Company registration number 01605457 (England and Wales)
LUPTON & PLACE LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2023
LUPTON & PLACE LIMITED
COMPANY INFORMATION
Directors
D A Gill
S P Gill
S P Wheeler
M E Howarth
M J Wilson
Secretary
D A Gill
Company number
01605457
Registered office
Norcastal Works
Athletic Street
Burnley
Lancashire
BB10 4LR
Auditor
Pierce C A Limited
Mentor House
Ainsworth Street
Blackburn
Lancashire
BB1 6AY
Business address
Norcastal Works
Athletic Street
Burnley
Lancashire
BB10 4LR
Bankers
HSBC Bank plc
Lancashire Commercial Centre
1 Forest Green
Caxton Road
Preston
Lancashire
PR2 9LJ
LUPTON & PLACE LIMITED
CONTENTS
Page
Strategic report
1 - 2
Directors' report
3
Directors' responsibilities statement
4
Independent auditor's report
5 - 7
Statement of comprehensive income
8
Balance sheet
9
Statement of changes in equity
10
Statement of cash flows
11
Notes to the financial statements
12 - 22
LUPTON & PLACE LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 31 MARCH 2023
- 1 -
The directors present the strategic report for the year ended 31 March 2023.
Principal risks and uncertainties
The company has a policy to identify the key business risks and are managed appropriately.
The company’s principal financial instruments comprise bank balances, trade debtors, trade creditors, finance leases and other bank loans. The main purpose of these instruments is to finance the business operations.
In respect of bank balances, the liquidity risk is managed by maintaining a balance between the continuity of funding and flexibility through the use of overdrafts at floating rates of interest.
Trade debtors are assisted through Invoice Financing and managed in respect of credit and cash flow risk by policies concerning the credit offered to customers and the regular monitoring of amounts outstanding for both time and credit limits.
Trade creditors liquidity risk is managed by ensuring sufficient funds are available to meet amounts due.
The business has obligations under finance leases and hire purchase contracts. The liquidity risk in respect of these contracts is managed by ensuring that there are sufficient funds to meet the payments.
The business is careful to keep its borrowing within comfortable gearing limits whilst maintaining its ability to invest in people and plant.
Performance and development during the year and key performance indicators
In common with most of the UK manufacturing industry, we continue to trade in a climate of rising costs, especially energy, insurance, and wages.
In cold statistics our overall turnover was increased from £10,511,539 to £13,712,073 (30.45%) with Profit before taxation increased to £517,457 from the previous post-covid deficit of £81,951.
Once again, the company have complied with all bank covenants during the year.
The significant additions to Plant & Machinery include a new Buhler Ecoline Pro 84 Diecasting Machine Cell, an Automatic Grinding Machine and Conveyor and several Robots and Machining Centres. An investment of £1.5M and again I must commend the support of our bankers HSBC in assisting the financing of these projects to guarantee the future success of the business.
The company continues its programme of Research and Development, with expenditure totalling £396,698 this financial year. The main targets for R&D being further Machining Automation in the Foundry, Machine Shop and Finishing Department to try and achieve the elimination of manual operations and increase overall efficiencies in areas of manufacturing lead times and a reduction in processing costs.
From April 1st 2023, we will be affected by changes to the Small and Medium Enterprise (SME) additional deduction rate as it will be reduced from 130% to 86%, with the SME payable credit also decreasing from 14.5% to 10%.
Nevertheless, improving productivity is the key performance indicator to making our company stronger and competitive and we will continue the strategy despite all the challenges ahead.
We have a vastly experienced team in place that is highly qualified in all aspects of cast metals technology, metallurgy, toolmaking, and machining.
LUPTON & PLACE LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
- 2 -
Results of the year and year end position
The Company can report a profit before taxation of £517,457 and with a Balance Sheet of tangible net worth of £3,660,277 we continue to show further improvements to provide the strong base for future development.
Our turnover this year increased by over 30% to reach unprecedented levels mainly due to the acquisition of new accounts who have come to our business with the certainty of a first-class service with competitive prices and more importantly the knowledge that we are here in the long term to provide their continuity of supplies.
I welcome my nephews Richard & Joseph Howarth to senior managerial positions in the business knowing that the future long-term succession and continuation of the company will thrive.
Looking forward
The directors continue to have a trading plan covering all aspects of the business, enabling commercial decisions to be made to generate more cash and profitability in the foreseeable future.
The uncertainties are of course the volatile energy market along with other continuing inflationary factors. The rising energy bills and bottlenecks in global supply chains are two of the reasons for such instability in the market today.
We continue to monitor the global situation regarding fluctuations in raw material costs and possible disruption to the general supply chain of goods and services.
Also, the insurance market as a whole is currently a hardening place and as a consequence, insurers have imposed rate increases, reduced covers and limits, and a multitude of other constraints which have impacted on our premium rates to the extent of a 50% increase.
Our actual results for the first 6 months of 2023/24 have exceeded all expectations with Sales and Profit above budget allowing the construction of a new Steel Portal Framed Building to further the expansion of the business and using the site to its optimum. This should be completed by Christmas 2023.
I have little doubt that we will further strengthen our business and position in the market place during the coming year and thereafter. Our continuing investment programme will further increase our capacity and our advantage over the vast majority of our competitors. Growth will continue to come as a result of the quality of service we offer, and I fully expect this year to exceed all previous records.
Quality remains first in our list of priorities, and we remain supremely confident of our ability to continue our growth both in volume and by way of profit which will in the main be ploughed back into the business.
Once again I give my sincere and unreserved thanks to all the staff of this company whose contributions in whatever role are fundamental to our growth and success. They do not appear on the Balance Sheet but are undoubtedly the company’s greatest asset.
D A Gill
Director
20 November 2023
LUPTON & PLACE LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 MARCH 2023
- 3 -
The directors present their annual report and financial statements for the year ended 31 March 2023.
Principal activities
The principal activity of the company continued to be that of engineers, machinists and diecasters of aluminium alloys.
Results and dividends
The results for the year are set out on page 8.
No ordinary dividends were paid. The directors do not recommend payment of a final dividend.
Directors
The directors who held office during the year and up to the date of signature of the financial statements were as follows:
D A Gill
S P Gill
S P Wheeler
M E Howarth
M J Wilson
Research and development
The company continued with its programme of Research & Development (R&D) with significant staffing costs being eligible for R&D Tax Relief for revenue expenditure. A detailed review of each individual has been carefully considered to ensure that they provided direct technical input into the qualifying projects.
The tax incentive is in place to encourage companies to invest in developing or improving products and processes whilst eliminating some of the financial risks involved.
Auditor
Pierce C A Limited were appointed as auditor to the company and in accordance with section 485 of the Companies Act 2006, a resolution proposing that they be re-appointed will be put at a General Meeting.
Statement of disclosure to auditor
So far as each person who was a director at the date of approving this report is aware, there is no relevant audit information of which the company’s auditor is unaware. Additionally, the directors individually have taken all the necessary steps that they ought to have taken as directors in order to make themselves aware of all relevant audit information and to establish that the company’s auditor is aware of that information.
Medium-sized companies exemption
This report has been prepared in accordance with the provisions applicable to companies entitled to the medium-sized companies exemption.
On behalf of the board
D A Gill
Director
20 November 2023
LUPTON & PLACE LIMITED
DIRECTORS' RESPONSIBILITIES STATEMENT
FOR THE YEAR ENDED 31 MARCH 2023
- 4 -
The directors are responsible for preparing the annual report and the financial statements in accordance with applicable law and regulations.
Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the company and of the profit or loss of the company for that period. In preparing these financial statements, the directors are required to:
select suitable accounting policies and then apply them consistently;
make judgements and accounting estimates that are reasonable and prudent;
prepare the financial statements on the going concern basis unless it is inappropriate to presume that the company will continue in business.
The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the company’s transactions and disclose with reasonable accuracy at any time the financial position of the company and enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
LUPTON & PLACE LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF LUPTON & PLACE LIMITED
- 5 -
Opinion
We have audited the financial statements of Lupton & Place Limited (the 'company') for the year ended 31 March 2023 which comprise the statement of comprehensive income, the balance sheet, the statement of changes in equity, the statement of cash flows and notes to the financial statements, including significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice).
In our opinion the financial statements:
give a true and fair view of the state of the company's affairs as at 31 March 2023 and of its profit for the year then ended;
have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and
have been prepared in accordance with the requirements of the Companies Act 2006.
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditor's responsibilities for the audit of the financial statements section of our report. We are independent of the company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC’s Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Conclusions relating to going concern
In auditing the financial statements, we have concluded that the directors' use of the going concern basis of accounting in the preparation of the financial statements is appropriate.
Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the company's ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.
Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.
The other information comprises the information included in the annual report other than the financial statements and our auditor's report thereon. The directors are responsible for the other information contained within the annual report. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the course of the audit, or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.
We have nothing to report in this regard.
Opinions on other matters prescribed by the Companies Act 2006
In our opinion, based on the work undertaken in the course of our audit:
the information given in the strategic report and the directors' report for the financial year for which the financial statements are prepared is consistent with the financial statements; and
the strategic report and the directors' report have been prepared in accordance with applicable legal requirements.
LUPTON & PLACE LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF LUPTON & PLACE LIMITED
- 6 -
Matters on which we are required to report by exception
In the light of the knowledge and understanding of the company and its environment obtained in the course of the audit, we have not identified material misstatements in the strategic report or the directors' report.
We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to report to you if, in our opinion:
adequate accounting records have not been kept, or returns adequate for our audit have not been received from branches not visited by us; or
the financial statements are not in agreement with the accounting records and returns; or
certain disclosures of remuneration specified by law are not made; or
we have not received all the information and explanations we require for our audit.
Responsibilities of directors
As explained more fully in the directors' responsibilities statement, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. In preparing the financial statements, the directors are responsible for assessing the company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the company or to cease operations, or have no realistic alternative but to do so.
Auditor's responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.
The extent to which our procedures are capable of detecting irregularities, including fraud, is detailed below.
In identifying and assessing risks of material misstatement in respect of irregularities we considered the following:
The nature of the industry and the company’s control environment.
Results of our enquiries of management.
The company’s procedures and controls on compliance with laws and regulations and the risks of fraud.
Discussions among the audit engagement team concerning potential indicators of fraud.
We are also required to perform specific procedures to respond to the risk of management override.
As a result of our audit procedures we did not identify a material risk of fraud.
A further description of our responsibilities is available on the Financial Reporting Council’s website at: https://www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor's report.
LUPTON & PLACE LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF LUPTON & PLACE LIMITED
- 7 -
This report is made solely to the company's members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the company's members those matters we are required to state to them in an auditor's report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company's members as a body, for our audit work, for this report, or for the opinions we have formed.
James King (Senior Statutory Auditor)
For and on behalf of Pierce C A Limited
20 November 2023
Statutory Auditor
Mentor House
Ainsworth Street
Blackburn
Lancashire
BB1 6AY
LUPTON & PLACE LIMITED
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 MARCH 2023
- 8 -
2023
2022
Notes
£
£
Turnover
3
13,712,073
10,511,539
Cost of sales
(9,705,725)
(7,459,071)
Gross profit
4,006,348
3,052,468
Administrative expenses
(3,292,386)
(3,025,042)
Operating profit
4
713,962
27,426
Interest payable and similar expenses
7
(196,505)
(109,377)
Profit/(loss) before taxation
517,457
(81,951)
Tax on profit/(loss)
8
8,631
882
Profit/(loss) for the financial year
526,088
(81,069)
The profit and loss account has been prepared on the basis that all operations are continuing operations.
LUPTON & PLACE LIMITED
BALANCE SHEET
AS AT
31 MARCH 2023
31 March 2023
- 9 -
2023
2022
Notes
£
£
£
£
Fixed assets
Tangible assets
9
5,455,644
4,547,732
Current assets
Stocks
11
1,749,680
1,540,966
Debtors
10
2,664,801
2,441,094
4,414,481
3,982,060
Creditors: amounts falling due within one year
12
(4,504,448)
(4,391,671)
Net current liabilities
(89,967)
(409,611)
Total assets less current liabilities
5,365,677
4,138,121
Creditors: amounts falling due after more than one year
13
(1,078,880)
(501,080)
Provisions for liabilities
Deferred tax liability
15
626,520
502,852
(626,520)
(502,852)
Net assets
3,660,277
3,134,189
Capital and reserves
Called up share capital
17
253,128
253,128
Revaluation reserve
534,846
534,846
Capital redemption reserve
46,872
46,872
Profit and loss reserves
2,825,431
2,299,343
Total equity
3,660,277
3,134,189
These financial statements have been prepared in accordance with the provisions relating to medium-sized companies.true
The financial statements were approved by the board of directors and authorised for issue on 20 November 2023 and are signed on its behalf by:
D A Gill
Director
Company registration number 01605457 (England and Wales)
LUPTON & PLACE LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 MARCH 2023
- 10 -
Share capital
Revaluation reserve
Capital redemption reserve
Profit and loss reserves
Total
£
£
£
£
£
Balance at 1 April 2021
253,128
534,846
46,872
2,380,412
3,215,258
Year ended 31 March 2022:
Loss and total comprehensive income
-
-
-
(81,069)
(81,069)
Balance at 31 March 2022
253,128
534,846
46,872
2,299,343
3,134,189
Year ended 31 March 2023:
Profit and total comprehensive income
-
-
-
526,088
526,088
Balance at 31 March 2023
253,128
534,846
46,872
2,825,431
3,660,277
LUPTON & PLACE LIMITED
STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 MARCH 2023
- 11 -
2023
2022
Notes
£
£
£
£
Cash flows from operating activities
Cash generated from operations
21
775,959
242,375
Interest paid
(196,505)
(109,377)
Income taxes refunded
102,370
143,137
Net cash inflow from operating activities
681,824
276,135
Investing activities
Purchase of tangible fixed assets
(243,105)
(201,778)
Net cash used in investing activities
(243,105)
(201,778)
Financing activities
Receipt/(repayment) of bank loans
(100,000)
(115,600)
Payment of finance leases obligations
(454,577)
(255,485)
Net cash used in financing activities
(554,577)
(371,085)
Net decrease in cash and cash equivalents
(115,858)
(296,728)
Cash and cash equivalents at beginning of year
(1,587,261)
(1,290,533)
Cash and cash equivalents at end of year
(1,703,119)
(1,587,261)
Relating to:
Bank overdrafts included in creditors payable within one year
(1,703,119)
(1,587,261)
LUPTON & PLACE LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2023
- 12 -
1
Accounting policies
Company information
Lupton & Place Limited is a private company limited by shares incorporated in England and Wales. The registered office is Norcastal Works, Athletic Street, Burnley, Lancashire, BB10 4LR.
1.1
Accounting convention
These financial statements have been prepared in accordance with FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” (“FRS 102”) and the requirements of the Companies Act 2006.
The financial statements are prepared in sterling, which is the functional currency of the company. Monetary amounts in these financial statements are rounded to the nearest £.
The financial statements have been prepared under the historical cost convention, modified to include the revaluation of freehold properties. The principal accounting policies adopted are set out below.
1.2
Going concern
The company finances its operations by means of a bank overdraft facility and invoice finance facility. The directors are not aware of any reason why these facilities will not be maintained at their current levels. As a result the directors have continued to adopt the going concern basis in preparing the financial statements.true
1.3
Turnover
Turnover represents the amounts (excluding VAT) derived from the provision of diecasting products and services to third party customers during the year. All turnover arises in the United Kingdom.
1.4
Tangible fixed assets
Tangible fixed assets are initially measured at cost and subsequently measured at cost or valuation, net of depreciation.
Depreciation is recognised so as to write off the cost or valuation of assets less their residual values over their useful lives on the following bases:
Freehold land and buildings
2% per annum
Plant and equipment
5% / 10% / 25% per annum
Motor vehicles
25% per annum
No depreciation is provided on freehold land.
The gain or loss arising on the disposal of an asset is determined as the difference between the sale proceeds and the carrying value of the asset, and is credited or charged to profit or loss.
1.5
Stocks
Stocks are stated at the lower of cost and estimated selling price less costs to complete and sell. Cost comprises direct materials, direct labour costs and those overheads that have been incurred in bringing the stocks to their present location and condition.
1.6
Cash at bank and in hand
Cash and cash equivalents are basic financial assets and include cash in hand, deposits held at call with banks, other short-term liquid investments with original maturities of three months or less, and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities.
LUPTON & PLACE LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
1
Accounting policies
(Continued)
- 13 -
1.7
Financial instruments
The company has elected to apply the provisions of Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instruments Issues’ of FRS 102 to all of its financial instruments.
Financial instruments are recognised in the company's balance sheet when the company becomes party to the contractual provisions of the instrument.
Financial assets and liabilities are offset, with the net amounts presented in the financial statements, when there is a legally enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously.
Basic financial assets
Basic financial assets, which include debtors and cash and bank balances, are initially measured at transaction price including transaction costs and are subsequently carried at amortised cost using the effective interest method unless the arrangement constitutes a financing transaction, where the transaction is measured at the present value of the future receipts discounted at a market rate of interest. Financial assets classified as receivable within one year are not amortised.
Other financial assets
Other financial assets, including investments in equity instruments which are not subsidiaries, associates or joint ventures, are initially measured at fair value, which is normally the transaction price. Such assets are subsequently carried at fair value and the changes in fair value are recognised in profit or loss, except that investments in equity instruments that are not publicly traded and whose fair values cannot be measured reliably are measured at cost less impairment.
Impairment of financial assets
Financial assets, other than those held at fair value through profit and loss, are assessed for indicators of impairment at each reporting end date.
Financial assets are impaired where there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial asset, the estimated future cash flows have been affected. If an asset is impaired, the impairment loss is the difference between the carrying amount and the present value of the estimated cash flows discounted at the asset’s original effective interest rate. The impairment loss is recognised in profit or loss.
If there is a decrease in the impairment loss arising from an event occurring after the impairment was recognised, the impairment is reversed. The reversal is such that the current carrying amount does not exceed what the carrying amount would have been, had the impairment not previously been recognised. The impairment reversal is recognised in profit or loss.
Derecognition of financial assets
Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire or are settled, or when the company transfers the financial asset and substantially all the risks and rewards of ownership to another entity, or if some significant risks and rewards of ownership are retained but control of the asset has transferred to another party that is able to sell the asset in its entirety to an unrelated third party.
Classification of financial liabilities
Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the company after deducting all of its liabilities.
LUPTON & PLACE LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
1
Accounting policies
(Continued)
- 14 -
Basic financial liabilities
Basic financial liabilities, including creditors, bank loans, loans from fellow group companies and preference shares that are classified as debt, are initially recognised at transaction price unless the arrangement constitutes a financing transaction, where the debt instrument is measured at the present value of the future payments discounted at a market rate of interest. Financial liabilities classified as payable within one year are not amortised.
Debt instruments are subsequently carried at amortised cost, using the effective interest rate method.
Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Amounts payable are classified as current liabilities if payment is due within one year or less. If not, they are presented as non-current liabilities. Trade creditors are recognised initially at transaction price and subsequently measured at amortised cost using the effective interest method.
Other financial liabilities
Derivatives, including interest rate swaps and forward foreign exchange contracts, are not basic financial instruments. Derivatives are initially recognised at fair value on the date a derivative contract is entered into and are subsequently re-measured at their fair value. Changes in the fair value of derivatives are recognised in profit or loss in finance costs or finance income as appropriate, unless hedge accounting is applied and the hedge is a cash flow hedge.
Debt instruments that do not meet the conditions in FRS 102 paragraph 11.9 are subsequently measured at fair value through profit or loss. Debt instruments may be designated as being measured at fair value through profit or loss to eliminate or reduce an accounting mismatch or if the instruments are measured and their performance evaluated on a fair value basis in accordance with a documented risk management or investment strategy.
Derecognition of financial liabilities
Financial liabilities are derecognised when the company’s contractual obligations expire or are discharged or cancelled.
1.8
Equity instruments
Equity instruments issued by the company are recorded at the proceeds received, net of transaction costs. Dividends payable on equity instruments are recognised as liabilities once they are no longer at the discretion of the company.
1.9
Taxation
The tax expense represents the sum of the tax currently payable and deferred tax.
Current tax
The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the profit and loss account because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The company’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.
Deferred tax
Deferred tax liabilities are generally recognised for all timing differences and deferred tax assets are recognised to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits. Such assets and liabilities are not recognised if the timing difference arises from goodwill or from the initial recognition of other assets and liabilities in a transaction that affects neither the tax profit nor the accounting profit.
LUPTON & PLACE LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
1
Accounting policies
(Continued)
- 15 -
1.10
Employee benefits
The cost of any unused holiday entitlement is recognised in the period in which the employee’s services are received.
1.11
Retirement benefits
Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.
1.12
Leases
Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessees. All other leases are classified as operating leases.
Assets held under finance leases are recognised as assets at the lower of the assets fair value at the date of inception and the present value of the minimum lease payments. The related liability is included in the balance sheet as a finance lease obligation. Lease payments are treated as consisting of capital and interest elements. The interest is charged to profit or loss so as to produce a constant periodic rate of interest on the remaining balance of the liability.
2
Judgements and key sources of estimation uncertainty
In the application of the company’s accounting policies, the directors are required to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised where the revision affects only that period, or in the period of the revision and future periods where the revision affects both current and future periods.
Key sources of estimation uncertainty
The estimates and assumptions which have a significant risk of causing a material adjustment to the carrying amount of assets and liabilities are as follows.
Useful economic life and residual value of tangible fixed assets
Tangible fixed assets are valued at cost or valuation less accumulated depreciation. As such, the directors are required to make judgements on the useful economic life and residual value of tangible fixed assets in order to determine the depreciation rates.
3
Turnover
An analysis of the company's turnover is as follows:
2023
2022
£
£
Turnover analysed by class of business
Castings
12,712,557
9,735,382
Tooling
999,516
776,157
13,712,073
10,511,539
LUPTON & PLACE LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
- 16 -
4
Operating profit
2023
2022
Operating profit for the year is stated after charging:
£
£
Research and development costs
396,698
527,450
Fees payable to the company's auditor for the audit of the company's financial statements
12,750
10,000
Depreciation of owned tangible fixed assets
475,199
383,466
Depreciation of tangible fixed assets held under finance leases
89,001
153,954
5
Employees
The average monthly number of persons (including directors) employed by the company during the year was:
2023
2022
Number
Number
Production, sales and distribution
117
121
Administration
9
9
Total
126
130
Their aggregate remuneration comprised:
2023
2022
£
£
Wages and salaries
3,451,718
3,217,003
Social security costs
334,664
289,843
Pension costs
194,460
196,786
3,980,842
3,703,632
6
Directors' remuneration
2023
2022
£
£
Remuneration for qualifying services
530,941
457,218
Company pension contributions to defined contribution schemes
99,120
103,482
630,061
560,700
The number of directors for whom retirement benefits are accruing under defined contribution schemes amounted to 4 (2022 - 4).
LUPTON & PLACE LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
6
Directors' remuneration
(Continued)
- 17 -
Remuneration disclosed above include the following amounts paid to the highest paid director:
2023
2022
£
£
Remuneration for qualifying services
185,657
159,912
Company pension contributions to defined contribution schemes
36,000
48,000
7
Interest payable and similar expenses
2023
2022
£
£
Interest on financial liabilities measured at amortised cost:
Interest on bank overdrafts and loans
165,853
91,195
Other finance costs:
Interest on finance leases and hire purchase contracts
30,652
18,182
196,505
109,377
8
Taxation
2023
2022
£
£
Current tax
UK corporation tax on profits for the current period
(132,299)
(102,370)
Deferred tax
Origination and reversal of timing differences
123,668
101,488
Total tax credit
(8,631)
(882)
LUPTON & PLACE LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
8
Taxation
(Continued)
- 18 -
The actual credit for the year can be reconciled to the expected charge/(credit) for the year based on the profit or loss and the standard rate of tax as follows:
2023
2022
£
£
Profit/(loss) before taxation
517,457
(81,951)
Expected tax charge/(credit) based on the standard rate of corporation tax in the UK of 19.00% (2022: 19.00%)
98,317
(15,571)
Tax effect of expenses that are not deductible in determining taxable profit
1,929
1,736
Effect of change in corporation tax rate
126,746
Permanent capital allowances in excess of depreciation
(15,453)
(11,423)
Research and development tax credit
(93,424)
(102,370)
Taxation credit for the year
(8,631)
(882)
9
Tangible fixed assets
Freehold land and buildings
Plant and equipment
Motor vehicles
Total
£
£
£
£
Cost or valuation
At 1 April 2022
1,500,000
11,566,883
131,375
13,198,258
Additions
1,472,112
1,472,112
Disposals
(26,748)
(26,748)
At 31 March 2023
1,500,000
13,012,247
131,375
14,643,622
Depreciation and impairment
At 1 April 2022
24,000
8,504,526
122,000
8,650,526
Depreciation charged in the year
12,000
545,825
6,375
564,200
Eliminated in respect of disposals
(26,748)
(26,748)
At 31 March 2023
36,000
9,023,603
128,375
9,187,978
Carrying amount
At 31 March 2023
1,464,000
3,988,644
3,000
5,455,644
At 31 March 2022
1,476,000
3,062,357
9,375
4,547,732
The net carrying value of tangible fixed assets includes the following in respect of assets held under finance leases or hire purchase contracts.
2023
2022
£
£
Plant and equipment
1,607,802
1,291,096
LUPTON & PLACE LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
9
Tangible fixed assets
(Continued)
- 19 -
The company's land and buildings were revalued in October 2019 at open market value with vacant possession by Eckersley, Independent Chartered Surveyors. The surplus arising on revaluation is included in the revaluation reserve. The directors are of the opinion that the valuation performed in 2019 is not materially different to the fair value as at the balance sheet date.
If revalued assets were stated on an historical cost basis rather than a fair value basis, the total amounts included would have been as follows:
2023
2022
£
£
Cost
616,459
616,459
Accumulated depreciation
(260,792)
(248,463)
Carrying value
355,667
367,996
10
Debtors
2023
2022
Amounts falling due within one year:
£
£
Trade debtors
2,379,402
2,217,424
Corporation tax recoverable
132,299
102,370
Prepayments and accrued income
153,100
121,300
2,664,801
2,441,094
11
Stocks
2023
2022
£
£
Work in progress
1,607,492
1,367,374
Raw materials & consumables
142,188
173,592
1,749,680
1,540,966
LUPTON & PLACE LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
- 20 -
12
Creditors: amounts falling due within one year
2023
2022
Notes
£
£
Bank loans and overdrafts
1,803,119
1,687,261
Obligations under finance leases
14
317,750
221,120
Trade creditors
1,824,888
2,043,705
Taxation and social security
402,491
258,885
Accruals and deferred income
156,200
180,700
4,504,448
4,391,671
13
Creditors: amounts falling due after more than one year
2023
2022
Notes
£
£
Bank loans
225,000
325,000
Obligations under finance leases
14
853,880
176,080
1,078,880
501,080
The bank loans and overdrafts are secured by fixed and floating charges over the assets of the company.
The obligations under finance leases are secured against the assets to which they relate.
14
Finance lease obligations
2023
2022
Future minimum lease payments due under finance leases:
£
£
Within one year
317,750
221,120
In two to five years
853,880
176,080
1,171,630
397,200
15
Deferred taxation
The following are the major deferred tax liabilities and assets recognised by the company and movements thereon:
Liabilities
Liabilities
2023
2022
Balances:
£
£
Accelerated capital allowances
626,520
502,852
LUPTON & PLACE LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
15
Deferred taxation
(Continued)
- 21 -
2023
Movements in the year:
£
Liability at 1 April 2022
502,852
Charge to profit or loss
123,668
Liability at 31 March 2023
626,520
The deferred tax liability set out above is expected to reverse within the foreseeable future and relates to accelerated capital allowances that are expected to mature within the same period.
16
Retirement benefit schemes
2023
2022
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
194,460
196,786
The company operates a defined contribution pension scheme for all qualifying employees. The assets of the scheme are held separately from those of the company in an independently administered fund.
17
Share capital
2023
2022
£
£
Ordinary share capital
Issued and fully paid
253,128 Ordinary shares of £1 each
253,128
253,128
18
Operating lease commitments
At the reporting end date the company had outstanding commitments for future minimum lease payments under non-cancellable operating leases, which fall due as follows:
2023
2022
£
£
Within one year
75,219
88,891
Between two and five years
149,600
140,116
224,819
229,007
LUPTON & PLACE LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2023
- 22 -
19
Capital commitments
Amounts contracted for but not provided in the financial statements:
2023
2022
£
£
Acquisition of tangible fixed assets
-
227,161
20
Ultimate controlling party
The company is controlled by some of its directors by virtue of their shareholding in the company.
21
Cash generated from operations
2023
2022
£
£
Profit/(loss) for the year after tax
526,088
(81,069)
Adjustments for:
Taxation credited
(8,631)
(882)
Finance costs
196,505
109,377
Depreciation and impairment of tangible fixed assets
564,200
537,420
Movements in working capital:
Increase in stocks
(208,714)
(563,975)
Increase in debtors
(193,778)
(78,613)
(Decrease)/increase in creditors
(99,711)
320,117
Cash generated from operations
775,959
242,375
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