Caseware UK (AP4) 2021.0.152 2021.0.152 2022-03-312022-03-312022-03-31false72021-04-01false5false 06929375 2021-04-01 2022-03-31 06929375 2020-04-01 2021-03-31 06929375 2022-03-31 06929375 2021-03-31 06929375 2020-04-01 06929375 c:Director1 2021-04-01 2022-03-31 06929375 c:Director2 2021-04-01 2022-03-31 06929375 c:Director3 2021-04-01 2022-03-31 06929375 c:Director4 2021-04-01 2022-03-31 06929375 c:RegisteredOffice 2021-04-01 2022-03-31 06929375 c:Agent1 2021-04-01 2022-03-31 06929375 d:Buildings 2021-04-01 2022-03-31 06929375 d:PlantMachinery 2021-04-01 2022-03-31 06929375 d:ComputerEquipment 2021-04-01 2022-03-31 06929375 d:CurrentFinancialInstruments 2022-03-31 06929375 d:CurrentFinancialInstruments 2021-03-31 06929375 d:Non-currentFinancialInstruments 2022-03-31 06929375 d:Non-currentFinancialInstruments 2021-03-31 06929375 d:Non-currentFinancialInstruments 1 2022-03-31 06929375 d:Non-currentFinancialInstruments 1 2021-03-31 06929375 d:Non-currentFinancialInstruments 2 2022-03-31 06929375 d:Non-currentFinancialInstruments 2 2021-03-31 06929375 d:CurrentFinancialInstruments d:WithinOneYear 2022-03-31 06929375 d:CurrentFinancialInstruments d:WithinOneYear 2021-03-31 06929375 d:Non-currentFinancialInstruments d:AfterOneYear 2022-03-31 06929375 d:Non-currentFinancialInstruments d:AfterOneYear 2021-03-31 06929375 d:ShareCapital 2022-03-31 06929375 d:ShareCapital 2021-03-31 06929375 d:ShareCapital 2020-04-01 06929375 d:SharePremium 2021-04-01 2022-03-31 06929375 d:SharePremium 2022-03-31 06929375 d:SharePremium 2021-03-31 06929375 d:SharePremium 2020-04-01 06929375 d:CapitalRedemptionReserve 2021-04-01 2022-03-31 06929375 d:CapitalRedemptionReserve 2022-03-31 06929375 d:CapitalRedemptionReserve 2021-03-31 06929375 d:CapitalRedemptionReserve 2020-04-01 06929375 d:OtherMiscellaneousReserve 2021-04-01 2022-03-31 06929375 d:MergerReserve 2021-04-01 2022-03-31 06929375 d:RetainedEarningsAccumulatedLosses 2021-04-01 2022-03-31 06929375 d:RetainedEarningsAccumulatedLosses 2022-03-31 06929375 d:RetainedEarningsAccumulatedLosses 2020-04-01 2021-03-31 06929375 d:RetainedEarningsAccumulatedLosses 2021-03-31 06929375 d:RetainedEarningsAccumulatedLosses 2020-04-01 06929375 d:FinancialAssetsAmortisedCost 2022-03-31 06929375 d:FinancialAssetsAmortisedCost 2021-03-31 06929375 d:FinancialLiabilitiesAmortisedCost 2022-03-31 06929375 d:FinancialLiabilitiesAmortisedCost 2021-03-31 06929375 c:OrdinaryShareClass1 2021-04-01 2022-03-31 06929375 c:OrdinaryShareClass1 2022-03-31 06929375 c:OrdinaryShareClass1 2021-03-31 06929375 c:PreferenceShareClass1 2021-04-01 2022-03-31 06929375 c:PreferenceShareClass1 2022-03-31 06929375 c:PreferenceShareClass1 2021-03-31 06929375 c:FRS102 2021-04-01 2022-03-31 06929375 c:Audited 2021-04-01 2022-03-31 06929375 c:FullAccounts 2021-04-01 2022-03-31 06929375 c:PrivateLimitedCompanyLtd 2021-04-01 2022-03-31 06929375 d:Subsidiary1 2021-04-01 2022-03-31 06929375 d:Subsidiary2 2021-04-01 2022-03-31 06929375 d:Subsidiary3 2021-04-01 2022-03-31 06929375 d:Subsidiary1 1 2021-04-01 2022-03-31 06929375 d:Subsidiary2 1 2021-04-01 2022-03-31 06929375 d:Subsidiary3 1 2021-04-01 2022-03-31 06929375 c:Consolidated 2022-03-31 06929375 c:ConsolidatedGroupCompanyAccounts 2021-04-01 2022-03-31 06929375 4 2021-04-01 2022-03-31 06929375 6 2021-04-01 2022-03-31 xbrli:shares iso4217:GBP xbrli:pure

Registered number: 06929375










KILFROST GROUP LIMITED










ANNUAL REPORT AND FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 MARCH 2022

 
KILFROST GROUP LIMITED
 
 
COMPANY INFORMATION


Directors
Miss J C Halbert 
Miss J L Halbert 
Mr M S Halbert 
Mr G Lydiate 




Registered number
06929375



Registered office
Albion Works

Haltwhistle

Northumberland

NE49 0HJ




Independent auditors
Ryecroft Glenton
Chartered Accountants & Statutory Auditor

32 Portland Terrace

Newcastle upon Tyne

NE2 1QP




Bankers
Allied Irish Bank (GB)

One Trinity Gardens

Broadchare

Newcastle upon Tyne

NE1 2HF




Solicitors
Womble Bond Dickinson (UK) LLP
St. Ann's Wharf

112 Quayside

Newcastle upon Tyne

NE1 3DX





 
KILFROST GROUP LIMITED
 

CONTENTS



Page
Group Strategic Report
1 - 2
Directors' Report
3 - 5
Independent Auditors' Report
6 - 9
Consolidated Statement of Comprehensive Income
10
Consolidated Balance Sheet
11 - 12
Company Balance Sheet
13
Consolidated Statement of Changes in Equity
14
Company Statement of Changes in Equity
15
Consolidated Statement of Cash Flows
16
Consolidated Analysis of Net Debt
17
Notes to the Financial Statements
18 - 42


 
KILFROST GROUP LIMITED
 
 
GROUP STRATEGIC REPORT
FOR THE YEAR ENDED 31 MARCH 2022

Introduction
 
Kilfrost has entered its 91st year as a chemical company. Its legacy in Aircraft De-icing Fluids (ADF) is the foundation which all new products are based on. As such it continues to lead the way in product development. Its Speciality Fluids (SFD) continues to make inroads into the Market. 

Business review
 
For the aviation industry the past 12 months have been the beginning of the recovery phase post COVID. Whilst passenger numbers have been depressed from previous years there was still very positive signs of recovery moving at a pace. The past 12 months were also noted for a mild winter. Coupled together this meant a lower, than average, use of ADF. At the same time the cost of our major raw material (MPG) remained at a historic high. However, due our contractual pricing mechanisms we remained profitable.
In SFD we continued to make further inroads into Scandinavia which is becoming a core market. For the USA we continue to move ahead but further work needs to be done on Sales and Marketing.
In summary Kilfrost had a good trading year and is in a strong position for the next phase of growth. 

Principal risks and uncertainties
 
The principal risks and uncertainties facing the Company are broadly grouped as market, competitive, legislative and financial risk.
- Market risks
The market for our ADF products is highly seasonal and significantly variable, depending on weather conditions. We aim to mitigate this risk going forward through furthering the development and growth in our Speciality Fluids Division.
- Competitive risks
The Group operates in a global market and services customers either directly or by way of licence agreements in more than 50 countries. These customers select suppliers and products based on a combination of factors including price, delivery, quality and reputation. The Group has a wide range of customers with no individual customer accounting for a significant proportion of the entire business with many customers having dealt with the Company for a number of decades. The Kilfrost brand is well respected in the global market place and viewed as a leader in its field.
- Legislative risks
The Group is governed by a wide range of legislation, particularly in the supply of fluids to the aircraft industry. The Group takes great care to keep up to date with all new initiatives to ensure that it can maintain its position at the forefront of the industry.
 
Page 1

 
KILFROST GROUP LIMITED
 

GROUP STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2022


- Financial risks
The Group's main areas of financial risks are credit, foreign currency and liquidity risks.
The Group's policy is to minimise credit risk by ensuring that credit terms are only granted to customers who demonstrate an appropriate history and credit position. Credit insurance is held with Atradius.
The Group manages foreign currency risk through transacting business in only three currencies, namely Sterling, Euro and US Dollars. Each currency is managed by matching income and expenditure whenever possible.
Liquidity risk is the risk that an entity will encounter difficulty in meeting obligations associated with financial liabilities. The Group aims to mitigate liquidity risk by managing cash generation from its activities on a regular basis, utilising appropriate credit facilities for working capital and longer term investments.
Our new Speciality Fluids products are going into a steady mature market dominated by a few key players. Our aim is to show a new innovative way of servicing this market by showing better performance and safety without compromise on either.
Financially the business has sufficient liquidity to cover at least the next 12 months trading after the accounts are finalised. 

Financial key performance indicators
 
The Group's key financial performance indicators for the year were:



2022
2021
£'000
£'000
Turnover

14,930

9,039
 
Operating (loss) / profit

1,788

(235)
 
(Loss) / profit for the year after taxation

1,703

(288)
 
Shareholders' funds

4,740

2,909
 


This report was approved by the board on 11 August 2022 and signed on its behalf.





Mr G Lydiate
Director

Page 2

 
KILFROST GROUP LIMITED
 
 
 
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 MARCH 2022

The directors present their report and the financial statements for the year ended 31 March 2022.

Principal activity

The Group’s principal activity during the period was that of the manufacture of anti-icing and de-icing fluids, predominantly for the aircraft market. 

Results and dividends

The profit for the year, after taxation, amounted to £1,703,000 (2021 - loss £288,000.

Directors

The directors who served during the year were:

Miss J C Halbert 
Miss J L Halbert 
Mr M S Halbert 
Mr G Lydiate 

Directors' responsibilities statement

The directors are responsible for preparing the Group Strategic Report, the Directors' Report and the consolidated 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 applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice), including Financial Reporting Standard 102 ‘The Financial Reporting Standard applicable in the UK and Republic of Ireland'. 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 the Group and of the profit or loss of the Group for that period.

 In preparing these financial statements, the directors are required to:


select suitable accounting policies for the Group's financial statements and then apply them consistently;

make judgments 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 Group 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 the Group and to enable them to ensure that the financial statements comply with the Companies Act 2006They are also responsible for safeguarding the assets of the Company and the Group and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

The directors are responsible for the maintenance and integrity of the corporate and financial information included on the Group's website. Legislation in the United Kingdom governing the preparation and dissemination of financial statements and other information included in Directors' Reports may differ from legislation in other jurisdictions.

Page 3

 
KILFROST GROUP LIMITED
 
 
 
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2022

Environmental matters

The Group will seek to minimise adverse impacts on the environment from its activities, whilst continuing to address health, safety and economic issues. The Group has complied with all applicable legislation and regulations.

Future developments

The business will continue to look at how to diversify further over the coming years

Research and development activities

The R&D team continue to invest in research and development activities in respect of both SFD and ADF with patents currently being applied for. Costs charged during the year amounted to £524,000 (2021 - £487,000).

Going concern

The directors have performed an assessment of the Group’s ability to continue trading as a going concern by reference to trading forecasts and financing requirements for a period, in excess of 15 months from the date of approval of these financial statements. The directors are satisfied that the going concern basis of preparation for these financial statements is appropriate.
In assessing the Group’s ability to continue trading as a going concern for the next 15 months the directors have examined all of the potential uncertainties which surround the business and the only significant uncertainty is the weather. However, the long-range forecasts are showing colder conditions in the foreseeable future. Also, this uncertainty is mitigated by the present structure of the business.
The directors are aware of the ongoing impact that Covid-19 is having on the aviation industry and consequently on the Group. However the impact is not considered to be catastrophic given that Kilfrost has now traded for over 2 years under the various Covid-19 related restrictions. The directors are confident the aviation industry will be back to normal levels by the time the Group enter their busiest period of output.
The directors have considered these uncertainties and believe that there is sufficient financial headroom available for the forthcoming 15 months to mitigate the associated risks.
The direction of the business is set with a combination of continued R&D activity, ADF activity in the British Isles and invigorated activities in the Speciality Fluids Division. 

Disclosure of information to auditors

Each of the persons who are directors at the time when this Directors' Report is approved has confirmed that:
 
so far as the director is aware, there is no relevant audit information of which the Company and the Group's auditors are unaware, and

the director has taken all the steps that ought to have been taken as a director in order to be aware of any relevant audit information and to establish that the Company and the Group's auditors are aware of that information.

Page 4

 
KILFROST GROUP LIMITED
 
 
 
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2022


Auditors

The auditorsRyecroft Glentonwill be proposed for reappointment in accordance with section 485 of the Companies Act 2006.

This report was approved by the board on 11 August 2022 and signed on its behalf.
 





Mr G Lydiate
Director

Page 5

 
KILFROST GROUP LIMITED
 
 
 
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF KILFROST GROUP LIMITED
 

Opinion


We have audited the financial statements of Kilfrost Group Limited (the 'parent Company') and its subsidiaries (the 'Group') for the year ended 31 March 2022, which comprise the Group Statement of Comprehensive Income, the Group and Company Balance Sheets, the Group Statement of Cash Flows, the Group and Company Statement of Changes in Equity and the related notes, including a summary of significant accounting policiesThe 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 Group's and of the parent Company's affairs as at 31 March 2022 and of the Group's 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 Group in accordance with the ethical requirements that are relevant to our audit of the financial statements in the United Kingdom, including the Financial Reporting Council'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 Group's or the parent 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.


Page 6

 
KILFROST GROUP LIMITED
 
 
 
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF KILFROST GROUP LIMITED (CONTINUED)


Other information


The other information comprises the information included in the Annual Report other than the financial statements and  our Auditors' 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.


Opinion 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 Group 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 Group Strategic Report and the Directors' Report 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 Group and the parent Company and its environment obtained in the course of the audit, we have not identified material misstatements in the Group 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 by the parent Company, or returns adequate for our audit have not been received from branches not visited by us; or
the parent Company 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.


Page 7

 
KILFROST GROUP LIMITED
 
 
 
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF KILFROST GROUP LIMITED (CONTINUED)


Responsibilities of directors
 

As explained more fully in the Directors' Responsibilities Statement set out on page 3, 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 Group's and the parent 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 Group or the parent 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 an Auditors' 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 Group financial statements.


The extent to which the audit was considered capable of detecting 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 misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below:

• the engagement partner ensured that the engagement team collectively had the appropriate                                competence, capabilities and skills to identify or recognise non-compliance with applicable laws and    regulations;
• we identified the laws and regulations applicable to the Company through discussions with directors and   other management, and from our commercial knowledge and experience of the sector in which the    company operates;
• we focused on specific laws and regulations which we considered may have a direct material effect on    the financial statements or the operations of the Company, including the Companies Act 2006 and    taxation legislation;
• we assessed the extent of compliance with the laws and regulations identified above through making    enquiries of management and inspecting legal correspondence; and
• we ensured that the identified laws and regulations were communicated within the audit team regularly    and the team remained alert to instances of non-compliance throughout the audit. 
We assessed the susceptibility of the Group financial statements to material misstatement, including obtaining an understanding of how fraud might occur, by:  
• making enquiries of management as to where they considered there was susceptibility to fraud and      their knowledge of actual, suspected and alleged fraud; and
• considering the internal controls in place to mitigate risks of fraud and non-compliance with laws and    regulations.
 
Page 8

 
KILFROST GROUP LIMITED
 
 
 
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF KILFROST GROUP LIMITED (CONTINUED)


To address the risk of fraud through management bias and override of controls, we:  
• performed analytical procedures to identify any unusual or unexpected relationships;
• tested journal entries to identify unusual transactions; and
• assessed whether judgements and assumptions made in determining the accounting estimates were    indicative of potential bias. 
In response to the risk of irregularities and non-compliance with laws and regulations, we designed procedures which included, but were not limited to:  
• agreeing financial statement disclosures to underlying supporting documentation;
• reading the minutes of meetings of those charged with governance;
• enquiring of management as to actual and potential litigation and claims; and
• reviewing correspondence with HMRC, and the Company’s legal advisers where appropriate.
There are inherent limitations in our audit procedures described above. The more removed that laws and regulations are from financial transactions, the less likely it is that we would become aware of non-compliance. Auditing standards also limit the audit procedures required to identify non-compliance with laws and regulations to enquiry of the directors and other management and the inspection of regulatory and legal correspondence, if any. 
Material misstatements that arise due to fraud can be harder to detect than those that arise from error as they may involve deliberate concealment or collusion. 


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 Auditors' Report.


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 2006Our audit work has been undertaken so that we might state to the Company's members those matters we are required to state to them in an Auditors' Report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the Company and the Company's members, as a body, for our audit work, for this report, or for the opinions we have formed.





Grahame Maughan (Senior Statutory Auditor)
  
for and on behalf of
Ryecroft Glenton
 
Chartered Accountants
Statutory Auditor
  
32 Portland Terrace
Newcastle upon Tyne
NE2 1QP

11 August 2022
Page 9

 
KILFROST GROUP LIMITED
 
 
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 MARCH 2022

2022
2021
Note
£000
£000

  

Turnover
 4 
14,930
9,039

Cost of sales
  
(10,501)
(6,031)

Gross profit
  
4,429
3,008

Administrative expenses
  
(3,334)
(3,458)

Other operating income
 5 
693
215

Operating profit/(loss)
 6 
1,788
(235)

Interest payable and similar charges
 10 
(54)
(53)

Profit/(loss) before taxation
  
1,734
(288)

Tax on profit/(loss)
 11 
(31)
-

Profit/(loss) for the financial year
  
1,703
(288)

  

Currency translation differences
  
3
(8)

Actuarial gains / (losses) on defined benefit pension scheme
 23 
125
(133)

Other comprehensive income for the financial year
  
128
(141)

  

Total comprehensive income for the financial year
  
1,831
(429)

Profit/(loss) for the financial year attributable to:
  

Owners of the parent Company
  
1,703
(288)

  
1,703
(288)

There were no recognised gains and losses for 2022 or 2021 other than those included in the consolidated statement of comprehensive income.

The notes on pages 18 to 42 form part of these financial statements.

Page 10

 
KILFROST GROUP LIMITED
REGISTERED NUMBER: 06929375

CONSOLIDATED BALANCE SHEET
AS AT 31 MARCH 2022

2022
2021
Note
£000
£000

Fixed assets
  

Tangible assets
 12 
769
843

  
769
843

Current assets
  

Stocks
 14 
3,456
1,940

Debtors: amounts falling due within one year
 15 
2,540
2,880

Cash at bank and in hand
 16 
1,784
1,410

  
7,780
6,230

Creditors: amounts falling due within one year
 17 
(2,286)
(2,415)

Net current assets
  
 
 
5,494
 
 
3,815

Total assets less current liabilities
  
6,263
4,658

Creditors: amounts falling due after more than one year
 18 
(1,000)
(1,000)

Provisions for liabilities
  

Deferred taxation
 20 
(30)
-

  
 
 
(30)
 
 
-

Net assets excluding pension liability
  
5,233
3,658

Pension liability
 23 
(493)
(749)

Net assets
  
4,740
2,909

Page 11

 
KILFROST GROUP LIMITED
REGISTERED NUMBER: 06929375
    
CONSOLIDATED BALANCE SHEET (CONTINUED)
AS AT 31 MARCH 2022

2022
2021
Note
£000
£000

Capital and reserves
  

Called up share capital 
 21 
72
72

Share premium account
 22 
1,416
1,416

Capital redemption reserve
 22 
7
7

Capital contribution
 22 
1,508
1,508

Merger reserve
 22 
893
893

Profit and loss account
 22 
844
(987)

Equity attributable to owners of the parent Company
  
4,740
2,909

  
4,740
2,909


The financial statements were approved and authorised for issue by the board and were signed on its behalf on 11 August 2022.




Mr G Lydiate
Director

The notes on pages 18 to 42 form part of these financial statements.

Page 12

 
KILFROST GROUP LIMITED
REGISTERED NUMBER: 06929375

COMPANY BALANCE SHEET
AS AT 31 MARCH 2022

2022
2021
Note
£000
£000

Fixed assets
  

Investments
 13 
76
76

  
76
76

Current assets
  

Debtors: amounts falling due within one year
 15 
2,500
3

  
2,500
3

Creditors: amounts falling due within one year
 17 
(4)
(160)

Net current assets/(liabilities)
  
 
 
2,496
 
 
(157)

Total assets less current liabilities
  
2,572
(81)

  

Creditors: amounts falling due after more than one year
 18 
(1,000)
(1,000)

  

Net assets excluding pension liability
  
1,572
(1,081)

Net assets/(liabilities)
  
1,572
(1,081)


Capital and reserves
  

Called up share capital 
 21 
72
72

Share premium account
 22 
1,416
1,416

Capital redemption reserve
 22 
7
7

Profit and loss account
 22 
77
(2,576)

  
1,572
(1,081)


The financial statements were approved and authorised for issue by the board and were signed on its behalf on 11 August 2022.




Mr G Lydiate
Director

The notes on pages 18 to 42 form part of these financial statements.

Page 13

 

 
KILFROST GROUP LIMITED


 

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 MARCH 2022



Called up share capital
Share premium account
Capital redemption reserve
Capital contribution
Merger reserve
Profit and loss account
Total equity


£000
£000
£000
£000
£000
£000
£000



At 1 April 2020
72
1,416
7
1,508
893
(558)
3,338





Loss for the year
-
-
-
-
-
(288)
(288)


Currency translation differences
-
-
-
-
-
(8)
(8)


Actuarial losses on pension scheme
-
-
-
-
-
(133)
(133)





At 1 April 2021
72
1,416
7
1,508
893
(987)
2,909





Profit for the year
-
-
-
-
-
1,703
1,703


Currency translation differences
-
-
-
-
-
3
3


Actuarial gains on pension scheme
-
-
-
-
-
125
125



At 31 March 2022
72
1,416
7
1,508
893
844
4,740



The notes on pages 18 to 42 form part of these financial statements.

Page 14

 
KILFROST GROUP LIMITED
 

COMPANY STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 MARCH 2022


Called up share capital
Share premium account
Capital redemption reserve
Profit and loss account
Total equity

£000
£000
£000
£000
£000


At 1 April 2020
72
1,416
7
(3,372)
(1,877)



Profit for the year
-
-
-
796
796



At 1 April 2021
72
1,416
7
(2,576)
(1,081)



Profit for the year
-
-
-
2,653
2,653


At 31 March 2022
72
1,416
7
77
1,572


The notes on pages 18 to 42 form part of these financial statements.

Page 15

 
KILFROST GROUP LIMITED
 

CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 MARCH 2022

2022
2021
£000
£000

Cash flows from operating activities

Profit/(loss) for the financial year
1,703
(288)

Adjustments for:

Depreciation of tangible assets
83
90

Loss on disposal of tangible assets
(3)
-

Interest paid
54
53

Taxation charge
31
-

(Increase)/decrease in stocks
(1,644)
674

Decrease/(increase) in debtors
340
(626)

Increase in creditors
22
146

Increase in net pension assets/liabs
-
42

Corporation tax (paid)/received
(1)
-

Net cash generated from operating activities

585
91


Cash flows from investing activities

Purchase of tangible fixed assets
(9)
(80)

Sale of tangible fixed assets
3
-

Net cash from investing activities

(6)
(80)

Cash flows from financing activities

Repayment of other loans
(151)
(800)

Interest paid
(54)
(53)

Net cash used in financing activities
(205)
(853)

Net increase/(decrease) in cash and cash equivalents
374
(842)

Cash and cash equivalents at beginning of year
1,410
2,252

Cash and cash equivalents at the end of year
1,784
1,410


Cash and cash equivalents at the end of year comprise:

Cash at bank and in hand
1,784
1,410

1,784
1,410


The notes on pages 18 to 42 form part of these financial statements.

Page 16

 
KILFROST GROUP LIMITED
 

CONSOLIDATED ANALYSIS OF NET DEBT
FOR THE YEAR ENDED 31 MARCH 2022




At 1 April 2021
Cash flows
At 31 March 2022
£000

£000

£000

Cash at bank and in hand

1,410

374

1,784

Debt due after 1 year

(1,000)

-

(1,000)

Debt due within 1 year

(651)

151

(500)


(241)
525
284

The notes on pages 18 to 42 form part of these financial statements.

Page 17

 
KILFROST GROUP LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2022

1.


General information

The Company is a private limited company, which is incorporated and registered in England (no. 06929375). The address of the registered office is Albion Works, Haltwhistle, Northumberland, NE49 0HJ. The principal activity of the Company and Group during the period was that of the manufacture of anti-icing and de-icing fluids, predominantly for the aircraft market.

2.Accounting policies

 
2.1

Basis of preparation of financial statements

The financial statements have been prepared under the historical cost convention unless otherwise specified within these accounting policies and in accordance with Financial Reporting Standard 102, the Financial Reporting Standard applicable in the UK and the Republic of Ireland and the Companies Act 2006.

The financial statements are prepared in sterling, which is the functional currency of the Group.
Monetary amounts in these financial statements are rounded to the nearest £'000.

The preparation of financial statements in compliance with FRS 102 requires the use of certain critical accounting estimates. It also requires Group management to exercise judgment in applying the Group's accounting policies (see note 3).

The Company has taken advantage of the exemption allowed under section 408 of the Companies Act 2006 and has not presented its own Statement of Comprehensive Income in these financial statements.

The following principal accounting policies have been applied:

 
2.2

Basis of consolidation

The consolidated financial statements present the results of the Company and its own subsidiaries ("the Group") as if they form a single entity. Intercompany transactions and balances between group companies are therefore eliminated in full.
The consolidated financial statements incorporate the results of business combinations using the purchase method. In the Balance Sheet, the acquiree's identifiable assets, liabilities and contingent liabilities are initially recognised at their fair values at the acquisition date. The results of acquired operations are included in the Consolidated Statement of Comprehensive Income from the date on which control is obtained. They are deconsolidated from the date control ceases.
In accordance with the transitional exemption available in FRS 102, the group has chosen not to retrospectively apply the standard to business combinations that occurred before the date of transition to FRS 102, being 01 October 2013.

Therefore, the Group continues to recognise a merger reserve which arose on a past business combination that was accounted for as a merger in accordance with UK GAAP as applied at that time.

The Company has taken advantage of the exemption allowed under section 408 of the Companies Act 2006 and has not presented its own Statement of Comprehensive Income in these financial statements. The profit after tax of the parent Company for the year was £2,653,000 (2021:  £796,000).

Page 18

 
KILFROST GROUP LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2022

2.Accounting policies (continued)

 
2.3

Going concern

The Group financial statements are prepared on a going concern basis.
The parent company had net assets of £1,572,000 and the Group net assets of £4,740,000 at the balance sheet date.
The directors have performed an assessment of the Group’s ability to continue trading as a going concern by reference to trading forecasts and financing requirements for a period, in excess of 15 months from the date of approval of these financial statements. The directors are satisfied that the going concern basis of preparation for these financial statements is appropriate.
In assessing the Group’s ability to continue trading as a going concern for the next 15 months the directors have examined all of the potential uncertainties which surround the business and the only significant uncertainty is the weather. However, the long-range forecasts are showing colder conditions in the foreseeable future. Also, this uncertainty is mitigated by the present structure of the business.
The directors are aware of the ongoing impact that Covid-19 is having on the aviation industry and consequently on the group. However the impact is not considered to be catastrophic given that Kilfrost has now traded for over 2 years under the various Covid-19 related restrictions. The directors are confident the aviation industry will be back to normal levels by the time the group enter their busiest period of output.
The directors have considered these uncertainties and believe that there is sufficient financial headroom available for the forthcoming 15 months to mitigate the associated risks.
The direction of the business is set with a combination of continued R&D activity, ADF activity in the British Isles and invigorated activities in the Speciality Fluids Division. 

Page 19

 
KILFROST GROUP LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2022

2.Accounting policies (continued)

 
2.4

Revenue

Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Group and the revenue can be reliably measured. Revenue is measured as the fair value of the consideration received or receivable, excluding discounts, rebates, value added tax and other sales taxes. The following criteria must also be met before revenue is recognised:

Sale of goods

Revenue from the sale of goods is recognised when all of the following conditions are satisfied:
the Group has transferred the significant risks and rewards of ownership to the buyer;
the Group retains neither continuing managerial involvement to the degree usually associated with ownership nor effective control over the goods sold;
the amount of revenue can be measured reliably;
it is probable that the Group will receive the consideration due under the transaction; and
the costs incurred or to be incurred in respect of the transaction can be measured reliably.

Rendering of services

Revenue from a contract to provide services is recognised in the period in which the services are provided in accordance with the stage of completion of the contract when all of the following conditions are satisfied:
the amount of revenue can be measured reliably;
it is probable that the Group will receive the consideration due under the contract;
the stage of completion of the contract at the end of the reporting period can be measured reliably; and
the costs incurred and the costs to complete the contract can be measured reliably.

 
2.5

Tangible fixed assets

Tangible fixed assets under the cost model are stated at historical cost less accumulated depreciation and any accumulated impairment losses. Historical cost includes expenditure that is directly attributable to bringing the asset to the location and condition necessary for it to be capable of operating in the manner intended by management.

Page 20

 
KILFROST GROUP LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2022

2.Accounting policies (continued)


2.5
Tangible fixed assets (continued)

Depreciation is charged so as to allocate the cost of assets less their residual value over their estimated useful lives, using the straight-line method.

Depreciation is provided on the following basis:

Freehold property
-
2% straight line basis
Plant and machinery
-
5-35% straight line basis
Computer equipment
-
33% straight line basis

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.

Gains and losses on disposals are determined by comparing the proceeds with the carrying amount and are recognised in profit or loss.

 
2.6

Valuation of investments

Investments in subsidiaries are measured at cost less accumulated impairment.

 
2.7

Stocks

Stocks are stated at the lower of cost and net realisable value, being 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 and finished goods include labour and attributable overheads.
At each Balance Sheet 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 or loss.

 
2.8

Debtors

Short-term debtors are measured at transaction price, less any impairment. Loans receivable are measured initially at fair value, net of transaction costs, and are measured subsequently at amortised cost using the effective interest method, less any impairment.

 
2.9

Cash and cash equivalents

Cash is represented by cash in hand and deposits with financial institutions repayable without penalty on notice of not more than 24 hours. Cash equivalents are highly liquid investments that mature in no more than three months from the date of acquisition and that are readily convertible to known amounts of cash with insignificant risk of change in value.

In the Consolidated Statement of Cash Flows, cash and cash equivalents are shown net of bank overdrafts that are repayable on demand and form an integral part of the Group's cash management.

Page 21

 
KILFROST GROUP LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2022

2.Accounting policies (continued)

 
2.10

Financial instruments

The Group only enters into basic financial instrument transactions that result in the recognition of financial assets and liabilities like trade and other debtors and creditors, loans from banks and other third parties, loans to related parties and investments in ordinary shares.

Debt instruments (other than those wholly repayable or receivable within one year), including loans and other accounts receivable and payable, are initially measured at present value of the future cash flows and subsequently at amortised cost using the effective interest method. Debt instruments that are payable or receivable within one year, typically trade debtors and creditors, are measured, initially and subsequently, at the undiscounted amount of the cash or other consideration expected to be paid or received. However, if the arrangements of a short-term instrument constitute a financing transaction, like the payment of a trade debt deferred beyond normal business terms or in case of an out-right short-term loan that is not at market rate, the financial asset or liability is measured, initially at the present value of future cash flows discounted at a market rate of interest for a similar debt instrument and subsequently at amortised cost, unless it qualifies as a loan from a director in the case of a small company, or a public benefit entity concessionary loan.

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 Consolidated Statement of Comprehensive Income.

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 of the recoverable amount, which is an approximation of the amount that the Group would receive for the asset if it were to be sold at the balance sheet date.

Financial assets and liabilities are offset and the net amount reported in the Balance Sheet when there is an 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.

 
2.11

Creditors

Short-term creditors are measured at the transaction price. Other financial liabilities, including bank loans, are measured initially at fair value, net of transaction costs, and are measured subsequently at amortised cost using the effective interest method.

 
2.12

Government grants

Grants are accounted under the accruals model as permitted by FRS 102. Grants relating to expenditure on tangible fixed assets are credited to profit or loss at the same rate as the depreciation on the assets to which the grant relates. The deferred element of grants is included in creditors as deferred income.
Grants of a revenue nature are recognised in the Consolidated Statement of Comprehensive Income in the same period as the related expenditure.

Page 22

 
KILFROST GROUP LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2022

2.Accounting policies (continued)

 
2.13

Foreign currency translation

Functional and presentation currency

The Group's functional and presentational currency is GBP.

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 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 profit or loss except when deferred in other comprehensive income as qualifying cash flow hedges.

Foreign exchange gains and losses that relate to borrowings and cash and cash equivalents are presented in the Consolidated Statement of Comprehensive Income within 'finance income or costs'. All other foreign exchange gains and losses are presented in profit or loss within 'other operating income'.

On consolidation, the results of overseas operations are translated into Sterling at rates approximating to those ruling when the transactions took place. All assets and liabilities of overseas operations are translated at the rate ruling at the reporting date. Exchange differences arising on translating the opening net assets at opening rate and the results of overseas operations at actual rate are recognised in other comprehensive income.

 
2.14

Finance costs

Finance costs are charged to profit or loss over the term of the debt using the effective interest method so that the amount charged is at a constant rate on the carrying amount. Issue costs are initially recognised as a reduction in the proceeds of the associated capital instrument.

  
2.15

Share based payments

The Group operates a share option scheme for certain directors. The fair value of options granted, if material, is recognised as an employee expense in the income statement with a corresponding increase in equity. The fair value is measured at grant date and spread over the period during which the employees become unconditionally entitled to the options. The fair value of the options is measured using the "Black-Scholes" option valuation model, taking into account the terms and conditions upon which the options were granted. the amount recognised in the income statement, if material, is adjusted at each balance sheet date to reflect the number of share options that vest revised for expected leavers and estimated achievement of non-market based vesting conditions.

Page 23

 
KILFROST GROUP LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2022

2.Accounting policies (continued)

 
2.16

Operating leases: the Group as lessee

Rentals paid under operating leases are charged to profit or loss on a straight-line basis over the lease term.

Benefits received and receivable as an incentive to sign an operating lease are recognised on a straight-line basis over the lease term, unless another systematic basis is representative of the time pattern of the lessee's benefit from the use of the leased asset.

The Group has taken advantage of the optional exemption available on transition to FRS 102 which allows lease incentives on leases entered into before the date of transition to the standard 01 October 2013 to continue to be charged over the period to the first market rent review rather than the term of the lease.

Page 24

 
KILFROST GROUP LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2022

2.Accounting policies (continued)

  
2.17

Pensions

Defined contribution pension plan
The Group operates a defined contribution plan for its employees. A defined contribution plan is a pension plan under which the Group pays fixed contributions into a separate entity. Once the contributions have been paid the Group has no further payment obligations.
The contributions are recognised as an expense in the Statement of Comprehensive Income when they fall due. Amounts not paid are shown in accruals as a liability in the Balance Sheet. The assets of the plan are held separately from the Group in independently administered funds.
Defined benefit pension plan
The Group operates a defined benefit plan for certain employees. 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 asset/liability recognised in the Balance Sheet in respect of the defined benefit plan is the present value of the defined benefit obligation at the end of the Balance Sheet date less the fair value of plan assets at the Balance Sheet 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 Group 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 Group'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 profit or loss 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 defined benefit obligation and the fair value of plan assets. This cost is recognised in profit or loss as a 'finance expense'.

 
2.18

Borrowing costs

All borrowing costs are recognised in profit or loss in the year in which they are incurred.

Page 25

 
KILFROST GROUP LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2022

2.Accounting policies (continued)

 
2.19

Provisions for liabilities

Provisions are made where an event has taken place that gives the Group a legal or constructive obligation that probably requires settlement by a transfer of economic benefit, and a reliable estimate can be made of the amount of the obligation.
Provisions are charged as an expense to profit or loss in the year that the Group becomes aware of the obligation, and are measured at the best estimate at the balance sheet date of the expenditure required to settle the obligation, taking into account relevant risks and uncertainties.
When payments are eventually made, they are charged to the provision carried in the Balance Sheet.

 
2.20

Current and deferred taxation

The tax expense for the year comprises current and deferred tax. Tax is recognised in profit or loss except that a charge attributable to an item of income and expense recognised as other comprehensive income or to an item recognised directly in equity is also recognised in other comprehensive income or directly in equity respectively.

The current income tax charge is calculated on the basis of tax rates and laws that have been enacted or substantively enacted by the balance sheet date in the countries where the Company and the Group operate and generate income.

Deferred tax balances are recognised in respect of all timing differences that have originated but not reversed by the balance sheet date, except that:
The recognition of deferred tax assets is limited to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits;
Any deferred tax balances are reversed if and when all conditions for retaining associated tax allowances have been met; and
Where they relate to timing differences in respect of interests in subsidiaries, associates, branches and joint ventures and the Group can control the reversal of the timing differences and such reversal is not considered probable in the foreseeable future.

Deferred tax balances are not recognised in respect of permanent differences except in respect of business combinations, when deferred tax is recognised on the differences between the fair values of assets acquired and the future tax deductions available for them and the differences between the fair values of liabilities acquired and the amount that will be assessed for tax. Deferred tax is determined using tax rates and laws that have been enacted or substantively enacted by the balance sheet date.

 
2.21

Exceptional items

Exceptional items are transactions that fall within the ordinary activities of the Group but are presented separately due to their size or incidence.

Page 26

 
KILFROST GROUP LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2022

2.Accounting policies (continued)

 
2.22

Research and development

In the research phase of an internal project it is not possible to demonstrate that the project will generate future economic benefits and hence all expenditure on research shall be recognised as an expense when it is incurred. Intangible assets are recognised from the development phase of a project if and only if certain specific criteria are met in order to demonstrate the asset will generate probable future economic benefits and that its cost can be reliably measured. The capitalised development costs are subsequently amortised on a straight line basis over their useful economic lives, which range from 3 to 6 years.
If it is not possible to distinguish between the research phase and the development phase of an internal project, the expenditure is treated as if it were all incurred in the research phase only.


3.


Judgements in applying accounting policies and key sources of estimation uncertainty

Significant judgements are required in relation to the assumptions for the valuation of the pension scheme surplus or deficit including discount rates, interest rates, mortality rates, and inflation. The directors receive independent external advice from actuarial consultants in arriving at the scheme assumptions which are outlined in Note 23 of the financial statements. 


4.


Turnover

The whole of the turnover is attributable to net invoiced sales of goods excluding value added tax and relates to the continuing principal activity of the Group. An analysis of turnover by geographical market is given below:

Analysis of turnover by country of destination:

2022
2021
£000
£000

United Kingdom
10,776
5,375

Rest of Europe
3,447
3,181

Rest of the world
707
483

14,930
9,039



5.


Other operating income

2022
2021
£000
£000

Royalty receivable
693
215

693
215


Page 27

 
KILFROST GROUP LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2022

6.


Operating profit/(loss)

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

2022
2021
£000
£000

Exchange differences
(38)
(11)

Other operating lease rentals
6
22


7.


Auditors' remuneration

2022
2021
£000
£000


Fees payable to the Group's auditor and its associates for the audit of the Group's annual accounts
38
34

Fees payable to the Group's auditor and its associates in respect of:


Other services relating to taxation
8
7

All other services
4
-


Fees payable to the Group's auditor and its associates in connection with the Company's pension scheme(s) in respect of:


2022
2021
£000
£000


The auditing of accounts of associates of the company pursuant to legislation
11
12

11
12

Page 28

 
KILFROST GROUP LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2022

8.


Employees

Staff costs, including directors' remuneration, were as follows:


Group
Group
Company
Company
2022
2021
2022
2021
£000
£000
£000
£000


Wages and salaries
1,791
1,838
664
589

Social security costs
207
214
84
75

Cost of defined contribution scheme
126
136
6
3

2,124
2,188
754
667


The average monthly number of employees, including the directors, during the year was as follows:



Group
Group
Company
Company
        2022
        2021
        2022
        2021
            No.
            No.
            No.
            No.









Production
15
16
-
-



Research and development
7
8
-
-



Sales and administration
17
20
5
7

39
44
5
7


9.


Directors' remuneration

2022
2021
£000
£000

Directors' emoluments
511
438

511
438


The highest paid director received remuneration of £295,000 (2021 : £248,000).

The directors did not exercise any share options during the year (2021 : £Nil).

Page 29

 
KILFROST GROUP LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2022

10.


Interest payable and similar expenses

2022
2021
£000
£000


Bank interest payable
4
2

Other interest payable
50
51

54
53


11.


Taxation


2022
2021
£000
£000

Corporation tax


Current tax on profits for the year
1
-


1
-


Total current tax
1
-

Deferred tax


Origination and reversal of timing differences
30
-

Total deferred tax
30
-


Taxation on profit on ordinary activities
31
-
Page 30

 
KILFROST GROUP LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2022
 
11.Taxation (continued)


Factors affecting tax charge for the year

The tax assessed for the year is lower than (2021 - higher than) the standard rate of corporation tax in the UK of 19% (2021 - 19%). The differences are explained below:

2022
2021
£000
£000


Profit/(loss) on ordinary activities before tax
1,734
(288)


Profit/(loss) on ordinary activities multiplied by standard rate of corporation tax in the UK of 19% (2021 - 19%)
329
(55)

Effects of:


Capital allowances for year in excess of depreciation
(1)
-

Increase or decrease in pension fund prepayment leading to an increase (decrease) in tax
24
(33)

Adjustment in research and development tax credit leading to an increase (decrease) in the tax charge
(129)
(120)

Other differences leading to an increase (decrease) in the tax charge
(192)
208

Total tax charge for the year
31
-


Factors that may affect future tax charges

The company has tax losses of approximately £304,000 (2021 : £453,000) to carry forward for use against future trading profits.
The group has gross US losses of approximately £8,341,000 (2021 : £7,948,000) to carry forward for use against future US trading profits.
Following the successful claim for Research and Development Tax Credits, the directors expect that the effective rate of tax will be lower than the standard rate of tax in the future.

Page 31

 
KILFROST GROUP LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2022

12.


Tangible fixed assets

Group






Freehold property
Plant and machinery
Office equipment
Computer equipment
Total

£000
£000
£000
£000
£000



Cost 


At 1 April 2021
1,041
2,388
44
100
3,573


Additions
-
6
3
-
9


Disposals
-
(8)
-
-
(8)



At 31 March 2022

1,041
2,386
47
100
3,574



Depreciation


At 1 April 2021
337
2,257
36
100
2,730


Charge for the year on owned assets
21
57
5
-
83


Disposals
-
(8)
-
-
(8)



At 31 March 2022

358
2,306
41
100
2,805



Net book value



At 31 March 2022
683
80
6
-
769



At 31 March 2021
704
131
8
-
843

Page 32

 
KILFROST GROUP LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2022

13.


Fixed asset investments

Company





Investments in subsidiary companies

£000



Cost or valuation


At 1 April 2021
5,699



At 31 March 2022

5,699



Impairment


At 1 April 2021
5,623



At 31 March 2022

5,623



Net book value



At 31 March 2022
76



At 31 March 2021
76


Subsidiary undertakings


The following were subsidiary undertakings of the Company:

Name

Registered office

Principal activity

Class of shares

Holding

Kilfrost Limited
Albion Works, Haltwhistle, Northumberland, NE49 0HJ
Manufacture and distribution of de/anti-icing and speciality fluids
Ordinary
100%
Kilfrost Holdings Inc.
As above
Holding company
Ordinary
100%
Kilfrost Inc. *
As above
Manufacture and distribution of speciality fluids
Ordinary
100%

*  held by Kilfrost Holdings Inc.

Page 33

 
KILFROST GROUP LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2022

14.


Stocks

Group
Group
2022
2021
£000
£000

Raw materials and consumables
2,439
1,624

Finished goods and goods for resale
1,017
316

3,456
1,940



15.


Debtors

Group
Group
Company
Company
2022
2021
2022
2021
£000
£000
£000
£000


Trade debtors excluding factored debts
(2)
59
-
-

Factored debts
2,206
2,582
-
-

Amounts owed by group undertakings
-
-
2,500
-

Other debtors
155
3
-
-

Prepayments and accrued income
181
236
-
3

2,540
2,880
2,500
3


Proceeds of factored debts and stock financing was secured at the year end by way of a fixed and floating charge over certain of the Group's assets. 


16.


Cash and cash equivalents

Group
Group
2022
2021
£000
£000

Cash at bank and in hand
1,784
1,410

1,784
1,410


Page 34

 
KILFROST GROUP LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2022

17.


Creditors: Amounts falling due within one year

Group
Group
Company
Company
2022
2021
2022
2021
£000
£000
£000
£000

Other loans
500
651
-
151

Trade creditors
1,077
1,092
-
-

Other taxation and social security
317
302
-
-

Other creditors
86
20
-
-

Accruals and deferred income
306
350
4
9

2,286
2,415
4
160


Disclosure of the terms and conditions attached to the non-equity shares is made in note 21.

The shareholder loans are unsecured, interest free and are contractually repayable on demand. The shareholder loans are included in other loans.
Proceeds of factored debts and stock financing was secured at the year end by way of a fixed and floating charge over certain of the Group's assets. 


18.


Creditors: Amounts falling due after more than one year

Group
Group
Company
Company
2022
2021
2022
2021
£000
£000
£000
£000

Redeemable preference shares
2
2
2
2

Redeemable preference shares
998
998
998
998

1,000
1,000
1,000
1,000


Disclosure of the terms and conditions attached to the non-equity shares is made in note 21.



Page 35

 
KILFROST GROUP LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2022

19.


Financial instruments

Group
Group
Company
Company
2022
2021
2022
2021
£000
£000
£000
£000

Financial assets

Financial assets that are debt instruments measured at amortised cost
2,359
2,641
2,500
-


Financial liabilities

Financial liabilities measured at amortised cost
(1,864)
(2,088)
(5)
(160)


Financial assets measured at amortised cost comprise cash at bank and in hand, trade debtors, amounts owed by group undertakings and other debtors.


Financial liabilities measured at amortised cost comprise shareholder loans, trade creditors, amounts owed to group undertakings, certain other creditors and accruals and deferred income.


20.


Deferred taxation


Group



2022


£000






Charged to profit or loss
(30)



At end of year
(30)

Group
2022
£000

Accelerated capital allowances
(156)

Tax losses carried forward
3

Pension deficit
123

(30)

Page 36

 
KILFROST GROUP LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2022

21.


Share capital

2022
2021
£000
£000
Shares classified as equity

Authorised, allotted, called up and fully paid



72,280 (2021 - 72,280) Ordinary shares of £1.00 each
72
72

2022
2021
£000
£000
Shares classified as debt

Authorised, allotted, called up and fully paid



2,000 (2021 - 2,000) 2% Redeemable preference shares of £1.00 each
2
2


On 9 June 2014, 3,000 ordinary shares with aggregate nominal value of £3,000, were allotted for cash at £473.12 each with the resulting share premium being recognised of £1,416,361.
On 20 May 2014, 2,000 2% redeemable preference shares with aggregate nominal value of £2,000 were issued to the Stuart Halbert Foundation at £500 each. They are redeemable at the earlier of the Company's discretion or after 5 years at £500 per share.
The preference shares carry a discretionary dividend of 2% per annum, payable annually in arrears.








Page 37

 
KILFROST GROUP LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2022

22.


Reserves

Share premium account

This reserve records the amount above the nominal value received for shares sold, less transaction costs.

Capital redemption reserve

This reserve records the nominal value of shares repurchased by the Company.

Other reserves

This reserve records the total value of capital reserves.
Capital contribution
This reserve records the total value of capital contributions made by the shareholders of the Company.
 

Merger Reserve

This reserve records the total value of the difference between consideration (if any) and nominal value of the shares issued during merger or demerger and the fair value of the assets transferred.

Profit and loss account

This reserve includes all current and prior period retained profits and losses and net of distributions to shareholders.

Page 38

 
KILFROST GROUP LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2022

23.


Pension commitments

The Group operates a Defined Benefit Pension Scheme.

The Group operates a defined benefit scheme in the UK which is now closed to future accrual and new entrants. The last full actuarial valuation of this scheme was carried out by a qualified independent actuary on 31 July 2019. The calculations below are based on the actuarial valuation as at 31 July 2019 and allowing for movements to 31 March 2022.
During the year, £146,000 was paid by the employer as agreed deficit funding (2021 : £143,000). Management estimate that contributions to the scheme going forwards will total £146,000 per annum. This is the recommended level of deficit funding provided in the latest actuarial valuation.
The directors acknowledge their responsibilities for ensuring that actuarial assumptions are suitably updated to reflect changing economic conditions and they confirm that the assumptions at 31 March 2022 have been carefully reviewed with the actuary.
The pension scheme has not invested in the Company itself.



Reconciliation of present value of plan liabilities:


2022
2021
£000
£000

Reconciliation of present value of plan liabilities


At the beginning of the year
1,544
1,348

Interest cost
34
31

Actuarial (gains) / losses
(152)
123

Losses due to benefit changes
-
42

At the end of the year
1,426
1,544



Reconciliation of present value of plan assets:


2022
2021
£000
£000


At the beginning of the year
795
646

Interest income
19
16

Actuarial losses
(27)
(10)

Contributions
146
143

At the end of the year
933
795

Page 39

 
KILFROST GROUP LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2022
 
23.Pension commitments (continued)


Composition of plan assets:


2022
2021
£000
£000


Bonds
29
37

Cash
833
687

Diversified growth including global absolute return fund
71
71

Total plan assets
933
795

2022
2021
£000
£000


Fair value of plan assets
933
795

Present value of plan liabilities
(1,426)
(1,544)

Net pension scheme liability
(493)
(749)


The amounts recognised in profit or loss are as follows:

2022
2021
£000
£000


Interest cost
15
15

Losses due to benefit changes
-
42

Total
15
57



The cumulative amount of actuarial gains and losses recognised in the Consolidated Statement of Comprehensive Income was £2,033,000 (2021 : £2,212,000).



The Group expects to contribute £146,000 to its Defined Benefit Pension Scheme in 2023.




Page 40

 
KILFROST GROUP LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2022
 
23.Pension commitments (continued)


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

2022
2021
%
%
Discount rate


2.8

2.2
 
Future salary increases


3.6

3.3
 
Future pension increases


2.9

2.6
 
Mortality rates



 
- for a male aged 65 now


21.1

21.1
 
- at 65 for a male aged 45 now


22.4

22.4
 
- for a female aged 65 now


22.9

22.8
 
- at 65 for a female member aged 45 now


24.4

24.3
 

In agreement with the directors the actuary has used long cohort mortality assumptions that are consistent with the PCMA00 and PCFA00 mortality tables and reflect a reasonable estimate of likely future experience. The directors will continue to monitor these assumptions as the long term trend is for mortality improvements which add to life expectancies and hence the value of the liabilities.



Amounts for the current and previous four periods are as follows:


Defined benefit pension schemes

2022
2021
2020
2019
2018
£000
£000
£000
£000
£000
Defined benefit obligation

(1,426)

(1,544)

(1,348)
 
(1,323)
 
(1,191)

Scheme assets

933

795

646
 
510
 
376

Surplus
(493)

(749)

(702)
 
(813)
 
(815)


Experience adjustments on scheme liabilities
6
13
(30)
(4)
(7)
Experience adjustments on scheme assets
(27)
(10)
(11)
(10)
(8)
(21)
3
(41)
(14)
(15)


Page 41

 
KILFROST GROUP LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2022

24.


Commitments under operating leases

At 31 March 2022 the Group and the Company had future minimum lease payments due under non-cancellable operating leases for each of the following periods:


Group
Group
2022
2021
£000
£000

Not later than 1 year
6
10

Later than 1 year and not later than 5 years
2
5

8
15

25.


Related party transactions

Included within other loans is £500,000 (2021 : £500,000) due to The Estate of Ms J Halbert, a shareholder in the company Kilfrost Group Limited. These amounts are unsecured, interest free and are contractually repayable on demand.
Key management personnel
All directors and certain senior employees who have authority and responsibility for planning, directing and controlling activities of the company are considered to be key management personnel. Total remuneration in respect of these individuals, including employer's national insurance, is £870,000 (2021 : £745,000).
During the year the company paid salary costs to one (2021 : one) relatives of the key management personnel totalling £122,000 (2021 : £121,000).


26.


Controlling party

In the opinion of the directors, no individual shareholder has outright control of the Company.

 
Page 42