Company Registration No. 00548932 (England and Wales)
EUROPEAN SPRINGS AND PRESSINGS LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED
31 DECEMBER 2021
31 December 2021
PM+M Solutions for Business LLP
Chartered Accountants
New Century House
Greenbank Technology Park
Challenge Way
Blackburn
Lancashire
BB1 5QB
EUROPEAN SPRINGS AND PRESSINGS LIMITED
COMPANY INFORMATION
Directors
H M Downs
S P McSheehy
O Tengroth
Secretary
S P McSheehy
Company number
00548932
Registered office
Chaffinch Business Park
Croydon Road
Beckenham
Kent
BR3 4DW
Auditor
PM+M Solutions for Business LLP
New Century House
Greenbank Technology Park
Challenge Way
Blackburn
Lancashire
BB1 5QB
EUROPEAN SPRINGS AND PRESSINGS LIMITED
CONTENTS
Page
Strategic report
1
Directors' report
2 - 3
Independent auditor's report
4 - 7
Statement of income and retained earnings
8
Balance sheet
9
Notes to the financial statements
10 - 22
EUROPEAN SPRINGS AND PRESSINGS LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 31 DECEMBER 2021
- 1 -
The directors present the strategic report for the year ended 31 December 2021.
Fair review of the business
The company continues to provide bespoke spring design and manufacturing service to a wide customer base.
The company's turnover
increased during the year
by £
4.2 million
to £
26,134,243.
The company as part of a larger group and with its financial strength is now well poised to further increase its market share within the spring manufacturing sector.
Net assets
have
in
creased by
£137,687 during
the year to £
14,132,536.
Principal risks and uncertainties
The company's main risk is that of reduced activity within the manufacturing sector as a result of the present economic situation
with high inflation and the ongoing effects of the Covid-19 pandemic and Brexit and
competition from emerging markets. These risks are mitigated by being part of a larger specialist group and by the quality of the company's in house engineering expertise.
The company does not actively use financial instruments as part of its financial risk management. It is exposed to the usual credit risk and cash flow risk associated with selling on credit and manages this though credit control procedures.
Key performance indicators
Turnover for the year to 31 December 20
21
has
increased
by 19.3%
in comparison to the company's previous accounting period. Gross margin for the year has
also increased compared
with the prior year at
43.87
% (20
20
-
42.5
%).
Fixed asset
investment
amounted to £
1,062,346
(20
20
- £
522,073
) during the year and there have been no significant disposals during the year.
S P McSheehy
Director
27 September 2022
EUROPEAN SPRINGS AND PRESSINGS LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 DECEMBER 2021
- 2 -
The directors present their annual report and financial statements for the year ended 31 December 2021.
Principal activities
The principal activity of the company continued to be that of the manufacturing of springs and pressings.
Results and dividends
The results for the year are set out on page 8.
Ordinary dividends were paid amounting to £5,000,000. The directors do not recommend payment of a further dividend.
Directors
The directors who held office during the year and up to the date of signature of the financial statements were as follows:
H M Downs
M R Gibbs
(Resigned 1 February 2022)
S P McSheehy
O Tengroth
Post reporting date events
On 1 February 2022, the company transferred at net book value the trade and assets of its Cornwall based spring manufacturing division to a separate fellow subsidiary company within the group. During the year ended 31 December 2021, the Cornwall division contributed £14,839k towards the company's turnover for the year.
Auditor
The auditor, PM+M Solutions for Business LLP, is deemed to be reappointed under section 487(2) of the Companies Act 2006.
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.
EUROPEAN SPRINGS AND PRESSINGS LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2021
- 3 -
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
S P McSheehy
Director
27 September 2022
EUROPEAN SPRINGS AND PRESSINGS LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF EUROPEAN SPRINGS AND PRESSINGS LIMITED
- 4 -
Opinion
We have audited the financial statements of European Springs and Pressings Limited (the 'company') for the year ended 31 December 2021 which comprise the statement of income and retained earnings, the balance sheet 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 2021 and of its profit for the year then ended;
-
have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and
-
have been prepared in accordance with the requirements of the Companies Act 2006.
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the
Auditor's
responsibilities for the audit of the
financial statements
section of our report. We are independent of the
company
in accordance with the ethical requirements that are relevant to our audit of the
financial statements
in the UK, including the FRC’s Ethical Standard
, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Conclusions relating to going concern
In auditing the financial statements, we have concluded that the directors' use of the going concern basis of accounting in the preparation of the financial statements is appropriate.
Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the company's ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.
Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.
The other information comprises the information included in the annual report other than the financial statements and our auditor's report thereon. The directors are responsible for the other information contained within the annual report. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the course of the audit, or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.
We have nothing to report in this regard.
Opinions on other matters prescribed by the Companies Act 2006
In our opinion, based on the work undertaken in the course of our audit
:
-
the information given in the strategic report and the directors'
r
eport 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.
EUROPEAN SPRINGS AND PRESSINGS LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF EUROPEAN SPRINGS AND PRESSINGS LIMITED
- 5 -
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 identifie
d
material misstatements in the strategic report or the directors'
r
eport
.
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'
r
esponsibilities
s
tatement, 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
.
The extent to which our procedures are capable of detecting irregularities, including fraud, is detailed below
.
EUROPEAN SPRINGS AND PRESSINGS LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF EUROPEAN SPRINGS AND PRESSINGS LIMITED
- 6 -
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 have 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;
-
the matters discussed among the audit engagement team
and
relevant specialists regarding how and where fraud
might occur in the financial statements and any potential
indicators of fraud
;
-
a
ny matters we identified having obtained and reviewed the
Company's
documentation of their policies and procedures
relating to:
-
identifying, evaluating and complying with laws and regulations
and whether they were aware of any instances of non
-
compliance;
-
detecting and responding to the risks of fraud and whether
they have knowledge of any actual, suspected or alleged
fraud;
-
the internal controls established to mitigate risks of fraud or
non-compliance with laws and regulations
.
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 the following areas: timing of recognition of commercial income, posting of unusual journals and complex transactions; and manipulating the Company's performance profit measures and other key performance indicators to meet remuneration targets and externally communicated targets. 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, focusing on provisions
of 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
UK Companies Act, employment law, health and
safety
regulations
, pensions legislation and tax legislation.
Audit response to risks identified
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;
-
reading minutes of meetings of those charged with governance and reviewing correspondence with HMRC; and
-
in addressing the identified risks 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.
Owing to the inherent limitations of an audit, there is an unavoidable risk
that we may not have detected some material misstatements in the
financial statements, even though we have properly planned and
performed our audit in accordance with auditing standards. For example,
the further removed non-compliance with laws and regulations
(irregularities) is
from the events and transactions reflected in the financial
statements, the less likely the inherently limited procedures required by
auditing standards would identify it. In addition, as with any audit, there
remained a higher risk of non
-
detection of irregularities, as these may
involve collusion, forgery, intentional omissions, misrepresentations, or the
override of internal controls. We are not responsible for preventing
non-compliance and cannot be expected to detect non-compliance with
all laws and regulations.
EUROPEAN SPRINGS AND PRESSINGS LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF EUROPEAN SPRINGS AND PRESSINGS LIMITED
- 7 -
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.
Nigel Wright BSc FCA
Senior Statutory Auditor
For and on behalf of PM+M Solutions for Business LLP
27 September 2022
Chartered Accountants
Statutory Auditor
New Century House
Greenbank Technology Park
Challenge Way
Blackburn
Lancashire
BB1 5QB
EUROPEAN SPRINGS AND PRESSINGS LIMITED
STATEMENT OF INCOME AND RETAINED EARNINGS
FOR THE YEAR ENDED 31 DECEMBER 2021
- 8 -
2021
2020
Notes
£
£
Turnover
3
26,134,243
21,911,721
Cost of sales
(14,667,931)
(12,599,447)
Gross profit
11,466,312
9,312,274
Distribution costs
(1,001,415)
(772,416)
Administrative expenses
(4,125,228)
(3,893,142)
Other operating income
157,160
306,950
Operating profit
4
6,496,829
4,953,666
Interest receivable and similar income
8
533
790
Interest payable and similar expenses
9
(38,200)
(38,692)
Profit before taxation
6,459,162
4,915,764
Tax on profit
10
(1,321,475)
(983,946)
Profit for the financial year
5,137,687
3,931,818
Retained earnings brought forward
13,994,249
15,062,431
Dividends
11
(5,000,000)
(5,000,000)
Retained earnings carried forward
14,131,936
13,994,249
EUROPEAN SPRINGS AND PRESSINGS LIMITED
BALANCE SHEET
AS AT
31 DECEMBER 2021
31 December 2021
- 9 -
2021
2020
Notes
£
£
£
£
Fixed assets
Tangible assets
12
6,981,012
6,795,509
Current assets
Stocks
13
4,835,055
4,314,309
Debtors
14
4,351,209
3,339,346
Cash at bank and in hand
3,674,868
3,328,995
12,861,132
10,982,650
Creditors: amounts falling due within one year
15
(3,813,095)
(2,133,414)
Net current assets
9,048,037
8,849,236
Total assets less current liabilities
16,029,049
15,644,745
Creditors: amounts falling due after more than one year
16
(1,017,315)
(1,036,204)
Provisions for liabilities
Provisions
20
230,000
230,000
Deferred tax liability
18
649,198
383,692
(879,198)
(613,692)
Net assets
14,132,536
13,994,849
Capital and reserves
Called up share capital
21
600
600
Profit and loss reserves
14,131,936
13,994,249
Total equity
14,132,536
13,994,849
The financial statements were approved by the board of directors and authorised for issue on 27 September 2022 and are signed on its behalf by:
S P McSheehy
Director
Company Registration No. 00548932
EUROPEAN SPRINGS AND PRESSINGS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021
- 10 -
1
Accounting policies
Company information
European Springs and Pressings Limited is a
private
company
limited by shares
incorporated in
England and Wales
.
The registered office is
Chaffinch Business Park, Croydon Road, Beckenham, Kent, BR3 4DW.
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 a
mounts
in these financial statements are
rounded to the nearest £.
The financial statements have been prepared under the historical cost convention. 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
.
T
he company has
therefore
taken advantage of
e
xemptions 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
f
low 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 33 ‘Related Party Disclosures’ – Compensation for key management personnel
.
The financial statements of the company are consolidated in the financial statements of
Beijer Alma AB (publ)
. These consolidated financial statements are available from
the
registered office
of European Springs and Pressings Limited at Chaffinch Business Park, Croydon Road, Beckenham, BR3 4DW.
1.2
Going concern
A
true
t the time of approving the financial statements
,
t
he directors have a reasonable expectation that the
company
has adequate resources to continue in operational existence for the foreseeable future. Thus
t
he directors continue to adopt the going concern basis of accounting in preparing the financial statements.
1.3
Turnover
Turnover is recognised at the fair value of the consideration received or receivable for goods and services provided in the normal course of business
, and
is shown net of VAT and other sales related taxes
.
The fair value of consideration takes into account trade discounts, settlement discounts and volume 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 dispatch of the goods)
, the amount of revenue can be measured reliably, it is probable that the economic benefits associated with the transaction will flow to the entity and the costs incurred or to be incurred in respect of the transaction can be measured reliably.
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.
EUROPEAN SPRINGS AND PRESSINGS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2021
1
Accounting policies
(Continued)
- 11 -
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% straight line
Leasehold improvements
2% straight line
Plant and equipment
10% straight line & 20% straight line
Motor vehicles
25% reducing balance
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
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.
1.6
Stocks
Stocks are stated at the lower of cost and estimated selling price less costs to complete and sell. Cost comprises direct materials and, where applicable, direct labour costs and those overheads that have been incurred in bringing the stocks to their present location and condition.
Stocks held for distribution at no or nominal consideration are measured at the lower of cost and replacement cost, adjusted where applicable for any loss of service potential.
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.
1.7
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.
EUROPEAN SPRINGS AND PRESSINGS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2021
1
Accounting policies
(Continued)
- 12 -
1.8
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.
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.
EUROPEAN SPRINGS AND PRESSINGS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2021
1
Accounting policies
(Continued)
- 13 -
Basic financial liabilities
Basic financial liabilities, including
creditors
, bank loans, loans from
fellow group 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
paymen
ts discounted at a market rate of interest.
Financial liabilities classified as payable within one year are not amortised.
Trade creditors
are obligations to pay for goods or services that have been acquired
in the ordinary course of business from suppliers. A
m
ounts 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.
Derecognition of financial liabilities
Financial liabilities are derecognised when the company’s contractual obligations
expire or are discharged or cancelled.
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.
1.9
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.
EUROPEAN SPRINGS AND PRESSINGS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2021
1
Accounting policies
(Continued)
- 14 -
1.10
Provisions
Provisions are recognised when the
company
has a legal or constructive present obligation as a result of a past event, it is probable that the
company
will be required to settle that obligation and a reliable estimate can be made of the amount of the obligation.
The amount recognised as a provision is the best estimate of the consideration required to settle the present obligation at the reporting end date, taking into account the risks and uncertainties surrounding the obligation.
Where the effect of the time value of money is material, the amount expected to be required to settle the obligation is recognised at present value. When a provision i
s
measured at present value
,
the unwinding of the discount is recognised as a finance cost in
profit
or
loss
in the period
in which
it arises.
1.11
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.
1.12
Retirement benefits
Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.
1.13
Leases
Rentals payable under operating leases,
including
any lease incentives received, are charged to
profit or loss
on a straight line basis over the term of the relevant lease except where another more systematic basis is more representative of the time pattern in which economic benefits from the lease
s
asset are consumed.
1.14
Government grants
Government grants are recognised at the fair value of the asset receive
d
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.
1.15
Foreign exchange
Transactions in currencies other than
pounds sterling
are recorded at the rates of exchange prevailing at the dates of the transactions. At each reporting end date, monetary assets and liabilities that are denominated in foreign currencies are retranslated at the rates prevailing on the reporting end date. Gains and losses arising on translation
in the period
are included in profit or loss.
EUROPEAN SPRINGS AND PRESSINGS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2021
- 15 -
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.
Impairment of non-financial assets
Where there are indications of impairment of individual assets, the company performs impairment tests based on fair value less costs to sell. The fair value is based on the knowledge of the management.
Stock impairment
Where there are indications of impairment of stock items, the company makes a provision against the value of the stock item based on the knowledge of the management.
Dilapidation provision
The company has made provision for expected future costs in relation to dilapidations. The value is based upon the knowledge of management.
Critical areas of judgement
In categorising leases as finance leases or operating leases, management makes judgements as to whether significant risks and rewards of ownership have transferred to the Company as lessee.
Development expenditure is written off in the period in which it is incurred.
The company makes
tax
provisions based on reasonable
judgements
. The amount of such provision is based on various factors, such as experience with previous tax audits and interpretations of tax regulations.
EUROPEAN SPRINGS AND PRESSINGS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2021
- 16 -
3
Turnover
2021
2020
£
£
Turnover analysed by geographical market
United Kingdom
10,928,243
12,297,439
Rest of Europe
13,170,000
8,725,103
Rest of the world
2,036,000
889,179
26,134,243
21,911,721
4
Operating profit
2021
2020
Operating profit for the year is stated after charging/(crediting):
£
£
Exchange losses
22,552
23,694
Research and development tax credit
(142,769)
Government grants
(14,391)
(306,950)
Depreciation of owned tangible fixed assets
836,904
962,440
Loss/(profit) on disposal of tangible fixed assets
37,275
(10,183)
Operating lease charges
323,489
324,940
5
Auditor's remuneration
2021
2020
Fees payable to the company's auditor and associates:
£
£
For audit services
Audit of the financial statements of the company
30,164
29,164
For other services
Other taxation services
1,000
1,000
6
Employees
The average monthly number of persons (including directors) employed by the company during the year was:
2021
2020
Number
Number
Production
106
108
Office and management
66
47
Total
172
155
EUROPEAN SPRINGS AND PRESSINGS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2021
6
Employees
(Continued)
- 17 -
Their aggregate remuneration comprised:
2021
2020
£
£
Wages and salaries
5,019,657
4,552,588
Social security costs
459,343
393,191
Pension costs
161,622
144,000
5,640,622
5,089,779
7
Directors' remuneration
2021
2020
£
£
Remuneration for qualifying services
353,917
338,182
Company pension contributions to defined contribution schemes
11,524
10,993
365,441
349,175
The number of directors for whom retirement benefits are accruing under defined contribution schemes amounted to 3 (2020 - 3).
Remuneration disclosed above include the following amounts paid to the highest paid director:
2021
2020
£
£
Remuneration for qualifying services
132,504
132,797
Company pension contributions to defined contribution schemes
3,170
3,170
8
Interest receivable and similar income
2021
2020
£
£
Interest income
Interest on bank deposits
533
790
9
Interest payable and similar expenses
2021
2020
£
£
Interest on bank overdrafts and loans
38,200
38,692
EUROPEAN SPRINGS AND PRESSINGS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2021
- 18 -
10
Taxation
2021
2020
£
£
Current tax
UK corporation tax on profits for the current period
1,055,969
963,213
Deferred tax
Origination and reversal of timing differences
144,339
(21,968)
Changes in tax rates
121,167
42,701
Total deferred tax
265,506
20,733
Total tax charge
1,321,475
983,946
The actual charge for the year can be reconciled to the expected charge for the year based on the profit or loss and the standard rate of tax as follows:
2021
2020
£
£
Profit before taxation
6,459,162
4,915,764
Expected tax charge based on the standard rate of corporation tax in the UK of 19.00% (2020: 19.00%)
1,227,241
933,995
Tax effect of expenses that are not deductible in determining taxable profit
392
575
Adjustments in respect of prior years
(3,460)
Research and development tax credit
11,248
Fixed asset difference
(35,113)
6,675
Remeasurement of deferred tax for changes in tax rates
121,167
42,701
Taxation charge for the year
1,321,475
983,946
11
Dividends
2021
2020
£
£
Final paid
5,000,000
5,000,000
EUROPEAN SPRINGS AND PRESSINGS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2021
- 19 -
12
Tangible fixed assets
Freehold land and buildings
Leasehold improvements
Assets under construction
Plant and equipment
Motor vehicles
Total
£
£
£
£
£
£
Cost
At 1 January 2021
2,217,287
283,290
26,203
11,143,881
1,739,178
15,409,839
Additions
74,728
18,225
173,814
519,325
276,254
1,062,346
Disposals
(168,682)
(74,039)
(242,721)
Transfers
(26,203)
26,203
At 31 December 2021
2,292,015
301,515
173,814
11,520,727
1,941,393
16,229,464
Depreciation and impairment
At 1 January 2021
147,114
1,049
7,354,440
1,111,727
8,614,330
Depreciation charged in the year
34,857
5,893
610,025
186,129
836,904
Eliminated in respect of disposals
(139,044)
(63,738)
(202,782)
At 31 December 2021
181,971
6,942
7,825,421
1,234,118
9,248,452
Carrying amount
At 31 December 2021
2,110,044
294,573
173,814
3,695,306
707,275
6,981,012
At 31 December 2020
2,070,173
282,241
26,203
3,789,441
627,451
6,795,509
13
Stocks
2021
2020
£
£
Raw materials and consumables
2,716,455
2,424,298
Work in progress
502,318
367,295
Finished goods and goods for resale
1,616,282
1,522,716
4,835,055
4,314,309
14
Debtors
2021
2020
Amounts falling due within one year:
£
£
Trade debtors
2,156,011
2,018,496
Corporation tax recoverable
406,090
Amounts owed by group undertakings
1,675,066
1,185,086
Prepayments and accrued income
114,042
135,764
4,351,209
3,339,346
Amounts owed by group undertakings are unsecured, interest free and repayable on demand.
EUROPEAN SPRINGS AND PRESSINGS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2021
- 20 -
15
Creditors: amounts falling due within one year
2021
2020
£
£
Government grants
18,889
18,889
Trade creditors
2,059,855
734,982
Amounts due to group undertakings
1,038,708
300,508
Corporation tax
95,935
Other taxation and social security
392,011
374,799
Other creditors
178,497
357,698
Accruals and deferred income
125,135
250,603
3,813,095
2,133,414
Amounts owed to group undertakings are unsecured, interest free and repayable on demand.
16
Creditors: amounts falling due after more than one year
2021
2020
£
£
Bank loans and overdrafts
17
1,000,000
1,000,000
Government grants
17,315
36,204
1,017,315
1,036,204
Creditors include amounts of deferred government grants which are of a capital nature. The grant will be recognised in the profit and loss account over the expected useful economic life of the asset which is 10 years.
The long-term loans are secured by fixed charges over the land and building.
17
Loans and overdrafts
2021
2020
£
£
Bank loans
1,000,000
1,000,000
Payable after one year
1,000,000
1,000,000
The loan is repayable in one instalment on 2 October 2023, being five years from the date on which the loan is made. Interest of 3.82% is charged.
The loan is secured by way of a fixed charge over property held in the company.
EUROPEAN SPRINGS AND PRESSINGS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2021
- 21 -
18
Deferred taxation
The following are the major deferred tax liabilities and assets recognised by the company and movements thereon:
Liabilities
Liabilities
2021
2020
Balances:
£
£
Accelerated capital allowances
649,198
383,692
2021
Movements in the year:
£
Liability at 1 January 2021
383,692
Charge to profit or loss
265,506
Liability at 31 December 2021
649,198
19
Retirement benefit schemes
2021
2020
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
161,622
144,000
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. At the year end £nil (2020 - £19,816) was due to the fund.
20
Provisions for liabilities
2021
2020
Notes
£
£
Dilapidation provision
230,000
230,000
Deferred tax liabilities
18
649,198
383,692
879,198
613,692
21
Share capital
2021
2020
£
£
Ordinary share capital
Issued and fully paid
500 Ordinary share of £1 each
500
500
100 Ordinary A share of £1 each
100
100
600
600
EUROPEAN SPRINGS AND PRESSINGS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2021
- 22 -
22
Operating lease commitments
Lessee
At the reporting end date the company had outstanding commitments for future minimum lease payments under non-cancellable operating leases, which fall due as follows:
2021
2020
£
£
Within one year
309,093
292,155
Between two and five years
783,687
957,020
1,092,780
1,249,175
23
Capital commitments
Amounts contracted for but not provided in the financial statements:
2021
2020
£
£
Acquisition of tangible fixed assets
173,814
34,855
24
Events after the reporting date
On 1 February 2022, the company transferred at net book value the trade and assets of its Cornwall based spring manufacturing division to a separate fellow subsidiary company within the group. During the year ended 31 December 2021, the Cornwall division contributed £14,839k towards the company's turnover for the year.
25
Ultimate controlling party
The company's ultimate holding company is Beijer Alma AB which is registered in Sweden (no 5562297480), for which group accounts are prepared.
Copies of the group accounts can be obtained from the Registered Office of European Springs and Pressings Limited at Chaffinch Business Park, Croydon Road, Beckenham, Kent, BR3 4DW.
2021-12-31
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