CASTALUM LIMITED
Company registration number 06771963 (England and Wales)
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
CASTALUM LIMITED
COMPANY INFORMATION
Directors
Mr P Ligertwood
Mr P Radcliffe
Mr M S Simpson
Mr P J Dodd
Mr K F Meredith
Mr M Jones
Mr S Westhorpe
Company number
06771963
Registered office
5 Buttington Cross Enterprise Park
Buttington
Welshpool
Powys
SY21 8SL
Auditor
Dyke Yaxley Limited
1 Brassey Road
Old Potts Way
Shrewsbury
Shropshire
SY3 7FA
CASTALUM LIMITED
CONTENTS
Page
Strategic report
1 - 2
Directors' report
3
Directors' responsibilities statement
4
Independent auditor's report
5 - 7
Statement of comprehensive income
8
Balance sheet
9
Statement of changes in equity
10
Notes to the financial statements
11 - 25
CASTALUM LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 31 DECEMBER 2022
- 1 -
The directors present the strategic report for the year ended 31 December 2022.
Review of the business
The year provided a return to production levels that allow the company to operate in an effective manner. The challenge of full capacity utilisation has been met by an experienced team of employees that have had to manage the ramp up of two major programs beyond original volume expectations. This has set the scene for the next three years that see these programs continue at full nominated volumes.
There was again an overall increase in employee numbers as recruitment and training continue to meet the demands of two major new programs ramping up in production volume.
We have seen a significant uplift in components destined for AFV’s, whilst also seeing previously unexpected extensions to programs supplying traditional propulsion vehicles, as the way forward remains somewhat uncertain from manufacturers. Castalum retains the enviable position of supplying a range of components that can serve all forms of power source.
ISO14000 & IATF16949 quality accreditation remains in place and additional customer audits gave good reports. Significant in these audits is the matter of employee development and welfare, and Castalum continues to develop a resource that makes best use of all skills and employee abilities.
In 2022 a new diecasting cell was installed and commissioned, this was immediately put into production to service a far sharper rise in volume on a major new program than had originally been predicted by the customer.
As part of an industry wide initiative Castalum has put significant work into mapping a journey to ‘Net Zero’ with a number of initiatives started that will help to establish our green credentials.
Principal risks and uncertainties
Price risk
The raw materials market has stabilised at a higher level in 2022 as both energy and scrap prices have yet to return to pre-pandemic levels. Both metal and energy increases have been handled by installing mechanisms to vary product price by index linking the raw materials. All customers have agreed the mechanism and similar agreements have been widely adopted throughout the industry.
Customers
We continue to get enquiries for more capacity from our existing customers but an increased presence on social media has seen enquiries from a more diverse range of industries. We have seen an increasing number of companies desiring to localise their supply base in UK, but have also seen renewed interest from EU and North America.
Key performance indicators
The following key performance indicators are used by the directors in measuring the performance of the business:
KPIs 2022 2021 Definition, Method of Calculation and Analysis
Sales - Volumes ('000s) 1,474 936 Total number of parts sold
Sales (£'000s) 29,763 13,538 Sales value in GBP (all markets)
Gross margin (%) 12 16 Ratio of gross profit to sales expressed as a %
Operating (loss)/profit (£'000s) 712 277 Profit before interest and tax
Future prospects
The ability developed at Castalum to tackle difficult to cast components is leading to a high number of enquiries. We are able to quote competitively and aim for projects that will dovetail with our capacity availability.
CASTALUM LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
- 2 -
Mr K F Meredith
Director
10 July 2023
CASTALUM LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 DECEMBER 2022
- 3 -
The directors present their annual report and financial statements for the year ended 31 December 2022.
Principal activities
The principal activity of the company continued to be that of aluminium diecasting and machining.
Results and dividends
The results for the year are set out on page 8.
No ordinary dividends were paid. The directors do not recommend payment of a final dividend.
Directors
The directors who held office during the year and up to the date of signature of the financial statements were as follows:
Mr P Ligertwood
Mr P Radcliffe
Mr M S Simpson
Mr P J Dodd
Mr K F Meredith
Mr M Jones
Mr S Westhorpe
Qualifying third party indemnity provisions
The company has made qualifying third party indemnity provisions for the benefit of its directors during the year. These provisions remain in force at the reporting date.
Auditor
The auditor, Dyke Yaxley Limited, is deemed to be reappointed under section 487(2) of the Companies Act 2006.
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.
Disclosure in the Strategic Report
The company has chosen in accordance with Companies Act 2006, s. 414C(11) to set out in the company's strategic report information required by Large and Medium-sized Companies and Groups (Accounts and Reports) Regulations 2008, Sch. 7 to be contained in the directors' report. It has done so in respect of review of business, principal risks and uncertainties and future developments.
On behalf of the board
Mr K F Meredith
Director
10 July 2023
CASTALUM LIMITED
DIRECTORS' RESPONSIBILITIES STATEMENT
FOR THE YEAR ENDED 31 DECEMBER 2022
- 4 -
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.
CASTALUM LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBER OF CASTALUM LIMITED
- 5 -
Opinion
We have audited the financial statements of Castalum Limited (the 'company') for the year ended 31 December 2022 which comprise the statement of comprehensive income, the balance sheet, the statement of changes in equity and notes to the financial statements, including significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice).
In our opinion the financial statements:
give a true and fair view of the state of the company's affairs as at 31 December 2022 and of its 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.
CASTALUM LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBER OF CASTALUM LIMITED
- 6 -
Matters on which we are required to report by exception
In the light of the knowledge and understanding of the company and its environment obtained in the course of the audit, we have not identified material misstatements in the strategic report or the directors' report.
We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to report to you if, in our opinion:
adequate accounting records have not been kept, or returns adequate for our audit have not been received from branches not visited by us; or
the financial statements are not in agreement with the accounting records and returns; or
certain disclosures of remuneration specified by law are not made; or
we have not received all the information and explanations we require for our audit.
Responsibilities of directors
As explained more fully in the directors' responsibilities statement, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. In preparing the financial statements, the directors are responsible for assessing the company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the company or to cease operations, or have no realistic alternative but to do so.
Auditor's responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.
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.
CASTALUM LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBER OF CASTALUM LIMITED
- 7 -
Irregularities, including fraud
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatement misstatements in respect of irregularities, including fraud.
The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below:
We gained an understanding of the legal and regulatory framework applicable to the company and the industry in which it operates, and considered the risk of acts by the company that were contrary to applicable laws and regulations, including fraud.
We designed audit procedures to respond to the risk, recognising that the risk of not detecting a material misstatement due to fraud is higher than the risk of not detecting one resulting from error, as fraud may involve deliberate concealment by, for example, forgery or intentional misrepresentations, or through collusion.
We focussed on laws and regulations which could give rise to a material misstatement in the financial statements, including, but not limited to, the Companies Act 2006 and UK tax legislation. Our tests included agreeing the financial statement disclosures to underlying supporting documentation and enquiries with management.
There are inherent limitations in the audit procedures described above and, the further removed non-compliance with laws and regulations is from the events and transactions reflected in the financial statements, the less likely we would become aware of it.
We did not identify any key audit matters relating to irregularities, including fraud.
Audit procedures performed by the engagement team included:
Identifying and assessing the design effectiveness of controls management has in place to prevent and detect fraud, particularly around journals processing;
Journal entry testing, with a focus on journals meeting our defined risk criteria based on our understanding of the business;
Completion of audit procedures to conclude on the compliance of disclosures in the annual report and accounts with applicable financial reporting requirements.
This report is made solely to the company's member 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 member those matters we are required to state to the member 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 member, for our audit work, for this report, or for the opinions we have formed.
Andrew Young FCA
Senior Statutory Auditor
For and on behalf of Dyke Yaxley Limited
18 July 2023
Chartered Accountants
Statutory Auditor
1 Brassey Road
Old Potts Way
Shrewsbury
Shropshire
SY3 7FA
CASTALUM LIMITED
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2022
- 8 -
2022
2021
Notes
£
£
Turnover
3
29,762,846
13,538,237
Cost of sales
(26,199,834)
(11,260,064)
Gross profit
3,563,012
2,278,173
Distribution costs
(1,164,874)
(499,150)
Administrative expenses
(1,713,219)
(1,725,046)
Other operating income
27,332
222,603
Operating profit
4
712,251
276,580
Interest payable and similar expenses
8
(205,092)
(57,617)
Profit before taxation
507,159
218,963
Tax on profit
9
(240,061)
101,799
Profit for the financial year
267,098
320,762
Other comprehensive income
Cash flow hedges (loss)/gain arising in the year
(862,932)
2,038,185
Cash flow hedges loss reclassified to profit or loss
(33,504)
(1,066,529)
Tax relating to other comprehensive income
203,905
68,398
Total comprehensive income for the year
(425,433)
1,360,816
The profit and loss account has been prepared on the basis that all operations are continuing operations.
CASTALUM LIMITED
BALANCE SHEET
AS AT
31 DECEMBER 2022
31 December 2022
- 9 -
2022
2021
Notes
£
£
£
£
Fixed assets
Tangible assets
10
7,988,731
8,548,233
Current assets
Stocks
12
2,352,897
3,172,132
Debtors
13
7,897,316
5,401,347
Cash at bank and in hand
1,004,073
252,722
11,254,286
8,826,201
Creditors: amounts falling due within one year
14
(12,914,397)
(8,855,706)
Net current liabilities
(1,660,111)
(29,505)
Total assets less current liabilities
6,328,620
8,518,728
Creditors: amounts falling due after more than one year
15
(3,214,823)
(5,015,654)
Provisions for liabilities
Deferred tax liability
18
554,114
517,958
(554,114)
(517,958)
Net assets
2,559,683
2,985,116
Capital and reserves
Called up share capital
21
100,000
100,000
Hedging reserve
22
(421,070)
271,461
Profit and loss reserves
22
2,880,753
2,613,655
Total equity
2,559,683
2,985,116
The financial statements were approved by the board of directors and authorised for issue on 10 July 2023 and are signed on its behalf by:
Mr K F Meredith
Director
Company Registration No. 06771963
CASTALUM LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2022
- 10 -
Share capital
Hedging reserve
Profit and loss reserves
Total
£
£
£
£
Balance at 1 January 2021
100,000
(768,593)
2,292,893
1,624,300
Year ended 31 December 2021:
Profit for the year
-
-
320,762
320,762
Other comprehensive income:
Cash flow hedges gains
-
2,038,185
-
2,038,185
Gains reclassified to profit or loss
-
(1,066,529)
-
(1,066,529)
Tax relating to other comprehensive income
-
68,398
68,398
Total comprehensive income for the year
-
1,040,054
320,762
1,360,816
Balance at 31 December 2021
100,000
271,461
2,613,655
2,985,116
Year ended 31 December 2022:
Profit for the year
-
-
267,098
267,098
Other comprehensive income:
Cash flow hedges gains
-
(862,932)
-
(862,932)
Gains reclassified to profit or loss
-
(33,504)
-
(33,504)
Tax relating to other comprehensive income
-
203,905
203,905
Total comprehensive income for the year
-
(692,531)
267,098
(425,433)
Balance at 31 December 2022
100,000
(421,070)
2,880,753
2,559,683
CASTALUM LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2022
- 11 -
1
Accounting policies
Company information
Castalum Limited is a private company limited by shares incorporated in England and Wales. The registered office is 5 Buttington Cross Enterprise Park, Buttington, Welshpool, Powys, SY21 8SL.
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 certain financial instruments at fair value. The principal accounting policies adopted are set out below.
This company is a qualifying entity for the purposes of FRS 102, being a member of a group where the parent of that group prepares publicly available consolidated financial statements, including this company, which are intended to give a true and fair view of the assets, liabilities, financial position and profit or loss of the group. The company has therefore taken advantage of exemptions from the following disclosure requirements:
Section 7 ‘Statement of Cash Flows’: Presentation of a statement of cash flow and related notes and disclosures;
Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instrument Issues: Interest income/expense and net gains/losses for financial instruments not measured at fair value; 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.
1.2
Going concern
Atruet the time of approving the financial statements, the directors have a reasonable expectation that the company has adequate resources to continue in operational existence for the foreseeable future. Thus the directors continue to adopt the going concern basis of accounting in preparing the financial statements.
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.
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:
Short-term Leasehold property
5 to 20 years
Plant and machinery
3 to 12 years
Office equipment
3 to 10 years
CASTALUM LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
1
Accounting policies
(Continued)
- 12 -
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.
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.
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 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
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.
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.
CASTALUM LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
1
Accounting policies
(Continued)
- 13 -
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.
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.
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.
CASTALUM LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
1
Accounting policies
(Continued)
- 14 -
1.10
Derivatives
Derivatives are initially recognised at fair value at the date a derivative contract is entered into and are subsequently remeasured to fair value at each reporting end date. The resulting gain or loss is recognised in profit or loss immediately unless the derivative is designated and effective as a hedging instrument, in which event the timing of the recognition in profit or loss depends on the nature of the hedge relationship.
A derivative with a positive fair value is recognised as a financial asset, whereas a derivative with a negative fair value is recognised as a financial liability.
Derivatives are initially recognised at fair value at the date a derivative contract is entered into and are subsequently remeasured to fair value at each reporting end date. The resulting gain or loss is recognised in profit or loss immediately unless the derivative is designated and effective as a hedging instrument, in which event the timing of the recognition in profit or loss depends on the nature of the hedge relationship.
A derivative with a positive fair value is recognised as a financial asset, whereas a derivative with a negative fair value is recognised as a financial liability.
1.11
Hedge accounting
The Company designates certain hedging instruments, including derivatives, embedded derivatives and non-derivatives, as either fair value hedges or cash flow hedges.
At the inception of the hedge relationship, the company documents the relationship between the hedging instrument and the hedged item along with risk management objectives and strategy for undertaking various hedge transactions. At the inception of the hedge and on an ongoing basis, the company documents whether the hedging instrument is highly effective in offsetting changes in fair values or cash flows of the hedged item.
Fair value hedges
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.
Cash flow hedges
The effective portion of changes in the fair value of derivatives that are designated and qualify as cash flow hedges is recognised in other comprehensive income.
The gain or loss relating to the ineffective portion is recognised immediately in profit or loss, and is included in the 'other gains and losses' line in this item.
Amounts previously recognised in other comprehensive income and accumulated in equity are reclassified to profit or loss in the periods when the hedged item is recognised in the profit or loss in the same line as of the income statement as the recognised hedged item. However when the forecast transaction that is hedged results in the recognition of a non-financial asset or liability, the gains and losses previously accumulated in equity are transferred from equity and included in the initial measurement of the cost of the asset or liability concerned.
For derivatives that are designated and qualify as cash flow hedges, the effective portion of changes in the fair value of the hedge is recognised in other comprehensive income. The gain or loss relating to the ineffective portion is recognised immediately in profit or loss.
Any gain or loss previously recognised in other comprehensive income is reclassified to profit or loss when the hedge relationship ends. This occurs when the hedging instrument expires or no longer meets the hedging criteria, the forecast transaction is no longer highly probable, the hedged debt instrument is derecognised, or the hedging instrument is terminated.
CASTALUM LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
1
Accounting policies
(Continued)
- 15 -
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.
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.
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.
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.
1.14
Retirement benefits
Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.
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 leases asset are consumed.
1.16
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.
CASTALUM LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
1
Accounting policies
(Continued)
- 16 -
1.17
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
An analysis of the company's turnover is as follows:
2022
2021
£
£
Turnover analysed by class of business
All turnover is derived from the principal activity undertaken
29,762,846
13,538,237
2022
2021
£
£
Turnover analysed by geographical market
United Kingdom
5,485,989
2,273,500
Rest of Europe
23,237,886
10,301,161
Rest of world
1,038,971
963,576
29,762,846
13,538,237
2022
2021
£
£
Other revenue
Grants received
27,332
213,472
CASTALUM LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
- 17 -
4
Operating profit
2022
2021
Operating profit for the year is stated after charging/(crediting):
£
£
Exchange (gains)/losses
(468,317)
139,449
Hedging item gains
(31,202)
(46,379)
Cash flow hedging gains reclassified to profit or loss
(9,131)
Government grants
(27,332)
(213,472)
Depreciation of owned tangible fixed assets
1,478,053
1,428,335
Depreciation of tangible fixed assets held under finance leases
9,618
(Profit)/loss on disposal of tangible fixed assets
62,188
Operating lease charges
346,500
5
Auditor's remuneration
2022
2021
Fees payable to the company's auditor and associates:
£
£
For audit services
Audit of the financial statements of the company
20,365
19,500
6
Employees
The average monthly number of persons (including directors) employed by the company during the year was:
2022
2021
Number
Number
Directors
6
8
Staff
126
109
Total
132
117
Their aggregate remuneration comprised:
2022
2021
£
£
Wages and salaries
4,680,719
3,958,818
Social security costs
493,324
398,310
Pension costs
179,586
162,039
5,353,629
4,519,167
CASTALUM LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
- 18 -
7
Directors' remuneration
2022
2021
£
£
Remuneration for qualifying services
569,000
631,130
Company pension contributions to defined contribution schemes
41,298
39,114
610,298
670,244
The number of directors for whom retirement benefits are accruing under defined contribution schemes amounted to 4 (2021 - 4).
Remuneration disclosed above include the following amounts paid to the highest paid director:
2022
2021
£
£
Remuneration for qualifying services
134,192
123,686
Company pension contributions to defined contribution schemes
13,419
12,369
8
Interest payable and similar expenses
2022
2021
£
£
Interest payable to group undertakings
205,092
46,711
Interest on finance leases and hire purchase contracts
10,831
Other interest
75
205,092
57,617
9
Taxation
2022
2021
£
£
Current tax
UK corporation tax on profits for the current period
(133,672)
Adjustments in respect of prior periods
(13)
Total current tax
(133,685)
Deferred tax
Origination and reversal of timing differences
240,061
31,886
Total tax charge/(credit)
240,061
(101,799)
CASTALUM LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
9
Taxation
(Continued)
- 19 -
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:
2022
2021
£
£
Profit before taxation
507,159
218,963
Expected tax charge based on the standard rate of corporation tax in the UK of 19.00% (2021: 19.00%)
96,360
41,603
Tax effect of expenses that are not deductible in determining taxable profit
3,511
11,816
Unutilised tax losses carried forward
10,899
483,976
Permanent capital allowances in excess of depreciation
(47,708)
(670,661)
Under/(over) provided in prior years
(13)
Deferred tax - origination and reversal of temporary differences
240,061
31,886
Movement in provisions
(406)
R&D additional deduction
(63,062)
Taxation charge/(credit) for the year
240,061
(101,799)
In addition to the amount charged/(credited) to the profit and loss account, the following amounts relating to tax have been recognised directly in other comprehensive income:
2022
2021
£
£
Reclassifications from equity to profit or loss:
Relating to cash flow hedges
(203,905)
(68,398)
CASTALUM LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
- 20 -
10
Tangible fixed assets
Short-term Leasehold property
Plant and machinery
Office equipment
Total
£
£
£
£
Cost
At 1 January 2022
1,080,603
25,156,077
215,967
26,452,647
Additions
16,824
880,504
21,223
918,551
At 31 December 2022
1,097,427
26,036,581
237,190
27,371,198
Depreciation and impairment
At 1 January 2022
464,701
17,243,081
196,632
17,904,414
Depreciation charged in the year
55,299
1,409,529
13,225
1,478,053
At 31 December 2022
520,000
18,652,610
209,857
19,382,467
Carrying amount
At 31 December 2022
577,427
7,383,971
27,333
7,988,731
At 31 December 2021
615,902
7,912,996
19,335
8,548,233
The net carrying value of tangible fixed assets includes the following in respect of assets held under finance leases or hire purchase contracts.
2022
2021
£
£
Plant and machinery
66,006
11
Financial instruments
2022
2021
£
£
Carrying amount of financial assets
Instruments measured at fair value through profit or loss
-
332,708
Carrying amount of financial liabilities
Measured at fair value through profit or loss
- Other financial liabilities
561,427
-
Financial assets measured at fair value through other comprehensive income comprise forward foreign currency contracts which are derivative financial instruments designed as hedges of variable exchange rate risk.
At the year end, the company had entered into agreements for the forward selling of Euros with a maximum contracted value of €28.8m (2021: €20.5m).
Hedging arrangements
The amount reclassified from equity to profit or loss in the year relating to cash flow hedges was £- (2021 - £9,131).
CASTALUM LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
- 21 -
12
Stocks
2022
2021
£
£
Raw materials and consumables
670,497
1,068,358
Work in progress
1,682,400
2,103,774
2,352,897
3,172,132
13
Debtors
2022
2021
Amounts falling due within one year:
£
£
Trade debtors
7,396,321
3,765,701
Corporation tax recoverable
133,672
133,672
Derivative financial instruments
-
332,708
Other debtors
194,869
1,005,685
Prepayments and accrued income
172,454
163,581
7,897,316
5,401,347
14
Creditors: amounts falling due within one year
2022
2021
Notes
£
£
Obligations under finance leases
17
22,033
Other borrowings
16
1,168,794
354,166
Trade creditors
4,366,735
2,290,922
Amounts owed to group undertakings
3,208,602
3,055,316
Taxation and social security
149,068
146,010
Derivative financial instruments
561,427
Government grants
19
27,332
27,332
Other creditors
2,788,706
2,704,839
Accruals and deferred income
643,733
255,088
12,914,397
8,855,706
Net obligations under finance leases and hire purchase contracts are secured against the assets to which the leases relate.
Securities held on debts to HSBC Bank which were subject to a fixed and floating charge over all assets of the company have been settled during the year.
HSBC Bank holds a group set-off between the company, Manx Welshpool Limited, Manx Welshpool Holdings Limited and AHW Industries Limited.
CASTALUM LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
- 22 -
15
Creditors: amounts falling due after more than one year
2022
2021
Notes
£
£
Other borrowings
16
3,108,291
4,881,790
Government grants
19
106,532
133,864
3,214,823
5,015,654
16
Loans and overdrafts
2022
2021
£
£
Loans from related parties
4,277,085
5,235,956
Payable within one year
1,168,794
354,166
Payable after one year
3,108,291
4,881,790
17
Finance lease obligations
2022
2021
Future minimum lease payments due under finance leases:
£
£
Within one year
22,033
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 is 5 years. All leases are on a fixed repayment basis and no arrangements have been entered into for contingent rental payments. Interest is calculated using the sum of digits method.
CASTALUM LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
- 23 -
18
Deferred taxation
Deferred tax assets and liabilities are offset where the company has a legally enforceable right to do so. The following is the analysis of the deferred tax balances (after offset) for financial reporting purposes:
Liabilities
Liabilities
2022
2021
Balances:
£
£
Accelerated capital allowances
1,336,041
938,385
Tax losses
(641,571)
(483,976)
Deferred tax on forward contracts
(140,356)
63,549
554,114
517,958
2022
Movements in the year:
£
Liability at 1 January 2022
517,958
Charge to profit or loss
240,061
Credit to other comprehensive income
(203,905)
Liability at 31 December 2022
554,114
The deferred tax liability set out above relates to accelerated capital allowances that are expected to mature within the same period.
19
Government grants
2022
2021
£
£
Arising from government grants
133,864
161,196
Included in the financial statements as follows:
Current liabilities
27,332
27,332
Non-current liabilities
106,532
133,864
133,864
161,196
Government grants received relate to plant & machinery purchased by the company. This is being amortised in accordance with the depreciation policy for plant & machinery.
CASTALUM LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
- 24 -
20
Retirement benefit schemes
2022
2021
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
179,586
162,039
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.
Contributions totalling £40,000 (2021: £33,073) were payable to the scheme at the year end and are included in creditors.
21
Share capital
2022
2021
2022
2021
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary shares of £1 each
100,000
100,000
100,000
100,000
The Ordinary Shares carry full rights in the Company with respect to voting, dividends and capital distributions.
22
Reserves
Cash flow hedge reserve
Includes movements in fair value on derivative instruments identified as designated and effective hedges. This is a non-distributive reserve impacting other comprehensive income. If hedge accounting had not been applied, a loss of £183K would have been recognised through the profit and loss based on 2023 exchange contracts.
Profit and loss reserves
Includes all current and prior period retained profits and losses.
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:
2022
2021
£
£
Within one year
6,689
2,937
Between two and five years
2,281
8,970
2,937
CASTALUM LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2022
- 25 -
24
Capital commitments
Amounts contracted for but not provided in the financial statements:
2022
2021
£
£
Acquisition of tangible fixed assets
-
369,176
25
Related party transactions
Transactions with related parties
The company has taken advantage of the exemption in section 33.1A of Financial Reporting Standard 102 from the requirement to disclose transactions with wholly owned members of the group.
The company has taken advantage of the exemption under Financial Reporting Standard 102 section 1.12 Reduced Disclosure For Subsidiaries from disclosing key management compensation in total.
At the year end the following amounts were outstanding to a director of the company:
Mr P Ligertwood £2,375,963 (2021: £2,264,944). There are no fixed repayment terms for this loan.
The company continued to hold loan agreements in the year with Manxfina, a company which the directors P Ligertwood and S Westhorpe are trustees of the controlling Trust. The loans are repayable over 5 years and interest is charged at 2.25% above base rate. The balance outstanding at the year end was £4,277,085 (2021: £5,235,965).
26
Ultimate controlling party
The ultimate parent company is Manx Welshpool Holdings Limited, a company incorporated in England & Wales.
The ultimate controlling party is P Ligertwood by virtue of his 100% holding of the issued share capital of Manx Welshpool Holdings Limited.
The parent undertaking of the largest and smallest group for which group accounts are prepared for the year ended 31 December 2022 is Manx Welshpool Holdings Limited. Copies of the group financial statements can be obtained from Companies House, Crown Way, Cardiff, Wales, CF14 3UZ.
2022-12-312022-01-01falseCCH SoftwareCCH Accounts Production 2023.100Mr P LigertwoodMr P RadcliffeMr M S SimpsonMr P J DoddMr K F MeredithMr M JonesMr S Westhorpe067719632022-01-012022-12-3106771963bus:Director12022-01-012022-12-3106771963bus:Director22022-01-012022-12-3106771963bus:Director32022-01-012022-12-3106771963bus:Director42022-01-012022-12-3106771963bus:Director52022-01-012022-12-3106771963bus:Director62022-01-012022-12-3106771963bus:Director72022-01-012022-12-3106771963bus:RegisteredOffice2022-01-012022-12-31067719632022-12-31067719632021-01-012021-12-3106771963core:RetainedEarningsAccumulatedLosses2021-01-012021-12-3106771963core:RetainedEarningsAccumulatedLosses2022-01-012022-12-3106771963core:HedgingReserve2022-01-012022-12-3106771963core:HedgingReserve2021-01-012021-12-3106771963core:RevenueReservesInvestmentFundsOnly2021-01-012021-12-31067719632021-12-3106771963core:LandBuildingscore:LeasedAssetsHeldAsLessee2022-12-3106771963core:PlantMachinery2022-12-3106771963core:FurnitureFittings2022-12-3106771963core:LandBuildingscore:LeasedAssetsHeldAsLessee2021-12-3106771963core:PlantMachinery2021-12-3106771963core:FurnitureFittings2021-12-3106771963core:CurrentFinancialInstrumentscore:WithinOneYear2022-12-3106771963core:CurrentFinancialInstrumentscore:WithinOneYear2021-12-3106771963core:Non-currentFinancialInstrumentscore:AfterOneYear2022-12-3106771963core:Non-currentFinancialInstrumentscore:AfterOneYear2021-12-3106771963core:CurrentFinancialInstruments2022-12-3106771963core:CurrentFinancialInstruments2021-12-3106771963core:Non-currentFinancialInstruments2022-12-3106771963core:Non-currentFinancialInstruments2021-12-3106771963core:ShareCapital2022-12-3106771963core:ShareCapital2021-12-3106771963core:HedgingReserve2022-12-3106771963core:HedgingReserve2021-12-3106771963core:RetainedEarningsAccumulatedLosses2022-12-3106771963core:RetainedEarningsAccumulatedLosses2021-12-3106771963core:ShareCapital2020-12-3106771963core:HedgingReservecore:RestatedAmount2020-12-3106771963core:RetainedEarningsAccumulatedLosses2020-12-3106771963core:LandBuildingscore:LongLeaseholdAssets2022-01-012022-12-3106771963core:PlantMachinery2022-01-012022-12-3106771963core:FurnitureFittings2022-01-012022-12-310677196312022-01-012022-12-310677196312021-01-012021-12-310677196322022-01-012022-12-310677196322021-01-012021-12-3106771963core:OwnedAssets2022-01-012022-12-3106771963core:OwnedAssets2021-01-012021-12-3106771963core:LeasedAssets2022-01-012022-12-3106771963core:LeasedAssets2021-01-012021-12-3106771963core:UKTax2022-01-012022-12-3106771963core:UKTax2021-01-012021-12-310677196332022-01-012022-12-310677196332021-01-012021-12-310677196342022-01-012022-12-310677196342021-01-012021-12-3106771963core:LandBuildingscore:LeasedAssetsHeldAsLessee2021-12-3106771963core:PlantMachinery2021-12-3106771963core:FurnitureFittings2021-12-31067719632021-12-3106771963core:LandBuildingscore:LeasedAssetsHeldAsLessee2022-01-012022-12-3106771963core:WithinOneYear2022-12-3106771963core:WithinOneYear2021-12-3106771963core:BetweenTwoFiveYears2022-12-3106771963core:BetweenTwoFiveYears2021-12-3106771963bus:PrivateLimitedCompanyLtd2022-01-012022-12-3106771963bus:FRS1022022-01-012022-12-3106771963bus:Audited2022-01-012022-12-3106771963bus:FullAccounts2022-01-012022-12-31xbrli:purexbrli:sharesiso4217:GBP