Company Registration No. 04528905 (England and Wales)
FINE-CAST FOUNDRY LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2020
FINE-CAST FOUNDRY LIMITED
COMPANY INFORMATION
Directors
D Gratton-Heatley
C J G Heatley
Company number
04528905
Registered office
Second Floor
3 Liverpool Gardens
Worthing
West Sussex
BN11 1TF
Auditor
PHH Accountancy Limited
Second Floor
3 Liverpool Gardens
Worthing
West Sussex
BN11 1TF
Business address
Unit 1 Lineside Way
Lineside Industrial Estate
Littlehampton
West Sussex
England
BN17 7EH
FINE-CAST FOUNDRY LIMITED
CONTENTS
Page
Strategic report
1
Directors' report
2
Directors' responsibilities statement
3
Independent auditor's report
4 - 5
Statement of comprehensive income
6
Balance sheet
7
Statement of changes in equity
8
Statement of cash flows
9
Notes to the financial statements
10 - 24
FINE-CAST FOUNDRY LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 31 MARCH 2020
- 1 -
The directors present the strategic report for the year ended 31 March 2020.
Fair review of the business
The company continues to develop, engineer and manufacture high integrity, complex castings for a range of industries. All design, casting and verification services are in-house including machining, finishing and sub-assembly as required.
Results and Performance
The company has used two key performance indicators to access the performance of the company, being profit before taxation and gross profit margin.
The company has reported profit before tax of £1.53 million in 2020 compared to £2.35 million in 2019 and it has seen an increase in gross profit margin from 40.6% in 2019 to 42.2% in 2020 despite a decrease in turnover from £8.12 million in 2020 compared to £10.55 million in 2019.
Future Developments
The company continues to invest in its R&D program to ensure that its in-house expertise and processing techniques are industry leading and it can continue to remain competitive and offer services to a global market. To achieve this the company has budgeted to spend in excess of £1m on R&D projects in the next twelve months.
The company is also committed to laying the foundations of its continued success through apprenticeship schemes and graduate placement recruitment.
C J G Heatley
Director
30 March 2021
FINE-CAST FOUNDRY LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 MARCH 2020
- 2 -
The directors present their annual report and financial statements for the year ended 31 March 2020.
Principal activities
The principal activity of the company continued to be that of
manufacture of precision non ferrous castings
Directors
The directors who held office during the year and up to the date of signature of the financial statements were as follows:
D Gratton-Heatley
C J G Heatley
Results and dividends
The results for the year are set out on page 6.
Ordinary dividends were paid amounting to £376,879. The directors do not recommend payment of a further dividend.
Auditor
PHH Accountancy Limited were appointed as auditor to the company and in accordance with section 485 of the Companies Act 2006, a resolution proposing that they be re-appointed will be put at a General Meeting.
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
C J G Heatley
Director
30 March 2021
FINE-CAST FOUNDRY LIMITED
DIRECTORS' RESPONSIBILITIES STATEMENT
FOR THE YEAR ENDED 31 MARCH 2020
- 3 -
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.
FINE-CAST FOUNDRY LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF FINE-CAST FOUNDRY LIMITED
- 4 -
Opinion
We have audited the financial statements of Fine-Cast Foundry Limited (the 'company') for the year ended 31 March 2020 which comprise the statement of comprehensive income, the balance sheet, the statement of changes in equity, the statement of cash flows and notes to the financial statements, including a summary of significant accounting policies.
The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including FRS 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 March 2020 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
We have nothing to report in respect of the following matters in relation to which the ISAs (UK) require us to report to you where:
-
the directors' use of the going concern basis of accounting in the preparation of the financial statements is not appropriate; or
-
the directors have not disclosed in the financial statements any identified material uncertainties that may cast significant doubt about the company’s ability to continue to adopt the going concern basis of accounting for a period of at least twelve months from the date when the financial statements are authorised for issue
.
The directors are responsible for the other information. The other information comprises the information included in the annual report, other than the financial statements and our auditor’s report thereon. Our opinion on the
financial statements
does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon.
In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether there is a material misstatement in the financial statements or a material misstatement of the other information. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.
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.
FINE-CAST FOUNDRY LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF FINE-CAST FOUNDRY 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 and the directors'
r
eport
.
We have nothing to report in respect of the following matters where the Companies Act 2006 requires us to report to you if, in our opinion:
-
adequate accounting records have not been kept, 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 directors' remuneration specified by law are not made; or
-
we have not received all the information and explanations we require for our audit.
Responsibilities of directors
As explained more fully in the 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.
A further description of our responsibilities for the audit of the financial statements is located on the
Financial Reporting Council’s website at: http://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.
Matthew Pedder BA(Hons) FCA (Senior Statutory Auditor)
for and on behalf of PHH Accountancy Limited
30 March 2021
Chartered Accountants
Statutory Auditor
Second Floor
3 Liverpool Gardens
Worthing
West Sussex
BN11 1TF
FINE-CAST FOUNDRY LIMITED
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 MARCH 2020
- 6 -
2020
2019
Notes
£
£
Turnover
3
8,119,789
10,546,299
Cost of sales
(4,696,059)
(6,269,627)
Gross profit
3,423,730
4,276,672
Administrative expenses
(1,883,615)
(1,868,077)
Other operating income
-
273,500
Operating profit
4
1,540,115
2,682,095
Interest receivable and similar income
7
614
389
Interest payable and similar expenses
8
(6,733)
(11,673)
Amounts written off investments
9
-
(324,948)
Profit before taxation
1,533,996
2,345,863
Tax on profit
10
160,088
(147,030)
Profit for the financial year
1,694,084
2,198,833
The profit and loss account has been prepared on the basis that all operations are continuing operations.
FINE-CAST FOUNDRY LIMITED
BALANCE SHEET
AS AT
31 MARCH 2020
31 March 2020
- 7 -
2020
2019
Notes
£
£
£
£
Fixed assets
Tangible assets
12
1,468,533
1,496,284
Investments
13
-
80
1,468,533
1,496,364
Current assets
Stocks
14
247,311
319,090
Debtors
15
5,071,730
4,590,514
Cash at bank and in hand
1,098,603
483,946
6,417,644
5,393,550
Creditors: amounts falling due within one year
16
(939,156)
(1,313,088)
Net current assets
5,478,488
4,080,462
Total assets less current liabilities
6,947,021
5,576,826
Creditors: amounts falling due after more than one year
17
(132,700)
(90,070)
Provisions for liabilities
19
(205,000)
(194,640)
Net assets
6,609,321
5,292,116
Capital and reserves
Called up share capital
22
700
700
Capital redemption reserve
300
300
Profit and loss reserves
6,608,321
5,291,116
Total equity
6,609,321
5,292,116
The financial statements were approved by the board of directors and authorised for issue on 30 March 2021 and are signed on its behalf by:
C J G Heatley
Director
Company Registration No. 04528905
FINE-CAST FOUNDRY LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 MARCH 2020
- 8 -
Share capital
Capital redemption reserve
Profit and loss reserves
Total
Notes
£
£
£
£
Balance at 1 April 2018
700
300
3,407,783
3,408,783
Year ended 31 March 2019:
Profit and total comprehensive income for the year
-
-
2,198,833
2,198,833
Dividends
11
-
-
(315,500)
(315,500)
Balance at 31 March 2019
700
300
5,291,116
5,292,116
Year ended 31 March 2020:
Profit and total comprehensive income for the year
-
-
1,694,084
1,694,084
Dividends
11
-
-
(376,879)
(376,879)
Balance at 31 March 2020
700
300
6,608,321
6,609,321
FINE-CAST FOUNDRY LIMITED
STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 MARCH 2020
- 9 -
2020
2019
Notes
£
£
£
£
Cash flows from operating activities
Cash generated from operations
27
1,508,569
531,009
Interest paid
(6,733)
(11,673)
Income taxes refunded/(paid)
14,923
(83,818)
Net cash inflow from operating activities
1,516,759
435,518
Investing activities
Purchase of tangible fixed assets
(339,270)
(513,733)
Proceeds on disposal of tangible fixed assets
-
20
Proceeds on disposal of subsidiaries
80
-
Proceeds on disposal of investments
-
(324,948)
Receipts arising from loans made
(223,503)
131,991
Interest received
614
389
Net cash used in investing activities
(562,079)
(706,281)
Financing activities
Payment of finance leases obligations
36,856
(94,130)
Dividends paid
(376,879)
(315,500)
Net cash used in financing activities
(340,023)
(409,630)
Net increase/(decrease) in cash and cash equivalents
614,657
(680,393)
Cash and cash equivalents at beginning of year
483,946
1,164,339
Cash and cash equivalents at end of year
1,098,603
483,946
FINE-CAST FOUNDRY LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2020
- 10 -
1
Accounting policies
Company information
Fine-Cast Foundry Limited is a
private
company
limited by shares
incorporated in England and Wales.
The registered office is
Second Floor, 3 Liverpool Gardens, Worthing, West Sussex, BN11 1TF.
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, modified to include the revaluation of freehold properties and to include investment properties and certain financial instruments at fair value. The principal accounting policies adopted are set out below.
1.2
Going concern
The company has experienced some operational disruption following the UK leaving the EU and the current COVID-19 pandemic but the company has sufficient resources to deal with the challenging climate. Therefore 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.
When cash inflows are deferred and represent a financing arrangement, the fair value of the consideration is the present value of the future receipts. The difference between the fair value of the consideration and the nominal amount received is recognised as interest income.
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:
Land and buildings Leasehold
Over 10 year lease
Plant and machinery
25% reducing balance basis per annum
Computer equipment
25% reducing balance basis per annum
Motor vehicles
20% straight line basis per annum
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
.
FINE-CAST FOUNDRY LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2020
1
Accounting policies
(Continued)
- 11 -
1.5
Fixed asset investments
Interests in subsidiaries, associates and jointly controlled 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
Borrowing costs related to fixed assets
Borrowing costs directly attributable to the acquisition, construction or production of qualifying assets, which are assets that necessarily take a substantial period of time to get ready for their intended use or sale, are added to the cost of those assets, until such time as the assets are substantially ready for their intended use or sale.
All other borrowing costs are recognised in profit or loss in the period in which they are incurred.
1.7
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.
1.8
Stocks
Stock is stated at the lower of cost and net realisable value. Work in progress is stated at its sales
value
determined by its stage of completion at the balance sheet date.
1.9
Cash and cash equivalents
Cash and cash equivalents
are basic financial assets
and
include cash in hand, deposits held at call with banks, other short-term liquid investments with original maturities of three months or less, and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities.
1.10
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.
FINE-CAST FOUNDRY LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2020
1
Accounting policies
(Continued)
- 12 -
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.
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.
FINE-CAST FOUNDRY LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2020
1
Accounting policies
(Continued)
- 13 -
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
paymen
ts 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. 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.
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
s
ubsequently 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 th
r
ough profit or loss to eliminate or reduce an accounting mismatch or if the instruments are measured and their performance evaluated on a fair value basis in accordance with a documented risk management or investment strategy.
Derecognition of financial liabilities
Financial liabilities are derecognised when the company’s contractual obligations
expire or are discharged or cancelled.
1.11
Equity instruments
Equity instruments issued by the company are recorded at the proceeds received, net of transaction costs. Dividends payable on equity instruments are recognised as liabilities once they are no longer at the discretion of the company.
1.12
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.
FINE-CAST FOUNDRY LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2020
1
Accounting policies
(Continued)
- 14 -
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.
1.13
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.
1.14
Retirement benefits
The company operates a defined contribution pension scheme for its employees. The assets of the scheme
are held separately from those of the company. The annual contributions payable are charged to the profit
and loss account.
1.15
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.
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.
1.16
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.
FINE-CAST FOUNDRY LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2020
- 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.
3
Turnover and other revenue
2020
2019
£
£
Turnover analysed by class of business
Castings, patterns and machining
7,267,271
9,720,777
Other
852,518
825,522
8,119,789
10,546,299
2020
2019
£
£
Other significant revenue
Interest income
614
389
2020
2019
£
£
Turnover analysed by geographical market
United Kingdom
4,498,707
7,423,265
Europe
2,786,326
2,652,725
Rest of the world
834,756
470,309
8,119,789
10,546,299
4
Operating profit
2020
2019
Operating profit 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
(30,912)
37,970
Depreciation of owned tangible fixed assets
312,560
290,031
Depreciation of tangible fixed assets held under finance leases
54,461
99,757
(Profit)/loss on disposal of tangible fixed assets
-
13,919
Impairment of stocks recognised or reversed
87,897
98,545
Operating lease charges
192,963
201,535
FINE-CAST FOUNDRY LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2020
- 16 -
5
Employees
The average monthly number of persons (including directors) employed by the company during the year was:
2020
2019
Number
Number
Directors
2
2
Management
2
2
Production
54
59
Administrative
5
5
Total
63
68
Their aggregate remuneration comprised:
2020
2019
£
£
Wages and salaries
2,001,907
1,997,766
Social security costs
138,309
149,929
Pension costs
116,281
111,070
2,256,497
2,258,765
6
Directors' remuneration
2020
2019
£
£
Remuneration for qualifying services
17,264
16,848
Company pension contributions to defined contribution schemes
41,400
41,400
58,664
58,248
7
Interest receivable and similar income
2020
2019
£
£
Interest income
Other interest income
614
389
FINE-CAST FOUNDRY LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2020
- 17 -
8
Interest payable and similar expenses
2020
2019
£
£
Other finance costs:
Interest on finance leases and hire purchase contracts
6,765
11,641
Other interest
(32)
32
6,733
11,673
Borrowing costs excluded from interest payable and included in the cost of assets during the year are as follows:
Construction contracts
210,591
282,013
9
Amounts written off investments
fixed asset investments
2020
2019
£
£
Amounts written back to/(written off) current loans
-
(324,948)
10
Taxation
2020
2019
£
£
Current tax
UK corporation tax on profits for the current period
(6,878)
150,314
Adjustments in respect of prior periods
(163,570)
(54,751)
Total current tax
(170,448)
95,563
Deferred tax
Origination and reversal of timing differences
10,360
51,467
Total tax (credit)/charge
(160,088)
147,030
FINE-CAST FOUNDRY LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2020
10
Taxation
(Continued)
- 18 -
The actual (credit)/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:
2020
2019
£
£
Profit before taxation
1,533,996
2,345,863
Expected tax charge based on the standard rate of corporation tax in the UK of 19.00% (2019: 19.00%)
291,459
445,714
Tax effect of expenses that are not deductible in determining taxable profit
4,098
66,899
Permanent capital allowances in excess of depreciation
(10,930)
(15,416)
Research and development tax credit
(291,505)
(374,786)
Under/(over) provided in prior years
(163,570)
(54,751)
Over provision in current year
-
43,241
Deferred tax movement
10,360
51,467
Utilisation of tax losses from previous periods
-
(15,338)
Taxation (credit)/charge for the year
(160,088)
147,030
11
Dividends
2020
2019
£
£
Final paid
376,879
315,500
FINE-CAST FOUNDRY LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2020
- 19 -
12
Tangible fixed assets
Land and buildings Leasehold
Plant and machinery
Computer equipment
Motor vehicles
Total
£
£
£
£
£
Cost
At 1 April 2019
553,236
2,302,848
117,270
5,600
2,978,954
Additions
-
328,337
10,933
-
339,270
At 31 March 2020
553,236
2,631,185
128,203
5,600
3,318,224
Depreciation and impairment
At 1 April 2019
183,265
1,235,334
61,458
2,613
1,482,670
Depreciation charged in the year
39,662
310,241
15,998
1,120
367,021
At 31 March 2020
222,927
1,545,575
77,456
3,733
1,849,691
Carrying amount
At 31 March 2020
330,309
1,085,610
50,747
1,867
1,468,533
At 31 March 2019
369,971
1,067,514
55,812
2,987
1,496,284
The net carrying value of tangible fixed assets includes the following in respect of assets held under finance leases or hire purchase contracts.
2020
2019
£
£
Plant and machinery
297,783
317,269
13
Fixed asset investments
2020
2019
Notes
£
£
Investments in subsidiaries
-
80
FINE-CAST FOUNDRY LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2020
13
Fixed asset investments
(Continued)
- 20 -
Movements in fixed asset investments
Shares in group undertakings
£
Cost or valuation
At 1 April 2019
80
Disposals
(80)
At 31 March 2020
-
Carrying amount
At 31 March 2020
-
At 31 March 2019
80
14
Stocks
2020
2019
£
£
Finished goods and goods for resale
247,311
319,090
15
Debtors
2020
2019
Amounts falling due within one year:
£
£
Trade debtors
1,732,998
1,885,287
Corporation tax recoverable
21,461
-
Amounts owed by group undertakings
292,178
-
Other debtors
2,992,715
2,670,301
Prepayments and accrued income
32,378
34,926
5,071,730
4,590,514
FINE-CAST FOUNDRY LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2020
- 21 -
16
Creditors: amounts falling due within one year
2020
2019
Notes
£
£
Obligations under finance leases
18
100,105
105,879
Trade creditors
713,960
793,338
Corporation tax
-
134,064
Other taxation and social security
34,388
50,408
Other creditors
28,874
181,915
Accruals and deferred income
61,829
47,484
939,156
1,313,088
The obligations under finance leases of £100,105 (2019 - £105,879) are secured by the related the assets of the company.
17
Creditors: amounts falling due after more than one year
2020
2019
Notes
£
£
Obligations under finance leases
18
132,700
90,070
The obligations under finance leases of £132,700 (2019 - £90,070) are secured by the related assets of the company.
18
Finance lease obligations
2020
2019
Future minimum lease payments due under finance leases:
£
£
Within one year
106,825
110,768
In two to five years
136,447
92,939
243,272
203,707
Less: future finance charges
(10,467)
(7,758)
232,805
195,949
Finance lease payments represent rentals payable by the company for certain items of plant and machinery. Leases include purchase options at the end of the lease period, and no restrictions are placed on the use of the assets. The average lease term remaining at 31 March 2020 is 20 months. All leases are on a fixed repayment basis and no arrangements have been entered into for contingent rental payments.
19
Provisions for liabilities
2020
2019
Notes
£
£
Deferred tax liabilities
20
205,000
194,640
FINE-CAST FOUNDRY LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2020
- 22 -
20
Deferred taxation
The following are the major deferred tax liabilities and assets recognised by the company and movements thereon:
Liabilities
Liabilities
2020
2019
Balances:
£
£
Accelerated capital allowances
205,000
194,640
2020
Movements in the year:
£
Liability at 1 April 2019
194,640
Charge to profit or loss
10,360
Liability at 31 March 2020
205,000
The deferred tax liability set out above is expected to reverse within 12 months and relates to accelerated capital allowances that are expected to mature within the same period.
21
Retirement benefit schemes
2020
2019
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
116,281
111,070
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.
22
Share capital
2020
2019
£
£
Ordinary share capital
Issued and fully paid
420 Ordinary A of £1 each
420
420
138 Ordinary B of £1 each
140
138
140 Ordinary C of £1 each
138
140
2 Ordinary D of £1 each
2
2
700
700
FINE-CAST FOUNDRY LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2020
- 23 -
23
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:
2020
2019
£
£
Within one year
144,000
144,000
24
Related party transactions
During the year the company provided an interest free loan of £2,629,348 (2019 - £2,517,844) to Heatcast Ltd, a company under the common control of the director, D Gratton Heatley. The loan has been provided without any formal repayment terms.
25
Directors' transactions
During the year the company provided an interest free loan of £223,503 (2019 - £nil) to C J Gratton Heatley. The loan has been provide without any formal repayment terms.
26
Ultimate controlling party
The company's results are consolidated in the financial statements of its ultimate parent company, Beacon Cast Assets Ltd, registered at 1 Lineside Way, Wick, Littlehampton, BN17 7EH.
27
Cash generated from operations
2020
2019
£
£
Profit for the year after tax
1,694,084
2,198,833
Adjustments for:
Taxation (credited)/charged
(160,088)
147,030
Finance costs
6,733
11,673
Investment income
(614)
(389)
(Gain)/loss on disposal of tangible fixed assets
-
13,919
Depreciation and impairment of tangible fixed assets
367,021
389,788
Amounts written off investments
-
324,948
Movements in working capital:
Decrease/(increase) in stocks
71,779
(66,533)
Increase in debtors
(236,252)
(2,432,871)
Decrease in creditors
(234,094)
(55,389)
Cash generated from operations
1,508,569
531,009
FINE-CAST FOUNDRY LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2020
- 24 -
28
Analysis of changes in net funds
1 April 2019
Cash flows
31 March 2020
£
£
£
Cash at bank and in hand
483,946
614,657
1,098,603
Obligations under finance leases
(195,949)
(36,856)
(232,805)
287,997
577,801
865,798
2020-03-31
2019-04-01
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