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REGISTERED NUMBER: 01957036 (England and Wales)















TONG ENGINEERING LIMITED

STRATEGIC REPORT,

REPORT OF THE DIRECTORS AND

FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 JANUARY 2022






TONG ENGINEERING LIMITED (REGISTERED NUMBER: 01957036)






CONTENTS OF THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 JANUARY 2022




Page

Company Information 1

Strategic Report 2

Report of the Directors 3 to 4

Report of the Independent Auditors 5 to 7

Income Statement 8

Other Comprehensive Income 9

Statement of Financial Position 10

Statement of Changes in Equity 11

Statement of Cash Flows 12

Notes to the Statement of Cash Flows 13

Notes to the Financial Statements 14 to 29


TONG ENGINEERING LIMITED

COMPANY INFORMATION
FOR THE YEAR ENDED 31 JANUARY 2022







DIRECTORS: E C Tong
C E Tong
Mrs T C Morgan
N Martin
C M Rich
S J Lee



SECRETARY: Mrs T C Morgan



REGISTERED OFFICE: Tong Engineering Limited
Vale Road
Spilsby
Lincolnshire
PE23 5HE



REGISTERED NUMBER: 01957036 (England and Wales)



AUDITORS: Duncan & Toplis Limited, Statutory Auditor
5 Resolution Close
Endeavour Park
Boston
Lincolnshire
PE21 7TT



SOLICITORS: Wilkin Chapman Epton Blades
Bank Street
Lincoln
LN2 1DR

TONG ENGINEERING LIMITED (REGISTERED NUMBER: 01957036)

STRATEGIC REPORT
FOR THE YEAR ENDED 31 JANUARY 2022

The directors present their strategic report for the year ended 31 January 2022.

REVIEW OF BUSINESS
Results for the year ended 31 January 2022 showed sales have increased compared to the prior year. Continued export development and the development of new product lines have successfully spread the company's risk.

The gross profit percentage has changed due to the sales mix. The directors continue to control and review the company's operating costs which are comparable as a percentage of turnover year on year. The company continues to conduct research and development activity.

The pension scheme liability is £79,000 (2021 - £497,000). The main reasons for the change in the deficit over the period can be summarised as follows:

1) The rise in bond yields over the period led to an increase in the discount rate of 0.75% pa. This reduced the value placed on the liabilities, although the impact was offset to some extent by the increase in inflation expectations. The overall impact of changes in market conditions is a reduction in the Scheme's liabilities of £302,000

2) Employer contributions of £134,000 during the period increased the asset value and hence reduced the deficits

Overall, the directors are satisfied with the company's performance in 2021-22 and believe that the company will consolidate its position during the subsequent financial year.

PRINCIPAL RISKS AND UNCERTAINTIES
The principal risks and uncertainties facing the company are largely the speed of recovery to pre-pandemic levels of economic activity, inflationary price rises affecting margins and the pension scheme deficit.
With regards to the pension deficit the directors continue to monitor the current situation, and where possible, increase company contributions into the scheme.

FINANCIAL KEY PERFORMANCE INDICATORS
Results for the year ended 31 January 2022 show an increase in sales to £21,061,730 (2021 - £19,295,772) with a change in gross profit margin to 20.49% (2021 - 22.85%).

The decrease in gross profit margin has resulted in the company reporting a profit before tax of £976,889 compared to £1,070,031 achieved in the prior year.

The results of the period have meant that shareholders' funds have increased from £6,254,558 to £7,250,943.

OTHER KEY PERFORMANCE INDICATORS
The directors closely monitor sales mix, supplier turnover, production output, staff attendance and working capital. These key performance indicators are within the targets set for the year.

ON BEHALF OF THE BOARD:





E C Tong - Director


8 August 2022

TONG ENGINEERING LIMITED (REGISTERED NUMBER: 01957036)

REPORT OF THE DIRECTORS
FOR THE YEAR ENDED 31 JANUARY 2022

The directors present their report with the financial statements of the company for the year ended 31 January 2022.

PRINCIPAL ACTIVITY
The principal activity of the company in the year under review was that of manufacture of agricultural machinery and recycling equipment.

DIVIDENDS
Dividends are voted prior to the year end date, with the value being dependent on year end results. The dividend agreed at the meeting is that 5% of profit before tax will be payable to those holding Ordinary A shares at the year end. No dividend was declared for those shareholders holding Ordinary shares.

RESEARCH AND DEVELOPMENT
The company continues to invest in research and development activity.

FUTURE DEVELOPMENTS
Tong Engineering Limited has a long history of manufacturing in the agriculture sector and continues to focus on this core activity as well as other product handling markets. In June 2019, the company began construction of a new manufacturing site. Phase 1 of the new site has completed, with the site now occupied and operational. Phase 2 was not complete at the balance sheet date, but has completed prior to the signing of this report.

DIRECTORS
The directors shown below have held office during the whole of the period from 1 February 2021 to the date of this report.

E C Tong
C E Tong
T Morgan
N Martin
S Lee - appointed 27 September 2021
C Rich - appointed 27 September 2021

FINANCIAL INSTRUMENTS
The company makes sales on credit, and manages the risks arising through its credit control procedures.

The company makes sales in foreign currencies. If the value of the sale is significant, forward exchange contracts for the value of the order are entered into when the order is placed. This eliminates the impact of the exchange risk on the pricing of sales.

STATEMENT OF DIRECTORS' RESPONSIBILITIES
The directors are responsible for preparing the Strategic Report, the Report of the Directors 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.

TONG ENGINEERING LIMITED (REGISTERED NUMBER: 01957036)

REPORT OF THE DIRECTORS
FOR THE YEAR ENDED 31 JANUARY 2022


STATEMENT AS TO DISCLOSURE OF INFORMATION TO AUDITORS
So far as the directors are aware, there is no relevant audit information (as defined by Section 418 of the Companies Act 2006) of which the company's auditors are unaware, and each director has taken all the steps that he or she ought to have taken as a director in order to make himself or herself aware of any relevant audit information and to establish that the company's auditors are aware of that information.

ON BEHALF OF THE BOARD:





E C Tong - Director


8 August 2022

REPORT OF THE INDEPENDENT AUDITORS TO THE MEMBERS OF
TONG ENGINEERING LIMITED

Opinion
We have audited the financial statements of Tong Engineering Limited (the 'company') for the year ended 31 January 2022 which comprise the Income Statement, Other Comprehensive Income, Statement of Financial Position, Statement of Changes in Equity, Statement of Cash Flows and Notes to the Statement of Cash Flows, Notes to the Financial Statements, including a summary of significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including 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 January 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.

Basis for opinion
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 Auditors' 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.

Other information
The directors are responsible for the other information. The other information comprises the information in the Strategic Report and the Report of the Directors, but does not include the financial statements and our Report of the Auditors thereon.

Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon.

In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether 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 the audit:
- the information given in the Strategic Report and the Report of the Directors for the financial year for which the financial statements are prepared is consistent with the financial statements; and
- the Strategic Report and the Report of the Directors have been prepared in accordance with applicable legal requirements.

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 Report of the Directors.

We have nothing to report in respect of the following matters where the Companies Act 2006 requires us to report to you if, in our opinion:
- adequate accounting records have not been kept, or returns adequate for our audit have not been received from branches not visited by us; or
- the financial statements are not in agreement with the accounting records and returns; or
- certain disclosures of directors' remuneration specified by law are not made; or
- we have not received all the information and explanations we require for our audit.

REPORT OF THE INDEPENDENT AUDITORS TO THE MEMBERS OF
TONG ENGINEERING LIMITED


Responsibilities of directors
As explained more fully in the Statement of Directors' Responsibilities set out on page three, 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 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.

Auditors' 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 a Report of the Auditors that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.

Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud is detailed blow:

We have identified areas of laws and regulations that could reasonably be expected to have a material effect on the financial statements from our general commercial experience, knowledge of the sector, a review of regulatory and legal correspondence and through discussions with Directors and other management obtained as part of the work required by auditing standards. We have also discussed with the Directors and other management the policies and procedures relating to compliance with laws and regulations. We communicated laws and regulations throughout the team and remained alert to any indications of non-compliance throughout the audit.

The potential impact of different laws and regulations varies considerably. The company is subject to laws and regulations that directly impact the financial statements (for example financial reporting legislation) and we have assessed the extent of compliance with such laws as part of our financial statement audit. We have evaluated management's incentives and opportunities for fraudulent manipulation of the financial statements (including risk of override of controls) and determined that the principal risks were related to management bias in accounting estimates and judgemental areas of the financial statements such as work in progress and the defined benefit pension scheme. Also considered were the risk of inappropriate journal entries to increase reported profitability. Auditing procedures performed by the engagement team included the identification and testing of material and unusual journal entries and challenging management on key accounting estimates, assumptions and judgements made in the preparation of the financial statements. We carried out detailed substantive testing on accounting estimates, including reviewing the method used by management to make those estimates and re-performing the calculation.

Additionally, the company is subject ot laws and regulations in the industry in which they operate, including health and safety and employment law requirements. These are areas where the consequences for non-compliance could have a material effect on the amounts or disclosures in the financial statements.

Auditing standards limit the required audit procedures to identify non-compliance with these laws and regulations to enquiry of the Directors and other management and inspection. This inspection included a review of legal fees for any evidence of non-compliance, discussions around whether any incidents occurred in the year and a review of the health and safety policies in place. Through these procedures, if we became aware of any non-compliance, we considered the impact on the procedures performed on the related financial statement items.

Owing to the inherent limitations of an audit, there is an unavoidable risk that we may not have detected some material misstatements in the financial statements, even though we have properly planned and performed our audit in accordance with auditing standards. The further removed non-compliance with laws and regulations is from the events and transactions reflected in the financial statements, the less likely the inherently limited procedures required by auditing standards would identify it. As with any audit, there is a greater risk of non-detection of irregularities as these may involve collusion, intentional omissions or the override of internal controls.

We are not responsible for preventing non-compliance and cannot be expected to detect non-compliance with all laws and regulations.

A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council's website at www.frc.org.uk/auditorsresponsibilities. This description forms part of our Report of the Auditors.

REPORT OF THE INDEPENDENT AUDITORS TO THE MEMBERS OF
TONG ENGINEERING LIMITED


Use of our 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 a Report of the Auditors 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.




Adrian Reynolds BA FCA (Senior Statutory Auditor)
for and on behalf of Duncan & Toplis Limited, Statutory Auditor
5 Resolution Close
Endeavour Park
Boston
Lincolnshire
PE21 7TT

8 August 2022

TONG ENGINEERING LIMITED (REGISTERED NUMBER: 01957036)

INCOME STATEMENT
FOR THE YEAR ENDED 31 JANUARY 2022

2022 2021
Notes £    £    £    £   

TURNOVER 3 21,061,730 19,295,772

Cost of sales 16,746,297 14,886,356
GROSS PROFIT 4,315,433 4,409,416

Distribution costs 271,439 288,448
Administrative expenses 3,158,823 3,078,606
3,430,262 3,367,054
885,171 1,042,362

Other operating income 172,597 163,113
OPERATING PROFIT 5 1,057,768 1,205,475

Interest receivable and similar income 168 5,999
1,057,936 1,211,474

Interest payable and similar expenses 6 75,047 101,443
Other finance costs 22 6,000 40,000
81,047 141,443
PROFIT BEFORE TAXATION 976,889 1,070,031

Tax on profit 7 146,980 225,159
PROFIT FOR THE FINANCIAL YEAR 829,909 844,872

TONG ENGINEERING LIMITED (REGISTERED NUMBER: 01957036)

OTHER COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 JANUARY 2022

2022 2021
Notes £    £   

PROFIT FOR THE YEAR 829,909 844,872


OTHER COMPREHENSIVE INCOME
Actuarial (loss)/gain on pension scheme 290,000 (184,000 )
Income tax relating to other comprehensive
income

(74,680

)

17,100
OTHER COMPREHENSIVE INCOME FOR THE YEAR,
NET OF INCOME TAX

215,320

(166,900

)
TOTAL COMPREHENSIVE INCOME FOR THE YEAR 1,045,229 677,972

TONG ENGINEERING LIMITED (REGISTERED NUMBER: 01957036)

STATEMENT OF FINANCIAL POSITION
31 JANUARY 2022

2022 2021
Notes £    £    £    £   
FIXED ASSETS
Tangible assets 9 6,783,567 4,298,944
Investments 10 24,660 24,660
6,808,227 4,323,604

CURRENT ASSETS
Stocks 11 3,325,714 3,097,027
Debtors 12 2,996,018 1,707,394
Cash at bank and in hand 659,259 2,779,449
6,980,991 7,583,870
CREDITORS
Amounts falling due within one year 13 4,130,076 2,979,539
NET CURRENT ASSETS 2,850,915 4,604,331
TOTAL ASSETS LESS CURRENT LIABILITIES 9,659,142 8,927,935

CREDITORS
Amounts falling due after more than one year 14 (1,790,594 ) (1,993,042 )

PROVISIONS FOR LIABILITIES 19 (538,605 ) (183,335 )

PENSION LIABILITY 22 (79,000 ) (497,000 )
NET ASSETS 7,250,943 6,254,558

CAPITAL AND RESERVES
Called up share capital 20 157,500 157,500
Capital redemption reserve 21 145,000 145,000
Retained earnings 21 6,948,443 5,952,058
SHAREHOLDERS' FUNDS 7,250,943 6,254,558

The financial statements were approved by the Board of Directors and authorised for issue on 8 August 2022 and were signed on its behalf by:





C E Tong - Director


TONG ENGINEERING LIMITED (REGISTERED NUMBER: 01957036)

STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 JANUARY 2022

Called up Capital
share Retained Revaluation redemption Total
capital earnings reserve reserve equity
£    £    £    £    £   

Balance at 1 February 2020 157,500 4,922,325 405,263 145,000 5,630,088

Changes in equity
Dividends - (53,502 ) - - (53,502 )
Total comprehensive income - 1,083,235 (405,263 ) - 677,972
Balance at 31 January 2021 157,500 5,952,058 - 145,000 6,254,558

Changes in equity
Dividends - (48,844 ) - - (48,844 )
Total comprehensive income - 1,045,229 - - 1,045,229
Balance at 31 January 2022 157,500 6,948,443 - 145,000 7,250,943

TONG ENGINEERING LIMITED (REGISTERED NUMBER: 01957036)

STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 JANUARY 2022

2022 2021
Notes £    £   
Cash flows from operating activities
Cash generated from operations 1 1,038,502 1,284,289
Interest paid (55,098 ) (77,921 )
Interest element of hire purchase payments paid (19,949 ) (23,522 )
Pension contribution (134,000 ) (134,000 )
Tax paid (62,141 ) (101,606 )
Taxation refund 66,546 -
Net cash from operating activities 833,860 947,240

Cash flows from investing activities
Purchase of tangible fixed assets (2,696,513 ) (1,116,209 )
Sale of tangible fixed assets 55,417 983,732
Interest received 168 5,999
Net cash from investing activities (2,640,928 ) (126,478 )

Cash flows from financing activities
New loans in year - 1,400,000
Loan repayments in year (80,482 ) (1,059,207 )
Capital repayments in year (179,138 ) (161,281 )
Equity dividends paid (53,502 ) (45,496 )
Net cash from financing activities (313,122 ) 134,016

(Decrease)/increase in cash and cash equivalents (2,120,190 ) 954,778
Cash and cash equivalents at beginning of year 2 2,779,449 1,824,671

Cash and cash equivalents at end of year 2 659,259 2,779,449

TONG ENGINEERING LIMITED (REGISTERED NUMBER: 01957036)

NOTES TO THE STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 JANUARY 2022

1. RECONCILIATION OF PROFIT BEFORE TAXATION TO CASH GENERATED FROM OPERATIONS
2022 2021
£    £   
Profit before taxation 976,889 1,070,031
Depreciation charges 367,756 368,355
(Profit)/loss on disposal of fixed assets (55,417 ) 75,151
Finance costs 81,047 141,443
Finance income (168 ) (5,999 )
1,370,107 1,648,981
(Increase)/decrease in stocks (228,687 ) 199,506
(Increase)/decrease in trade and other debtors (1,221,560 ) 314,944
Increase/(decrease) in trade and other creditors 1,118,642 (879,142 )
Cash generated from operations 1,038,502 1,284,289

2. CASH AND CASH EQUIVALENTS

The amounts disclosed on the Statement of Cash Flows in respect of cash and cash equivalents are in respect of these Statement of Financial Position amounts:

Year ended 31 January 2022
31.1.22 1.2.21
£    £   
Cash and cash equivalents 659,259 2,779,449
Year ended 31 January 2021
31.1.21 1.2.20
£    £   
Cash and cash equivalents 2,779,449 1,824,671


3. ANALYSIS OF CHANGES IN NET FUNDS/(DEBT)

Other
non-cash
At 1.2.21 Cash flow changes At 31.1.22
£    £    £    £   
Net cash
Cash at bank
and in hand 2,779,449 (2,120,190 ) 659,259
2,779,449 (2,120,190 ) 659,259
Debt
Finance leases (533,007 ) 179,138 (155,866 ) (509,735 )
Debts falling due
within 1 year (80,592 ) (1,620 ) - (82,212 )
Debts falling due
after 1 year (1,323,505 ) 82,102 - (1,241,403 )
(1,937,104 ) 259,620 (155,866 ) (1,833,350 )
Total 842,345 (1,860,570 ) (155,866 ) (1,174,091 )

4. RECONCILING ADJUSTMENTS

The purchase of tangible fixed assets has been calculated by taking the cash outflow, excluding hire purchase finance. Prepaid expenditure on tangible fixed assets that are yet to be capitalised is also recognised within this total.

TONG ENGINEERING LIMITED (REGISTERED NUMBER: 01957036)

NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 JANUARY 2022

1. STATUTORY INFORMATION

Tong Engineering Limited is a private company, limited by shares , registered in England and Wales. The company's registered number and registered office address can be found on the Company Information page.

The presentation currency of the financial statements is the Pound Sterling (£).


2. ACCOUNTING POLICIES

Basis of preparing the financial statements
The financial statements have been prepared under the historical cost convention and in accordance with Financial Reporting Standard 102 (FRS 102), the Financial Reporting Standard applicable in the United Kingdom and the Republic of Ireland and the Companies Act 2006.

The company's accounting reference date is 31 January. These financial statements are for the period 1 February 2021 to 30 January 2022. The comparative figures are for the period 27 January 2020 to 31 January 2021.

Preparation of consolidated financial statements
The financial statements contain information about Tong Engineering Limited as an individual company and do not contain consolidated financial information as the parent of a group. The company is exempt under Section 402 of the Companies Act 2006 from the requirement to prepare consolidated financial statements.

Significant judgements and estimates
In the application of the Company's accounting policies, management is required to make judgements, estimates and assumptions about the carrying value of assets and liabilities that are not readily apparent from other sources. The estimates and underlying assumptions are based on historical experiences 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 estimates is revised if the revision affects only that period, or in the period of the revision and future periods if the revision affects both current and future periods.

The key sources of estimation uncertainty that have a significant effect on the amounts recognised in the financial statements are described below.

(i) Work in progress assumptions

The estimations and assumptions used to assess that work in progress under contract is valued in line with applicable accounting frameworks are the contracted sales price (exclusive of VAT) and the stage of completion. The stage of completion is estimated by senior management using standardised methodology and is regularly reviewed.

(ii) Defined benefit pension scheme assumptions

The estimations and assumptions supplied by the actuary when preparing the actuarial report for the defined benefit pension scheme operated by the client are in line with market conditions at the time of the report. The actuary is an experienced and qualified actuarial institution, and subject to the standards and regulations of the relevant governing body.

Turnover
Turnover is measured at the fair value of the consideration received or receivable, excluding discounts, rebates, value added tax and other sales taxes.

TONG ENGINEERING LIMITED (REGISTERED NUMBER: 01957036)

NOTES TO THE FINANCIAL STATEMENTS - continued
FOR THE YEAR ENDED 31 JANUARY 2022

2. ACCOUNTING POLICIES - continued

Tangible fixed assets
Fixed assets are stated at cost or valuation less accumulated depreciation.

Depreciation is provided at the following annual rates in order to write off each asset over its estimated useful
life.

Land & freehold property (land)-Not provided for on land
Land & freehold property (buildings)-2% straight line
Asset under the course of construction-Not provided
Plant and machinery-10% straight line
Office Equipment-10 - 20% straight line and 33% straight line
Motor vehicles-25 -33% straight line

The assets' residual values, useful lives and depreciation methods are reviewed, and adjusted prospectively if appropriate, or if there is an indication of a significant change since the last reporting date.

Up to and including 2012, it was the company's policy to revalue land and freehold properties. The last revaluation was in 2012. These revaluations have been adopted as deemed cost on transition to FRS102. During the year ended 31 January 2021, the revalued land and buildings were disposed of.

Government grants
Government grants are recognised at the fair value of the asset received or receivable when there is reasonable assurance that the company will comply with conditions attaching to them and the grants will be received using the accruals model.

The government grants received relate to support in respect of capital investment.

Investments in subsidiaries and associates
Investments in subsidiary and associate undertakings are recognised at cost.

Stocks
Raw material and work in progress stocks are stated at the lower of cost and the estimated selling price less costs to complete and sell. Cost is based on the cost of purchase on a first in, first out basis. Work in progress includes labour and attributable overheads.

Finished machines are valued at the lower of cost and the estimated selling price less costs to complete and sell after making due allowance for obsolete and slow moving stocks. Cost is determined by reference to the sales price less the margin. For part complete machines, the stage of completion of the machine is estimated and multiplied by the cost to determine the stock value.

At each financial reporting date, stocks are assessed for impairment. If stock is impaired, the carrying amount is reduced to its selling price less costs to complete and sell. The impairment loss is recognised immediately in profit and loss.

TONG ENGINEERING LIMITED (REGISTERED NUMBER: 01957036)

NOTES TO THE FINANCIAL STATEMENTS - continued
FOR THE YEAR ENDED 31 JANUARY 2022

2. ACCOUNTING POLICIES - continued

Financial instruments
The company only enters into basic financial instrument transactions that result in the recognition of financial assets and liabilities like trade and other accounts receivable and payable, loans from banks, other third parties and related parties.

Financial assets that are measured at cost and amortised cost are assessed at the end of each reporting period for objective evidence of impairment. If objective evidence of impairment is found, an impairment loss is recognised in the income statement.

For financial assets measured at amortised cost, the impairment loss is measured as the difference between an asset's carrying amount and the present value of estimated cash flows discounted at the asset's original effective interest rate.If a financial asset has a variable interest rate, the discount rate for measuring any impairment loss is the current effective interest rate determined under the contract.

For financial assets measured at cost less impairment, the impairment loss is measured as the difference between an asset's carrying amount and best estimate, which is an approximation of the amount that the Company would receive for the asset if it were to be sold at the financial reporting date.

Financial assets and liabilities are offset and the net amount reported in the statement of financial position when there is as 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.

The company does not generally apply hedge accounting in respect of forward foreign exchange contracts held to manage the cash flow exposure of forecast transactions denominated in foreign currencies.

Taxation
Taxation for the year comprises current and deferred tax. Tax is recognised in the Income Statement, except to the extent that it relates to items recognised in other comprehensive income or directly in equity.

Current or deferred taxation assets and liabilities are not discounted.

Current tax is recognised at the amount of tax payable using the tax rates and laws that have been enacted or substantively enacted by the statement of financial position date.

Deferred tax
Deferred tax is recognised in respect of all timing differences that have originated but not reversed at the financial reporting date.

Timing differences arise from the inclusion of income and expenses in tax assessments in periods different from those in which they are recognised in financial statements. Deferred tax is measured using tax rates and laws that have been enacted or substantively enacted by the year end and that are expected to apply to the reversal of the timing difference.

Unrelieved tax losses and other deferred tax assets are recognised only to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits.

Research and development
Expenditure on research and development is written off in the year in which it is incurred.


TONG ENGINEERING LIMITED (REGISTERED NUMBER: 01957036)

NOTES TO THE FINANCIAL STATEMENTS - continued
FOR THE YEAR ENDED 31 JANUARY 2022

2. ACCOUNTING POLICIES - continued

Foreign currency translation
The company's functional and presentational currency is the Pound Sterling (£).

Transactions and balances
Foreign currency transactions are translated into the functional currency using the spot exchange rates at the dates of the transactions.

At each period end foreign currency monetary items are translated using the closing rate. Non-monetary items measured at historical cost are translated using the exchange rate at the date of the transaction and non-monetary items measured at fair value are measured using the exchange rate when the fair value was determined.

Foreign exchange gains and losses resulting from the settlement of transactions and from the translation at period-end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in the income statement.

Foreign exchange gains and losses that relate to borrowings of cash and cash equivalents are presented in the income statement within 'financial income or costs'. All other foreign exchange gains and losses are presented in the income statement within administrative expenses.

Hire purchase and leasing commitments
Assets obtained under hire purchase contracts or finance leases are capitalised in the statement of financial position. Those held under hire purchase contracts are depreciated over their estimated useful lives. Those held under finance leases are depreciated over their estimated useful lives or the lease term, whichever is the shorter.

The interest element of these obligations is charged to the income statement over the relevant period. The capital element of the future payments is treated as a liability.

Rentals paid under operating leases are charged to the income statement on a straight line basis over the period of the lease.

TONG ENGINEERING LIMITED (REGISTERED NUMBER: 01957036)

NOTES TO THE FINANCIAL STATEMENTS - continued
FOR THE YEAR ENDED 31 JANUARY 2022

2. ACCOUNTING POLICIES - continued

Pensions
Defined contribution pension plan
The Company operates a defined contribution plan for its employees. A defined contribution plan is a pension plan under which the Company pays fixed contributions into a separate entity. Once the contributions have been paid the Company has no further payments obligations.

The contributions are recognised as an expenses in the income statement when they fall due. Amounts not paid are shown in accruals as a liability in the statement of financial position. The assets of the plan are held separately from the Company in independently administered funds.

Defined benefit pension plan
The Company operates a defined benefit plan. A defined benefit plan defines the pension benefit that the employee will receive on retirement, usually dependent upon several factors including but not limited to age, length of service and remuneration. A defined benefit plan is a pension plan that is not a defined contribution plan.

The liability recognised in the statement of financial position in respect of the defined benefit plan us the present value of the defined benefit obligation at the financial reporting date less the fair value of plan assets at the financial reporting date (if any) out of which the obligations are to be settled.

The defined benefit obligation is calculated using the projected unit credit method. Annually the company engages independent actuaries to calculate the obligation. The present value is determined by discounting the estimated future payments using market yields on high quality corporate bonds that are denominated in sterling and that have terms approximating to the estimated period of the future payments ('discount rate').

The fair value of plan assets is measured in accordance with the FRS 102 fair value hierarchy and in accordance with the Company's policy for similarly held assets. This includes the use of appropriate valuation techniques.

Actuarial gains and losses arising from experience adjustments and changes in actuarial assumptions are charged or credited to other comprehensive income. These amounts together with the return on plan assets, less amounts included in net interest, are disclosed as 'Remeasurement of net defined benefit liability'.

The cost of the defined benefit plan, recognised in the income statement as employee costs, except where included in the cost of an asset, comprises:
a) the increase in net pension benefit liability arising from employee service during the period; and
b) the cost of plan introductions, benefit changes, curtailments and settlements.

The net interest cost is calculated by applying the discount rate to the net balance of the defines benefit obligation and the fair value of plan assets. This cost is recognised in profit or loss as a 'finance expense'.

3. TURNOVER

The turnover and profit before taxation are attributable to the one principal activity of the company.

An analysis of turnover by geographical market is given below:

2022 2021
£    £   
United Kingdom 13,369,990 10,588,895
Europe 4,081,350 3,852,654
Rest of the World 3,610,390 4,854,223
21,061,730 19,295,772

TONG ENGINEERING LIMITED (REGISTERED NUMBER: 01957036)

NOTES TO THE FINANCIAL STATEMENTS - continued
FOR THE YEAR ENDED 31 JANUARY 2022

4. EMPLOYEES AND DIRECTORS
2022 2021
£    £   
Wages and salaries 5,701,650 5,841,403
Social security costs 541,006 534,825
Other pension costs 259,093 215,622
6,501,749 6,591,850

The average number of employees during the year was as follows:
2022 2021

Production 155 157
Sales and distribution 7 7
Administration 12 15
174 179

2022 2021
£    £   
Directors' remuneration 442,818 396,482
Directors' pension contributions to money purchase schemes 40,987 27,119

The number of directors to whom retirement benefits were accruing was as follows:

Money purchase schemes 5 3

Information regarding the highest paid director is as follows:
2022 2021
£    £   
Emoluments etc 134,477 142,903
Pension contributions to money purchase schemes 21,208 14,244

5. OPERATING PROFIT

The operating profit is stated after charging/(crediting):

2022 2021
£    £   
Hire of plant and machinery 15,762 19,923
Depreciation - owned assets 300,606 187,422
Depreciation - assets on hire purchase contracts 67,150 180,933
(Profit)/loss on disposal of fixed assets (55,417 ) 75,151
Auditors' remuneration 16,000 12,450
Foreign exchange differences (119,230 ) (199,567 )

6. INTEREST PAYABLE AND SIMILAR EXPENSES
2022 2021
£    £   
Bank interest 24,197 51,488
Bank loan interest 30,901 26,433
Hire purchase interest 19,949 23,522
75,047 101,443

TONG ENGINEERING LIMITED (REGISTERED NUMBER: 01957036)

NOTES TO THE FINANCIAL STATEMENTS - continued
FOR THE YEAR ENDED 31 JANUARY 2022

7. TAXATION

Analysis of the tax charge
The tax charge on the profit for the year was as follows:
2022 2021
£    £   
Current tax:
UK corporation tax (67,064 ) 62,141
Adjustment re previous years (66,546 ) -
Total current tax (133,610 ) 62,141

Deferred tax 280,590 163,018
Tax on profit 146,980 225,159

Reconciliation of total tax charge included in profit and loss
The tax assessed for the year is lower than the standard rate of corporation tax in the UK. The difference is explained below:

2022 2021
£    £   
Profit before tax 976,889 1,070,031
Profit multiplied by the standard rate of corporation tax in the UK of 25% (2021 -
19%)

244,222

203,306

Effects of:
Expenses not deductible for tax purposes (23,300 ) 25,450
Income not taxable for tax purposes (25,000 ) (19,000 )
Adjustments to tax charge in respect of previous periods (66,546 ) 66,545
Deduction for qualifying research and development expenditure (91,289 ) (51,142 )
Change of rate 108,893 -
Total tax charge 146,980 225,159

Tax effects relating to effects of other comprehensive income

2022
Gross Tax Net
£    £    £   
Actuarial (loss)/gain on pension scheme 290,000 (74,680 ) 215,320

2021
Gross Tax Net
£    £    £   
Actuarial (loss)/gain on pension scheme (184,000 ) 17,100 (166,900 )

8. DIVIDENDS
2022 2021
£    £   
Ordinary shares of £1 each
Final 48,844 53,502

TONG ENGINEERING LIMITED (REGISTERED NUMBER: 01957036)

NOTES TO THE FINANCIAL STATEMENTS - continued
FOR THE YEAR ENDED 31 JANUARY 2022

9. TANGIBLE FIXED ASSETS
Land &
freehold Plant and Office Motor
property machinery equipment vehicles Totals
£    £    £    £    £   
COST
At 1 February 2021 3,015,672 2,531,432 904,757 528,492 6,980,353
Additions 2,473,824 205,414 92,553 80,588 2,852,379
Disposals - - (1,254 ) (94,222 ) (95,476 )
At 31 January 2022 5,489,496 2,736,846 996,056 514,858 9,737,256
DEPRECIATION
At 1 February 2021 23,035 1,570,993 787,030 300,351 2,681,409
Charge for year 53,388 144,535 47,730 122,103 367,756
Eliminated on disposal - - (1,254 ) (94,222 ) (95,476 )
At 31 January 2022 76,423 1,715,528 833,506 328,232 2,953,689
NET BOOK VALUE
At 31 January 2022 5,413,073 1,021,318 162,550 186,626 6,783,567
At 31 January 2021 2,992,637 960,439 117,727 228,141 4,298,944

Included in cost of land and buildings is freehold land of £ 346,284 (2021 - £ 346,284 ) which is not depreciated.

Included in cost of land and freehold property is £2,473,824 (2021 - Nil) which relates to assets in the course of construction, which are not depreciated.

The net book value of tangible fixed assets includes £773,560 (2021 - £738,286) in respect of assets held under hire purchase contracts.

10. FIXED ASSET INVESTMENTS
Shares in Interest
group in
undertakings associate Totals
£    £    £   
COST
At 1 February 2021
and 31 January 2022 24,560 100 24,660
NET BOOK VALUE
At 31 January 2022 24,560 100 24,660
At 31 January 2021 24,560 100 24,660

The company's investments at the Statement of Financial Position date in the share capital of companies include the following:

Subsidiary

Name of subsidiary % Held Principle activity
Peal Engineering Limited 100 Dormant
E.J. Tong & Sons (Engineering) Ltd 100 Dormant

All of the above are companies registered in England and Wales and the shares held are £1 Ordinary shares.

All of the above companies have the same registered office as the parent company, being Tong Engineering Limited, Vale Road, Spilsby, Lincolnshire, PE23 5HE.

TONG ENGINEERING LIMITED (REGISTERED NUMBER: 01957036)

NOTES TO THE FINANCIAL STATEMENTS - continued
FOR THE YEAR ENDED 31 JANUARY 2022

10. FIXED ASSET INVESTMENTS - continued

Associated company

Vegtech Machinery Ltd
Registered office: Tong Engineering Limited, Vale Road, Spilsby, Lincolnshire, PE23 5HE
Nature of business: Manufacture of agricultural machinery.
%
Class of shares: holding
C Ordinary shares 100.00
30.9.21 30.9.20
£    £   
Aggregate capital and reserves 3,229 1,760
Profit for the year 1,469 1,460

11. STOCKS
2022 2021
£    £   
Raw materials 1,808,208 1,614,799
Work-in-progress 911,633 904,214
Finished goods 605,873 578,014
3,325,714 3,097,027

12. DEBTORS: AMOUNTS FALLING DUE WITHIN ONE YEAR
2022 2021
£    £   
Trade debtors 2,663,580 1,412,849
Amounts owed by group undertakings 30,862 28,651
Other debtors 2,645 6,845
Tax 67,064 -
VAT - 75,686
Prepayments and accrued income 231,867 183,363
2,996,018 1,707,394

13. CREDITORS: AMOUNTS FALLING DUE WITHIN ONE YEAR
2022 2021
£    £   
Bank loans and overdrafts (see note 15) 82,212 80,592
Hire purchase contracts (see note 16) 160,544 163,470
Trade creditors 1,546,812 934,422
Amounts owed to group undertakings 25,000 25,000
Taxation - 62,141
Other taxes and social security 125,024 123,929
VAT 21,655 -
Other creditors 1,444,933 804,376
Directors' current accounts 48,844 53,502
Accruals and deferred income 575,052 632,107
Deferred government grants 100,000 100,000
4,130,076 2,979,539

TONG ENGINEERING LIMITED (REGISTERED NUMBER: 01957036)

NOTES TO THE FINANCIAL STATEMENTS - continued
FOR THE YEAR ENDED 31 JANUARY 2022

14. CREDITORS: AMOUNTS FALLING DUE AFTER MORE THAN ONE YEAR
2022 2021
£    £   
Bank loans (see note 15) 1,241,403 1,323,505
Hire purchase contracts (see note 16) 349,191 369,537
Deferred government grants 200,000 300,000
1,790,594 1,993,042

15. LOANS

An analysis of the maturity of loans is given below:

2022 2021
£    £   
Amounts falling due within one year or on demand:
Bank loans 82,212 80,592

Amounts falling due between one and two years:
Bank loans 84,039 82,212

Amounts falling due between two and five years:
Bank loans 1,157,364 1,241,293

16. LEASING AGREEMENTS

Minimum lease payments fall due as follows:

Hire purchase contracts
2022 2021
£    £   
Net obligations repayable:
Within one year 160,544 163,470
Between one and five years 349,191 369,537
509,735 533,007

The hire purchase contracts relate to a number of fixed assets. The remaining lease terms range from three months to five years. At the end of the lease, title of the assets passes to the company for a nominal fee.

Non-cancellable operating leases
2022 2021
£    £   
Within one year 32,739 23,969
Between one and five years 1,006 23,235
33,745 47,204

Lease payments recognised as an expense during the year amount to £98,330 (2021 - £26,549).

TONG ENGINEERING LIMITED (REGISTERED NUMBER: 01957036)

NOTES TO THE FINANCIAL STATEMENTS - continued
FOR THE YEAR ENDED 31 JANUARY 2022

17. SECURED DEBTS

The following secured debts are included within creditors:

2022 2021
£    £   
Bank loans 1,323,615 1,404,097
Hire purchase contracts 509,735 533,007
1,833,350 1,937,104

Hire purchase creditors are secured on the assets concerned.

The bank has a fixed and floating charge over all assets of the company and a legal mortgage over the land and property.

18. FINANCIAL INSTRUMENTS

The company has the following financial instruments:

2022 2021
£ £
Financial assets that are debt instruments measured at amortised cost
Cash at bank and in hand 659,259 2,779,449
Trade debtors 2,663,580 1,412,849

Financial liabilities measured at amortised cost
Hire purchase 509,735 533,007
Trade creditors 1,546,812 934,422
Bank loan 1,323,615 1,404,097

There is no interest income or expense for financial assets and liabilities that are not measured at fair value through profit or loss.

19. PROVISIONS FOR LIABILITIES
2022 2021
£    £   
Deferred tax
Accelerated capital allowances 577,451 290,747
Defined benefit pension scheme timing
differences

(19,750

)

(94,430

)
Other timing differences (19,096 ) (12,982 )
538,605 183,335

Deferred
tax
£   
Balance at 1 February 2021 183,335
Provided during year 280,590
Movement on pension scheme 74,680
Balance at 31 January 2022 538,605

TONG ENGINEERING LIMITED (REGISTERED NUMBER: 01957036)

NOTES TO THE FINANCIAL STATEMENTS - continued
FOR THE YEAR ENDED 31 JANUARY 2022

20. CALLED UP SHARE CAPITAL



Allotted, issued and fully paid:
Number: Class: Nominal 2022 2021
value: £    £   
107,500 Ordinary £1 107,500 107,500
50,000 Ordinary A £1 50,000 50,000
157,500 157,500

21. RESERVES
Capital
Retained redemption
earnings reserve Totals
£    £    £   

At 1 February 2021 5,952,058 145,000 6,097,058
Profit for the year 829,909 - 829,909
Dividends (48,844 ) - (48,844 )
Net actuarial gain/loss on
pension scheme 215,320 - 215,320
At 31 January 2022 6,948,443 145,000 7,093,443

Capital redemption reserve
This reserve records the nominal value of shares repurchased by the company.

TONG ENGINEERING LIMITED (REGISTERED NUMBER: 01957036)

NOTES TO THE FINANCIAL STATEMENTS - continued
FOR THE YEAR ENDED 31 JANUARY 2022

22. EMPLOYEE BENEFIT OBLIGATIONS

Tong Engineering Limited (the Company) operates a defined benefit pension arrangement called the Tong Engineering Retirement Benefits Scheme (the Scheme). The Scheme provides benefits based on final salary and length of service on retirement, leaving service or death. The Company also operates a defined contribution scheme, but this is not included in these disclosures.

The Scheme is subject to the Statutory Funding Objective under the Pensions Act 2004. A valuation of the Scheme is carried out at least once every three years to determine whether the Statutory Funding Objective is met.

The most recent comprehensive actuarial valuation of the Scheme was carried out as at 31 January 2021 and the next valuation of the scheme is due as at 31 January 2024. In the event that the valuation reveals a larger deficit than expected the company may be required to increase contributions above those set out in the existing Schedule of Contributions. Conversely, if the position is better than expected, it is possible that contributions may be reduced.

The Company therefore expects to pay contributions of £134,300 in the year to 31 January 2023, in line with the Schedules of Contributions in force over the period (dated 11 February 2019 and 10 March 2022).

The Scheme is managed by an independent corporate Trustee appointed by the Company. The Trustee has responsibility for obtaining valuations of the Scheme, administering benefit payments and investing the Scheme's assets. The Trustee delegates some of these functions to their professional advisers where appropriate.

The effect of the judgements regarding equalisation of Guaranteed Minimum Pensions for ongoing benefits and past transfers has been allowed for in the disclosed liabilities. These were accounted for as past service costs in the previous years, and there is no additional past service cost item in respect of these for the current period.

There were no Scheme amendments, curtailments or settlements during the period.

Risk mitigation strategies
The Scheme's investment strategy includes an allocation to gilt and corporate bond assets. These assets will, to some degree, move in line with the liabilities when interest rates change, the result being that the scheme is partially protected against interest rate risk.

Profile of defined benefit obligation
The weighted average duration of the defined benefit obligation is around 14 years.

The amounts recognised in the balance sheet are as follows:

Defined benefit
pension plans
2022 2021
£    £   
Present value of funded obligations (4,090,000 ) (4,469,000 )
Fair value of plan assets 4,011,000 3,972,000
(79,000 ) (497,000 )
Present value of unfunded obligations - -
Deficit (79,000 ) (497,000 )
Net liability (79,000 ) (497,000 )

TONG ENGINEERING LIMITED (REGISTERED NUMBER: 01957036)

NOTES TO THE FINANCIAL STATEMENTS - continued
FOR THE YEAR ENDED 31 JANUARY 2022

22. EMPLOYEE BENEFIT OBLIGATIONS - continued

The amounts recognised in profit or loss are as follows:

Defined benefit
pension plans
2022 2021
£    £   
Current service cost - -
Net interest from net defined benefit
asset/liability

6,000

5,000
Past service cost - 35,000
6,000 40,000

Actual return on plan assets 76,000 131,000

Changes in the present value of the defined benefit obligation are as follows:

Defined benefit
pension plans
2022 2021
£    £   
Opening defined benefit obligation 4,469,000 4,289,000
Past service cost - 35,000
Interest cost 61,000 71,000
Benefits paid (171,000 ) (175,000 )
Remeasurements:
Actuarial (gains)/losses from changes in
demographic assumptions

7,000

-
Actuarial (gains)/losses from changes in financial
assumptions

(302,000

)

249,000
Experience (gains)/losses on liabilities 26,000 -
4,090,000 4,469,000

Changes in the fair value of scheme assets are as follows:

Defined benefit
pension plans
2022 2021
£    £   
Opening fair value of scheme assets 3,972,000 3,882,000
Contributions by employer 134,000 134,000
Interest on assets 55,000 66,000
Benefits paid (171,000 ) (175,000 )
Return on plan assets (excluding interest income) 21,000 65,000
4,011,000 3,972,000

TONG ENGINEERING LIMITED (REGISTERED NUMBER: 01957036)

NOTES TO THE FINANCIAL STATEMENTS - continued
FOR THE YEAR ENDED 31 JANUARY 2022

22. EMPLOYEE BENEFIT OBLIGATIONS - continued

The amounts recognised in other comprehensive income are as follows:

Defined benefit
pension plans
2022 2021
£    £   
Actuarial (gains)/losses from changes in
demographic assumptions

(7,000

)

-
Actuarial (gains)/losses from changes in financial
assumptions

302,000

(249,000

)
Experience (gains)/losses on liabilities (26,000 ) -
Return on plan assets (excluding interest income) 21,000 65,000
290,000 (184,000 )

The major categories of scheme assets as amounts of total scheme assets are as follows:

Defined benefit
pension plans
2022 2021
£    £   
Equities 1,963,000 1,691,000
Gilts 860,000 965,000
Corporate Bonds 854,000 937,000
Cash 39,000 48,000
Insured Assets 295,000 331,000
4,011,000 3,972,000

The assets do not include any investment in shares of the Company.

Principal actuarial assumptions at the balance sheet date (expressed as weighted averages):

2022 2021
Discount rate 2.15% 1.40%
Inflation assumption (RPI) 3.70% 3.10%
Inflation assumption (CPI) 3.20% 2.50%
Revaluation in deferment 5.00% 5.00%
Pension increase (CPI max 5%) 3.10% 2.40%

At 31 January 2022At 31 January 2021

Post retirement mortality-S3PA tables with CMI 2020
projections using a long-term
improvement rate of 1% pa. The
initial addition of 0.25% pa and the
2020 weight parameter is 0%.
S2PA tables with CMI 2017
projections using a long-term
improvement rate of 1% pa.

Commutation-Members are assumed to take 75% of
their maximum lump sum
Members are assumed to take 75% of
their maximum lump sum

Defined contribution scheme

The company also operates a defined contribution pension scheme.

The assets of the scheme are held separately from those of the company in an independently administered fund. The pension cost charge represents contributions payable by the company to the fund and amounted to £259,093 (2021 - £215,622).

At the year end, no balance remained outstanding to the pension scheme (2021 - Nil).

TONG ENGINEERING LIMITED (REGISTERED NUMBER: 01957036)

NOTES TO THE FINANCIAL STATEMENTS - continued
FOR THE YEAR ENDED 31 JANUARY 2022

23. CAPITAL COMMITMENTS
2022 2021
£    £   
Contracted but not provided for in the
financial statements 101,581 1,062,276

24. RELATED PARTY DISCLOSURES

Entities over which the entity has control, joint control or significant influence
2022 2021
£    £   
Sales 124,343 61,945
Transfers 2,211 1,896
Amount due from related party 186,017 158,940
Amount due to related party 25,000 25,000

Included in debtors for 2021 was a bad debt provision of £97,100 which related to balances owed from related parties. There is no provision for the current year.

During the year, a total of key management personnel compensation of £ 483,805 (2021 - £ 423,601 ) was paid.