Company registration number 04528905 (England and Wales)
FINE-CAST FOUNDRY LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2023
FINE-CAST FOUNDRY LIMITED
COMPANY INFORMATION
Directors
D Gratton-Heatley
C J G Heatley
Secretary
C P Gratton-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 - 7
Statement of comprehensive income
8
Balance sheet
9
Statement of changes in equity
10
Statement of cash flows
11
Notes to the financial statements
12 - 24
FINE-CAST FOUNDRY LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 31 MARCH 2023
- 1 -
The directors present the strategic report for the year ended 31 March 2023.
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 a profit before tax of £1,692,680 in the year ended 31 March 2023 compared to £970,388 in the year to 31 March 2022, and has seen an increase in gross profit margin to 39% in 31 March 2023 compared to 36% in 31 March 2022, a marked improvement following the challenging environment that the company had been operating in during BREXIT and the COVID-19 pandemic.
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.
The company has been able to benefit from the the downturn in the general market conditions by utilising the time to build for a better and brighter future in the coming years, with the benefits starting to be seen in 2023.
C J G Heatley
Director
21 December 2023
FINE-CAST FOUNDRY LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 MARCH 2023
- 2 -
The directors present their annual report and financial statements for the year ended 31 March 2023.
Principal activities
The principal activity of the company continued to be that of manufacture of precision non ferrous castings
Results and dividends
The results for the year are set out on page 8.
Ordinary dividends were paid amounting to £799,500. 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:
D Gratton-Heatley
C J G Heatley
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.
Medium-sized companies exemption
This report has been prepared in accordance with the provisions applicable to companies entitled to the medium-sized companies exemption.
On behalf of the board
C J G Heatley
Director
21 December 2023
FINE-CAST FOUNDRY LIMITED
DIRECTORS' RESPONSIBILITIES STATEMENT
FOR THE YEAR ENDED 31 MARCH 2023
- 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 2023 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 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 March 2023 and of its profit for the year then ended;
have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and
have been prepared in accordance with the requirements of the Companies Act 2006.
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditor's responsibilities for the audit of the financial statements section of our report. We are independent of the company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC’s Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Conclusions relating to going concern
In auditing the financial statements, we have concluded that the directors' use of the going concern basis of accounting in the preparation of the financial statements is appropriate.
Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the company's ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.
Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.
The other information comprises the information included in the annual report other than the financial statements and our auditor's report thereon. The directors are responsible for the other information contained within the annual report. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the course of the audit, or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.
We have nothing to report in this regard.
Opinions on other matters prescribed by the Companies Act 2006
In our opinion, based on the work undertaken in the course of our audit:
the information given in the strategic report and the directors' report for the financial year for which the financial statements are prepared is consistent with the financial statements; and
the strategic report and the directors' report have been prepared in accordance with applicable legal requirements.
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 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.
The extent to which our procedures are capable of detecting irregularities, including fraud, is detailed below.
We obtained an understanding of the legal and regulatory frameworks applicable to the company in the sector in which it operates. We determined that the following laws and regulations were most significant: the Companies Act 2006 and UK Corporate Taxation Laws.
We considered the nature of the industry and sector, control environment and business performance including the design of the company’s remuneration policies, bonus levels and performance targets.
We obtained an understanding of how the company is compliant with those legal and regulatory frameworks be making enquiries to the management.
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: Revenue recognition and transactions with related parties. In common with all audits under ISAs (UK), we are also required to perform specific procedures to respond to the risk of management override.
FINE-CAST FOUNDRY LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF FINE-CAST FOUNDRY LIMITED
- 6 -
We assessed the susceptibility of the company's financial statements to material misstatement in respect of irregularities, including fraud and non-compliance with laws and regulations. Audit procedures were performed by the engagement team, including:
In addressing the risk of fraud through management override of controls, we tested the appropriateness of journal entries and other adjustments, assessed whether the judgements made in making accounting estimates are indicative of a potential bias and tested significant transactions that are unusual or those outside the normal course of business.
Because of the inherent limitations of an audit, there is an unavoidable risk that we will not detect all irregularities, including those leading to a material misstatement in the financial statements or non-compliance with regulation. This risk increases the more that compliance with a law or regulation is removed from the events and transactions reflected in the financial statements, as we will be less likely to become aware of instances of non-compliance. The risk is also greater regarding irregularities occurring due to fraud rather than error, as fraud involves intentional concealment, forgery, collusion, omission or misrepresentation.
A further description of our responsibilities is available on the Financial Reporting Council’s website at: 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.
FINE-CAST FOUNDRY LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF FINE-CAST FOUNDRY LIMITED
- 7 -
Matthew Pedder BA(Hons) FCA
Senior Statutory Auditor
For and on behalf of PHH Accountancy Limited
21 December 2023
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 2023
- 8 -
2023
2022
Notes
£
£
Turnover
3
8,708,309
6,347,609
Cost of sales
(5,323,673)
(4,039,997)
Gross profit
3,384,636
2,307,612
Administrative expenses
(1,666,866)
(1,390,693)
Other operating income
46,857
Operating profit
4
1,717,770
963,776
Interest receivable and similar income
7
8
36
Interest payable and similar expenses
8
(24,748)
(17,185)
Amounts written off investments
9
(350)
23,761
Profit before taxation
1,692,680
970,388
Tax on profit
10
(116,239)
49,879
Profit for the financial year
1,576,441
1,020,267
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 2023
31 March 2023
- 9 -
2023
2022
Notes
£
£
£
£
Fixed assets
Tangible assets
12
2,356,106
1,254,156
Current assets
Stocks
13
264,521
192,054
Debtors
14
4,129,991
4,435,812
Cash at bank and in hand
1,363,190
954,746
5,757,702
5,582,612
Creditors: amounts falling due within one year
15
(1,571,051)
(1,158,701)
Net current assets
4,186,651
4,423,911
Total assets less current liabilities
6,542,757
5,678,067
Creditors: amounts falling due after more than one year
16
(394,010)
(525,000)
Provisions for liabilities
Deferred tax liability
19
390,660
171,921
(390,660)
(171,921)
Net assets
5,758,087
4,981,146
Capital and reserves
Called up share capital
21
700
700
Capital redemption reserve
300
300
Profit and loss reserves
5,757,087
4,980,146
Total equity
5,758,087
4,981,146
These financial statements have been prepared in accordance with the provisions relating to medium-sized companies.true
The financial statements were approved by the board of directors and authorised for issue on 21 December 2023 and are signed on its behalf by:
C J G Heatley
Director
Company registration number 04528905 (England and Wales)
FINE-CAST FOUNDRY LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 MARCH 2023
- 10 -
Share capital
Capital redemption reserve
Profit and loss reserves
Total
Notes
£
£
£
£
Balance at 1 April 2021
700
300
6,613,029
6,614,029
Year ended 31 March 2022:
Profit and total comprehensive income
-
-
1,020,267
1,020,267
Dividends
11
-
-
(2,653,150)
(2,653,150)
Balance at 31 March 2022
700
300
4,980,146
4,981,146
Year ended 31 March 2023:
Profit and total comprehensive income
-
-
1,576,441
1,576,441
Dividends
11
-
-
(799,500)
(799,500)
Balance at 31 March 2023
700
300
5,757,087
5,758,087
FINE-CAST FOUNDRY LIMITED
STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 MARCH 2023
- 11 -
2023
2022
Notes
£
£
£
£
Cash flows from operating activities
Cash generated from operations
26
2,872,953
1,145,359
Interest paid
(24,748)
(17,185)
Income taxes refunded
126,735
6,844
Net cash inflow from operating activities
2,974,940
1,135,018
Investing activities
Purchase of tangible fixed assets
(1,593,181)
(18,839)
Repayment of loans
10,759
93,465
Interest received
8
36
Net cash (used in)/generated from investing activities
(1,582,414)
74,662
Financing activities
Repayment of bank loans
(140,000)
(26,138)
Payment of finance leases obligations
(44,582)
(99,640)
Dividends paid
(799,500)
(2,653,150)
Net cash used in financing activities
(984,082)
(2,778,928)
Net increase/(decrease) in cash and cash equivalents
408,444
(1,569,248)
Cash and cash equivalents at beginning of year
954,746
2,523,994
Cash and cash equivalents at end of year
1,363,190
954,746
FINE-CAST FOUNDRY LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2023
- 12 -
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 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 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 fully recovered its trading position following the legacy of the COVID-19 pandemic, therefore atruet the time of approving the financial statements, the directors have continued 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.
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.
FINE-CAST FOUNDRY LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
1
Accounting policies
(Continued)
- 13 -
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
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.
1.7
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.
1.8
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.
FINE-CAST FOUNDRY LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
1
Accounting policies
(Continued)
- 14 -
Impairment of financial assets
Financial assets, other than those held at fair value through profit and loss, are assessed for indicators of impairment at each reporting end date.
Financial assets are impaired where there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial asset, the estimated future cash flows have been affected. If an asset is impaired, the impairment loss is the difference between the carrying amount and the present value of the estimated cash flows discounted at the asset’s original effective interest rate. The impairment loss is recognised in profit or loss.
If there is a decrease in the impairment loss arising from an event occurring after the impairment was recognised, the impairment is reversed. The reversal is such that the current carrying amount does not exceed what the carrying amount would have been, had the impairment not previously been recognised. The impairment reversal is recognised in profit or loss.
Derecognition of financial assets
Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire or are settled, or when the company transfers the financial asset and substantially all the risks and rewards of ownership to another entity, or if some significant risks and rewards of ownership are retained but control of the asset has transferred to another party that is able to sell the asset in its entirety to an unrelated third party.
Classification of financial liabilities
Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the company after deducting all of its liabilities.
Basic financial liabilities
Basic financial liabilities, including creditors, bank loans, 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.
FINE-CAST FOUNDRY LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
1
Accounting policies
(Continued)
- 15 -
Derecognition of financial liabilities
Financial liabilities are derecognised when the company’s contractual obligations expire or are discharged or cancelled.
1.9
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.
1.10
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.
1.11
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.
1.12
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.
FINE-CAST FOUNDRY LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
1
Accounting policies
(Continued)
- 16 -
1.13
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 leases asset are consumed.
1.14
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.
1.15
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.
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
2023
2022
£
£
Turnover analysed by class of business
Castings, patterns and machining
8,023,064
5,763,369
Other
685,245
584,240
8,708,309
6,347,609
FINE-CAST FOUNDRY LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
3
Turnover and other revenue
(Continued)
- 17 -
2023
2022
£
£
Turnover analysed by geographical market
United Kingdom
4,546,163
4,005,426
Europe
3,379,531
819,175
Rest of the world
782,615
1,523,008
8,708,309
6,347,609
2023
2022
£
£
Other revenue
Interest income
8
36
Grants received
-
46,857
4
Operating profit
2023
2022
Operating profit for the year is stated after charging/(crediting):
£
£
Exchange gains
(67,907)
(15,499)
Government grants
-
(46,857)
Fees payable to the company's auditor for the audit of the company's financial statements
5,500
5,000
Depreciation of owned tangible fixed assets
446,355
309,920
Depreciation of tangible fixed assets held under finance leases
44,876
53,115
Impairment of stocks recognised or reversed
417,418
281,924
Operating lease charges
216,426
202,767
5
Employees
The average monthly number of persons (including directors) employed by the company during the year was:
2023
2022
Number
Number
Directors
2
2
Management
9
7
Production
47
46
Administrative
5
5
Total
63
60
FINE-CAST FOUNDRY LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
5
Employees
(Continued)
- 18 -
Their aggregate remuneration comprised:
2023
2022
£
£
Wages and salaries
1,831,247
1,446,661
Social security costs
139,691
110,964
Pension costs
123,215
117,017
2,094,153
1,674,642
6
Directors' remuneration
2023
2022
£
£
Remuneration for qualifying services
19,987
17,680
Company pension contributions to defined contribution schemes
40,000
41,400
59,987
59,080
7
Interest receivable and similar income
2023
2022
£
£
Interest income
Other interest income
8
36
8
Interest payable and similar expenses
2023
2022
£
£
Interest on financial liabilities measured at amortised cost:
Interest on bank overdrafts and loans
22,121
12,180
Other finance costs:
Interest on finance leases and hire purchase contracts
2,627
4,989
Other interest
16
24,748
17,185
9
Amounts written off investments
2023
2022
£
£
Amounts (written off)/written back to current loans
(350)
23,761
FINE-CAST FOUNDRY LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
- 19 -
10
Taxation
2023
2022
£
£
Current tax
UK corporation tax on profits for the current period
(102,500)
Deferred tax
Origination and reversal of timing differences
218,739
(49,879)
Total tax charge/(credit)
116,239
(49,879)
The actual charge/(credit) for the year can be reconciled to the expected charge for the year based on the profit or loss and the standard rate of tax as follows:
2023
2022
£
£
Profit before taxation
1,692,680
970,388
Expected tax charge based on the standard rate of corporation tax in the UK of 19.00% (2022: 19.00%)
321,609
184,374
Permanent capital allowances in excess of depreciation
(321,609)
54,350
Research and development tax credit
(102,500)
(234,684)
Under/(over) provided in prior years
(4,040)
Deferred tax movement
218,739
(49,879)
Taxation charge/(credit) for the year
116,239
(49,879)
11
Dividends
2023
2022
£
£
Final paid
799,500
2,653,150
FINE-CAST FOUNDRY LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
- 20 -
12
Tangible fixed assets
Land and buildings Leasehold
Plant and machinery
Computer equipment
Motor vehicles
Total
£
£
£
£
£
Cost
At 1 April 2022
553,236
3,220,628
128,203
5,600
3,907,667
Additions
17,794
1,518,783
13,410
43,194
1,593,181
At 31 March 2023
571,030
4,739,411
141,613
48,794
5,500,848
Depreciation and impairment
At 1 April 2022
293,601
2,254,634
99,677
5,599
2,653,511
Depreciation charged in the year
32,022
444,774
9,396
5,039
491,231
At 31 March 2023
325,623
2,699,408
109,073
10,638
3,144,742
Carrying amount
At 31 March 2023
245,407
2,040,003
32,540
38,156
2,356,106
At 31 March 2022
259,635
965,994
28,526
1
1,254,156
The net carrying value of tangible fixed assets includes the following in respect of assets held under finance leases or hire purchase contracts.
2023
2022
£
£
Plant and machinery
159,346
Motor vehicles
38,155
38,155
159,346
13
Stocks
2023
2022
£
£
Finished goods and goods for resale
264,521
192,054
FINE-CAST FOUNDRY LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
- 21 -
14
Debtors
2023
2022
Amounts falling due within one year:
£
£
Trade debtors
1,923,730
1,708,799
Corporation tax recoverable
144,705
168,940
Amounts owed by group undertakings
44,064
160,069
Other debtors
1,951,209
2,361,091
Prepayments and accrued income
66,283
36,913
4,129,991
4,435,812
15
Creditors: amounts falling due within one year
2023
2022
Notes
£
£
Bank loans
17
140,000
140,000
Obligations under finance leases
18
17,098
70,690
Trade creditors
928,933
837,031
Amounts owed to group undertakings
369,638
Taxation and social security
49,878
36,548
Other creditors
18,144
32,461
Accruals and deferred income
47,360
41,971
1,571,051
1,158,701
The obligations under finance leases of £17,098 (2022 - £70,690) are secured by the related the assets of the company.
16
Creditors: amounts falling due after more than one year
2023
2022
Notes
£
£
Bank loans and overdrafts
17
385,000
525,000
Obligations under finance leases
18
9,010
394,010
525,000
The obligations under finance leases of £9,010 (2022 - £nil) are secured by the related assets of the company.
FINE-CAST FOUNDRY LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
- 22 -
17
Loans and overdrafts
2023
2022
£
£
Bank loans
525,000
665,000
Payable within one year
140,000
140,000
Payable after one year
385,000
525,000
The Coronavirus Business Interruption Loan has been provided over a 6 year period, with the first instalment being paid 13 months after the initial draw down. No repayments of capital were made during the first 12 months of the loan. Interest is charged on the loan at a rate of 1.69% per annum over the Bank of England base rate.
18
Finance lease obligations
2023
2022
Future minimum lease payments due under finance leases:
£
£
Within one year
18,380
71,299
In two to five years
9,190
27,570
71,299
Less: future finance charges
(1,462)
(609)
26,108
70,690
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 2023 is 18 months. All leases are on a fixed repayment basis and no arrangements have been entered into for contingent rental payments.
19
Deferred taxation
The following are the major deferred tax liabilities and assets recognised by the company and movements thereon:
Liabilities
Liabilities
2023
2022
Balances:
£
£
Accelerated capital allowances
390,660
171,921
FINE-CAST FOUNDRY LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
19
Deferred taxation
(Continued)
- 23 -
2023
Movements in the year:
£
Liability at 1 April 2022
171,921
Charge to profit or loss
218,739
Liability at 31 March 2023
390,660
20
Retirement benefit schemes
2023
2022
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
123,215
117,017
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.
21
Share capital
2023
2022
2023
2022
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary A of £1 each
420
420
420
420
Ordinary B of £1 each
138
138
140
140
Ordinary C of £1 each
140
140
138
138
Ordinary D of £1 each
2
2
2
2
700
700
700
700
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:
2023
2022
£
£
Within one year
229,988
178,905
Between two and five years
265,181
122,168
495,169
301,073
23
Related party transactions
FINE-CAST FOUNDRY LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
23
Related party transactions
(Continued)
- 24 -
During the year the company provided an interest free loan of £1,680,774 (2022 - £1,803,526) 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.
24
Directors' transactions
During the year the company provided an interest free loan of £222,585 (2022 - £233,694) to the directors, maximum balance outstanding during the year £233,694. The loan has been provided without any formal repayment terms.
25
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.
26
Cash generated from operations
2023
2022
£
£
Profit for the year after tax
1,576,441
1,020,267
Adjustments for:
Taxation charged/(credited)
116,239
(49,879)
Finance costs
24,748
17,185
Investment income
(8)
(36)
Depreciation and impairment of tangible fixed assets
491,231
363,035
Other gains and losses
350
(23,761)
Movements in working capital:
Increase in stocks
(72,467)
(31,831)
Decrease/(increase) in debtors
270,477
(342,606)
Increase in creditors
465,942
201,847
Decrease in deferred income
-
(8,862)
Cash generated from operations
2,872,953
1,145,359
27
Analysis of changes in net funds
1 April 2022
Cash flows
31 March 2023
£
£
£
Cash at bank and in hand
954,746
408,444
1,363,190
Borrowings excluding overdrafts
(665,000)
140,000
(525,000)
Obligations under finance leases
(70,690)
44,582
(26,108)
219,056
593,026
812,082
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