented as stocks, prepayments or other assets depending on their nature, and provided it is probable they will be recovered.
1.4
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:
Freehold land and buildings
2% - 3% straight line
Plant and machinery
5% - 33% straight line
Motor vehicles
33% 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.
1.5
Fixed asset investments
Interests in private entities are initially measured at cost and subsequently measured at cost less any accumulated impairment losses. The investments are assessed for impairment at each reporting date and any impairment losses or reversals of impairment losses are recognised immediately in profit or loss.
1.6
Impairment of fixed assets
At each reporting period end date, the company reviews the carrying amounts of its tangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where it is not possible to estimate the recoverable amount of an individual asset, the company estimates the recoverable amount of the cash-generating unit to which the asset belongs.
Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.
If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (or cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the impairment loss is treated as a revaluation decrease.
ROYSTON LEAD LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
1
Accounting policies
(Continued)
- 14 -
Recognised impairment losses are reversed if, and only if, the reasons for the impairment loss have ceased to apply. Where an impairment loss subsequently reverses, the carrying amount of the asset (or cash-generating unit) is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset (or cash-generating unit) in prior years. A reversal of an impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the reversal of the impairment loss is treated as a revaluation increase.
1.7
Stocks
Stocks are stated at the lower of cost and estimated selling price less costs to complete and sell. Cost comprises direct materials and, where applicable, direct labour costs and those overheads that have been incurred in bringing the stocks to their present location and condition.
At each reporting date, an assessment is made for impairment. Any excess of the carrying amount of stocks over its estimated selling price less costs to complete and sell is recognised as an impairment loss in profit or loss. Reversals of impairment losses are also recognised in profit or loss.
1.8
Cash at bank and in hand
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.
1.9
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.
ROYSTON LEAD LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
1
Accounting policies
(Continued)
- 15 -
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, loans from fellow group companies and preference shares that are classified as debt, are initially recognised at transaction price unless the arrangement constitutes a financing transaction, where the debt instrument is measured at the present value of the future payments discounted at a market rate of interest. Financial liabilities classified as payable within one year are not amortised.
Debt instruments are subsequently carried at amortised cost, using the effective interest rate method.
Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Amounts payable are classified as current liabilities if payment is due within one year or less. If not, they are presented as non-current liabilities. Trade creditors are recognised initially at transaction price and subsequently measured at amortised cost using the effective interest method.
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.
ROYSTON LEAD LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
1
Accounting policies
(Continued)
- 16 -
Derecognition of financial liabilities
Financial liabilities are derecognised when the company’s contractual obligations expire or are discharged or cancelled.
1.10
Derivatives
The company enters into foreign exchange forward contracts in order to manage its exposure to foreign exchange risk.
Changes in the fair value of derivatives that are designated and qualify as fair value hedges are recognised in profit or loss immediately, together with any changes in the fair value of the hedged asset or liability that are attributable to the hedged risk.
1.11
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.
1.12
Employee benefits
The costs of short-term employee benefits are recognised as a liability and an expense, unless those costs are required to be recognised as part of the cost of stock or fixed assets.
The cost of any unused holiday entitlement is recognised in the period in which the employee’s services are received.
Termination benefits are recognised immediately as an expense when the company is demonstrably committed to terminate the employment of an employee or to provide termination benefits.
ROYSTON LEAD LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
1
Accounting policies
(Continued)
- 17 -
1.13
Retirement benefits
Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.
The cost of providing benefits under defined benefit plans is determined separately for each plan using the projected unit credit method, and is based on actuarial advice.
The change in the net defined benefit liability arising from employee service during the year is recognised as an employee cost. The cost of plan introductions, benefit changes, settlements and curtailments are recognised as an expense in measuring profit or loss in the period in which they arise.
The net interest element is determined by multiplying the net defined benefit liability by the discount rate, taking into account any changes in the net defined benefit liability during the period as a result of contribution and benefit payments. The net interest is recognised in profit or loss as other finance revenue or cost.
Remeasurement changes comprise actuarial gains and losses, the effect of the asset ceiling and the return on the net defined benefit liability excluding amounts included in net interest. These are recognised immediately in other comprehensive income in the period in which they occur and are not reclassified to profit and loss in subsequent periods.
The net defined benefit pension asset or liability in the balance sheet comprises the total for each plan of the present value of the defined benefit obligation (using a discount rate based on high quality corporate bonds), less the fair value of plan assets out of which the obligations are to be settled directly. Fair value is based on market price information, and in the case of quoted securities is the published bid price. The value of a net pension benefit asset is limited to the amount that may be recovered either through reduced contributions or agreed refunds from the scheme.
1.14
Leases
Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessees. All other leases are classified as operating leases.
Assets held under finance leases are recognised as assets at the lower of the assets fair value at the date of inception and the present value of the minimum lease payments. The related liability is included in the balance sheet as a finance lease obligation. Lease payments are treated as consisting of capital and interest elements. The interest is charged to profit or loss so as to produce a constant periodic rate of interest on the remaining balance of the liability.
1.15
Government grants
Government grants are recognised at the fair value of the asset received or receivable when there is reasonable assurance that the grant conditions will be met and the grants will be received.
A grant that specifies performance conditions is recognised in income when the performance conditions are met. Where a grant does not specify performance conditions it is recognised in income when the proceeds are received or receivable. A grant received before the recognition criteria are satisfied is recognised as a liability.
1.16
Foreign exchange
Monetary assets and liabilities denominated in foreign currencies are translated into sterling at the rates of exchange ruling at the balance sheet date. Transactions in foreign currencies are recorded at the rate ruling at the date of the transaction. All differences are taken to profit and loss account.
1.17
Product warranties
Provision is made for customers' claims arising in product warranty periods based on management's assessment of costs to be incurred. In the case of certain large contracts, provision is made as a percentage of sales value. Costs of warranty work are written off against the provision as incurred.
ROYSTON LEAD LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
- 18 -
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.
There are not considered to be any estimates or assumptions which have a significant risk of causing a material adjustment to the carrying amount of assets and liabilities of the company.
3
Turnover and other revenue
An analysis of the company's turnover is as follows:
2022
2021
£
£
Turnover analysed by class of business
Sale of goods
18,229,100
12,237,501
2022
2021
£
£
Turnover analysed by geographical market
UK
7,710,377
7,081,676
Other
10,518,723
5,155,825
18,229,100
12,237,501
2022
2021
£
£
Other significant revenue
Interest income
18,000
13,000
Grants received
-
25,238
4
Employees
The average monthly number of persons (including directors) employed by the company during the year was:
2022
2021
Number
Number
Management
1
1
Administration
10
11
Warehouse
35
27
Total
46
39
ROYSTON LEAD LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
4
Employees
(Continued)
- 19 -
Their aggregate remuneration comprised:
2022
2021
£
£
Wages and salaries
1,716,904
1,447,332
Social security costs
144,669
127,649
Pension costs
34,738
37,544
1,896,311
1,612,525
5
Directors' remuneration
2022
2021
£
£
Remuneration for qualifying services
206,600
The number of directors for whom retirement benefits are accruing under defined contribution schemes amounted to 0 (2021 - 1).
Remuneration disclosed above include the following amounts paid to the highest paid director:
2022
2021
£
£
Remuneration for qualifying services
n/a
206,600
The directors are remunerated through another group company from 1 January 2022.
6
Operating loss
2022
2021
Operating loss for the year is stated after charging/(crediting):
£
£
Exchange differences apart from those arising on financial instruments measured at fair value through profit or loss
14,652
(117,004)
Research and development costs
34,555
11,815
Government grants
-
(25,238)
Fees payable to the company's auditor for the audit of the company's financial statements
12,000
12,000
Depreciation of owned tangible fixed assets
154,071
149,194
Depreciation of tangible fixed assets held under finance leases
104,826
100,329
Cost of stocks recognised as an expense
14,152,686
9,804,953
ROYSTON LEAD LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
- 20 -
7
Interest receivable and similar income
2022
2021
£
£
Interest income
Interest on the net defined benefit asset
18,000
13,000
8
Interest payable and similar expenses
2022
2021
£
£
Interest on financial liabilities measured at amortised cost:
Interest on bank overdrafts and loans
27,161
1,987
Other interest on financial liabilities
151,414
91,101
178,575
93,088
Other finance costs:
Interest on finance leases and hire purchase contracts
16,209
19,813
Net interest on the net defined benefit liability
23,000
17,000
Other interest
63
(436)
217,847
129,465
ROYSTON LEAD LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
- 21 -
9
Taxation
2022
2021
£
£
Current tax
Adjustments in respect of prior periods
(192,282)
(293,976)
The actual credit for the year can be reconciled to the expected credit for the year based on the profit or loss and the standard rate of tax as follows:
2022
2021
£
£
Loss before taxation
(646,869)
(835,599)
Expected tax credit based on the standard rate of corporation tax in the UK of 19.00% (2021: 19.00%)
(122,905)
(158,764)
Tax effect of expenses that are not deductible in determining taxable profit
(793)
(5,193)
Adjustments in respect of prior years
(155,749)
(293,976)
Group relief
45,177
133,875
Permanent capital allowances in excess of depreciation
41,988
30,082
Taxation credit for the year
(192,282)
(293,976)
At the end of the year, the company has tax losses of £408,428 (2021: £297,525) available to carry forward against future periods.
10
Fixed asset investments
2022
2021
£
£
Unlisted investments
4,900
The company has not designated any financial assets that are not classified as financial assets at fair value through profit or loss.
The investments represent ordinary shares held (9%) in Lead Delegated Assessment Limited, a company registered in England & Wales.
ROYSTON LEAD LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
10
Fixed asset investments
(Continued)
- 22 -
Movements in fixed asset investments
Investments
£
Cost or valuation
At 1 January 2022
4,900
Disposals
(4,900)
At 31 December 2022
-
Carrying amount
At 31 December 2022
-
At 31 December 2021
4,900
11
Tangible fixed assets
Freehold land and buildings
Plant and machinery
Motor vehicles
Total
£
£
£
£
Cost
At 1 January 2022
660,552
3,247,373
9,250
3,917,175
Additions
342,660
342,660
Disposals
(22,187)
(22,187)
At 31 December 2022
660,552
3,567,846
9,250
4,237,648
Depreciation and impairment
At 1 January 2022
363,112
2,282,889
9,250
2,655,251
Depreciation charged in the year
16,127
242,770
258,897
Eliminated in respect of disposals
(22,187)
(22,187)
At 31 December 2022
379,239
2,503,472
9,250
2,891,961
Carrying amount
At 31 December 2022
281,313
1,064,374
1,345,687
At 31 December 2021
297,440
964,484
1,261,924
The net carrying value of tangible fixed assets includes the following in respect of assets held under finance leases or hire purchase contracts.
2022
2021
£
£
Plant and machinery
341,544
442,720
Depreciation charge for the year in respect of leased assets
104,826
100,329
ROYSTON LEAD LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
- 23 -
12
Stocks
2022
2021
£
£
Raw materials and consumables
2,382,345
3,211,393
13
Financial instruments
2022
2021
£
£
Carrying amount of financial assets
Debt instruments measured at amortised cost
7,598,040
4,921,866
Equity instruments measured at cost less impairment
-
4,900
Carrying amount of financial liabilities
Measured at amortised cost
12,213,103
8,816,222
Forward exchange contracts
Forward exchange contracts were in place at the year end to sell €2,700,000, and purchase ZAR5,000,000 (2021: sell $2,900,000 and €3,750,000, and purchase ZAR7,000,000).
The nature of the risks being hedged is that of exchange rate risk, in particular adverse movements on the exchange rate to sell or purchase USD, Euros or Rand for highly probable future sales and purchases.
14
Debtors
2022
2021
Amounts falling due within one year:
£
£
Trade debtors
3,849,862
1,530,425
Amounts owed by group undertakings
3,512,222
3,145,936
Other debtors
866,620
367,435
Prepayments and accrued income
2,519,892
2,193,617
10,748,596
7,237,413
Amounts owed by group undertakings are due within one year, interest free and unsecured.
ROYSTON LEAD LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
- 24 -
15
Creditors: amounts falling due within one year
2022
2021
Notes
£
£
Bank loans
17
63,000
Obligations under finance leases
18
126,407
71,776
Trade creditors
726,816
1,313,878
Amounts owed to group undertakings
5,192,080
2,861,790
Taxation and social security
58,133
50,583
Other creditors
4,944,767
2,987,817
Accruals and deferred income
1,212,055
1,124,496
12,260,258
8,473,340
Included in other creditors is £4,934.884 (2021: £2,977,837) in respect of HSBC asset financing facilities. These are secured on the assets of the group.
Amounts owed to group undertakings are due within one year, interest free and unsecured.
16
Creditors: amounts falling due after more than one year
2022
2021
Notes
£
£
Bank loans and overdrafts
17
279,099
Obligations under finance leases
18
10,978
114,366
10,978
393,465
Amounts included above which fall due after five years are as follows:
Payable by instalments
-
27,640
17
Loans and overdrafts
2022
2021
£
£
Bank loans
342,099
Payable within one year
63,000
Payable after one year
279,099
The banking facilities also provided to the company and group by HSBC PLC and HSBC Invoice Financing (UK) Limited are secured by way of a fixed and floating charge over the assets of the company and of it's fellow group companies.
ROYSTON LEAD LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
17
Loans and overdrafts
(Continued)
- 25 -
The loan facilities provided by HSBC are wholly repayable within 60 months. The loans bear interest between 2.75 - 2.95% above the HSBC Bank Base Rate.
During the year, the remaining bank loan was fully paid off.
18
Finance lease obligations
2022
2021
Future minimum lease payments due under finance leases:
£
£
Within one year
126,407
71,775
In two to five years
10,978
114,367
137,385
186,142
19
Share capital
2022
2021
£
£
Ordinary share capital
Issued and fully paid
7,000 ordinary of 5p each
350
350
58,820 deferred ordinary of £1 each
58,820
58,820
59,170
59,170
The deferred ordinary shares do not carry any rights to dividends. In addition, the deferred ordinary shares do not entitle the holders to vote at any general meeting of the company.
On a return of assets on a winding up, the assets of the company available for distribution among the members shall be applied first in repaying to the holders of the ordinary shares the amounts paid up on such shares together with a premium of £100 per share, and second in repaying to the holders of the deferred shares the amounts paid up on such shares. The balance of such assets shall be distributed among the holders of the ordinary shares rateably according to the number of shares held by them.
20
Share premium account
2022
2021
£
£
At the beginning and end of the year
245,277
245,277
21
Retirement benefit schemes
Defined contribution schemes
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.
The charge to profit or loss in respect of defined contribution schemes was £34,738 (2021 - £37,544).
ROYSTON LEAD LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
21
Retirement benefit schemes
(Continued)
- 26 -
Defined benefit schemes
The company operates a defined benefit pension scheme for qualifying employees. The most recent full actuarial valuation was on 1 January 2020 and was carried out by a qualified independent actuary. This showed a deficit of £362,000.
FRS102 valuations were undertaken by a qualified independent actuary and these show a deficit of £87,000 at 31 December 2022 and a deficit of £274,000 at 31 December 2021. The movement in the deficit is shown below.
The scheme is closed to new members and as a result the current service costs (as a percentage of pensionable earnings) is expected to increase in future years as the members of the scheme approach retirement.
Key assumptions
2022
2021
%
%
Discount rate
5.00
1.90
Expected rate of increase of pensions in payment
3.10
3.30
Expected rate of salary increases
3.20
3.45
Mortality assumptions
Assumed life expectations on retirement at age 65:
2022
2021
Years
Years
Retiring today
- Males
24.4
24.3
- Females
26.6
26.5
Retiring in 20 years
- Males
25.6
25.6
- Females
28.0
27.9
Amounts recognised in the profit and loss account
2022
2021
£
£
Net interest on defined benefit liability/(asset)
5,000
4,000
Of the total expenses for the year, £18,000 is included in investment income (2021: £13,000) and £23,000 (2021: £17,000) in finance costs.
ROYSTON LEAD LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
21
Retirement benefit schemes
(Continued)
- 27 -
Amounts taken to other comprehensive income
2022
2021
£
£
Actual return on scheme assets
37,000
(18,000)
Less: calculated interest element
18,000
13,000
Return on scheme assets excluding interest income
55,000
(5,000)
Actuarial changes related to obligations
(215,000)
(28,000)
Total costs/(income)
(160,000)
(33,000)
The amounts included in the balance sheet arising from the company's obligations in respect of defined benefit plans are as follows:
2022
2021
£
£
Present value of defined benefit obligations
840,000
1,210,000
Fair value of plan assets
(753,000)
(936,000)
Deficit in scheme
87,000
274,000
Movements in the present value of defined benefit obligations
2022
£
Liabilities at 1 January 2022
1,210,000
Actuarial gains and losses
(215,000)
Interest cost
23,000
Secured pensioners value due to scheme experience
(178,000)
At 31 December 2022
840,000
The defined benefit obligations arise from plans which are wholly or partly funded.
Movements in the fair value of plan assets
2022
£
Fair value of assets at 1 January 2022
936,000
Secured pensioners value due to scheme experience
(178,000)
Interest income
18,000
Actuarial gain/(losses)
(55,000)
Contributions by the employer
32,000
At 31 December 2022
753,000
ROYSTON LEAD LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
21
Retirement benefit schemes
(Continued)
- 28 -
The actual return on plan assets was a deficit £37,000 (2021 - £18,000 gain).
Fair value of plan assets at the reporting period end
2022
2021
£
£
Equity instruments
128,863
131,700
Debt instruments
124,730
137,327
Property
25,744
29,101
Annuities
466,000
632,000
Other
7,663
5,872
753,000
936,000
22
Profit and loss reserves
2022
2021
£
£
At the beginning of the year
2,336,733
2,845,356
Loss for the year
(454,587)
(541,623)
Actuarial differences recognised in other comprehensive income
160,000
33,000
At the end of the year
2,042,146
2,336,733
23
Financial commitments, guarantees and contingent liabilities
The banking facilities provided to the company and group by HSBC PLC and HSBC Invoice Financing (UK) Limited are secured by way of a fixed and floating charge over the assets of the company and of its fellow group companies.
Further fixed charges have been created in favour of the Welsh Ministers securing the assets of group companies providing cross guarantees for all group companies in respect of the group's debt facilities.
24
Ultimate controlling party
The company's immediate parent undertaking is Envirolead Distribution Limited, a subsidiary of Envirolead Midco Limited. The company's ultimate parent company is Industrial Metals Holdings Limited, a company registered in the Isle of Man.
International Metal Industries Limited is the parent company of Envirolead Midco Limited. International Metal Industries Limited has included the financial statements of Royston Lead Limited in their consolidated group accounts, copies of which are available upon request: Faulkner House, Victoria Street, St Albans, Herts, AL1 3SE.
The ultimate controlling party is Mr M E Sherling by virtue of his voting rights on his shareholding in the ultimate parent company.
ROYSTON LEAD LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
- 29 -
25
Related party transactions and balances
The company has taken advantage of FRS 102 section 33.1A to not disclose transactions entered into between two or more members of a group, provided that any subsidiary which is party to the transaction is wholly owned by such a member.
During the year the following expenditure was incurred from the following related entities which share a common director and/or shareholder. All transactions were entered into at arm’s length:
At the balance sheet date the following balances were owed from/(to) the following related entities which share a common director and/or shareholder:
Brandyford Group (£6,000) (2021: (£243))
Highflow Limited £76,600 (2021: £96,800)
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