Company registration number 03387047 (England and Wales)
PRIMEX PLASTICS LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
PRIMEX PLASTICS LIMITED
COMPANY INFORMATION
Directors
Mr M J Cramer
Mr T R Schultz
Mr R E Houseman
Company number
03387047
Registered office
Unit G700
Beaumont Way
Aycliffe Industrial Park
Newton Aycliffe
DL5 6SN
Auditor
Azets Audit Services Limited
Triune Court
Monks Cross Drive
York
YO32 9GZ
Bankers
Wells Fargo Bank
London Branch
One Plantation Place
30 Fenchurch Street
London
EC3M 3BD
PRIMEX PLASTICS 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
PRIMEX PLASTICS LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
- 1 -
The directors present the strategic report for the year ended 31 December 2023.
Fair review of the business
The principal activity of the business is the extrusion of custom-made thermoplastic sheet for the thermoforming and fabrication industries in the UK, EU and wider European markets. Primex Plastics Limited is a UK subsidiary of Primex Plastics Corporation USA and operates out of one manufacturing plant in Newton Aycliffe, County Durham.
The 2023 results showed a profit before tax from operations of £2,286,288, an increase in profit of 58.1% versus 2022.
The directors of the business are very pleased with the overall performance in such a challenging year, especially in the latter part when demand in the market weakened considerably. The low demand stabilized raw material pricing despite continued volatility in oil and energy prices. Inflation remained stubbornly high putting pressure on all incoming products and services as well as pressure on employee pay. Overall, the business coped well with the rapidly changing market and trading conditions. The main objective for the business over the next 5 years is to continue to solidify the financial position of the business and to continue to expand into targeted ‘value add’ applications, new materials, and markets for both existing and new customers.
Sales volume increased significantly versus 2022 largely due to a one-off project which ended in October 2023. We plan to continue to expand our customer base in both the UK and Europe and continue to grow sales to new customers to help dilute our reliance on a small number of key customers for our volume.
Plant energy efficiency continued to improve through capital investments in 2023 reducing overall cost per tonne and improving overall equipment efficiency. Our 2023 carbon footprint was 334.3 CO2e/tonne versus 325.0kg CO2e/tonne in 2022 (excluding raw materials). There are 2 main reasons for the increase. 1) The average electricity generated during 2023 in the UK produced more kg CO2e / kWh (0.207074) than in 2022 (0.193380). This is equivalent to an increase of 10 kgCO2e/tonne and is obviously out of our control. 2) We exported 1,405 tonnes (30.7%) more volume in 2023 versus 2022 resulting in a higher average CO2e/tonne for freight versus 2022 (10.3kg CO2e/tonne 2023 versus 9.6kg CO2e/tonne 2022) due to the distances travelled versus domestic freight destinations. Our carbon footprint forms part of our ongoing key performance indicators. Capital investments will continue in 2024 and will reflect our strategy of continuously improving the energy efficiency and output of each machine.
We continued to focus on R&D and product development as we know our future success will be enhanced with a higher percentage of our sales in specialty products and targeted specialty markets.
Principal risks and uncertainties
Risk is reviewed on an annual basis by senior managers within the UK business.
Primex is exposed to the usual credit and cash flow risk associated with selling on credit and manages this through credit control procedures. Initial credit risk is reviewed by senior management using credit rating agencies as well as market intelligence. The business experienced negligible bad debts in the year which reinforces the strong credit risk management process currently used within the business.
Primex undertakes sales and purchases in foreign currencies; primarily Euro; which gives exposure to foreign currency exchange rate risk. Primex continues to increase its purchases of raw material in Euro currency to help offset exchange rate variances. The improved cash position has allowed for a more flexible approach on the timing of exchange transactions, which also helps mitigate some of the risk.
During 2023, Primex continued to diversify its customer base to lessen short to medium term risk.
Continued conflict in the Middle East and Ukraine could affect supply chains, however our policy of multiple vendors for each raw material will lessen this risk.
The main risks to the Primex short term strategy continues to be the overall geopolitical and economic environment (e.g. effect of the Ukraine crisis, conflict in the Middle East, inflation, and overall business climate) and its potential effect on major customer programs, global energy prices, and raw material price and availability.
PRIMEX PLASTICS LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 2 -
Key performance indicators
The business uses a range of KPI’s to measure the monthly performance of the operation. The key areas are as follows with prior year comparisons included.
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Carbon footprint (Operations excl. raw materials) | | |
These indicators give a good overall picture for the performance of the business. They are reviewed on a monthly basis by senior managers within the UK business and the parent company in the USA. On an annual basis the business reviews the table of KPI’s and decides if each KPI is still relevant to the ongoing performance or if additional or replacement KPI’s are needed.
Mr M J Cramer
Director
8 April 2024
PRIMEX PLASTICS LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
- 3 -
The directors present their annual report and financial statements for the year ended 31 December 2023.
Principal activities
The principal activity of the company is the manufacture of thermoplastic sheet products.
Results and dividends
The results for the year are set out on page 8.
The directors do not recommend payment of a dividend.
It is proposed that the profit of £2,286,288 be transferred to reserves.
Directors
The directors who held office during the year and up to the date of signature of the financial statements were as follows:
Mr M J Cramer
Mr T R Schultz
Mr R E Houseman
Future developments
The business plans to invest in plant, machinery and expertise where opportunities or market developments dictate. Sales are expected to reduce in 2024 compared to 2023 due to one-off projects that ended towards the end of 2023. Plant efficiency and output continues to be extremely important to ensure we can service sales in a cost-effective and efficient way.
We plan to continue developing targeted sales growth of ‘value add’ products with higher margin with a view to maximising our plant capacity and to protect us from competitors.
Primex will strive to develop targeted new products as and when customers or markets demand in order to enhance and widen our product offering.
Auditor
The auditor, Azets Audit Services Limited, is deemed to be reappointed under section 487(2) of the Companies Act 2006.
Statement of disclosure to auditor
So far as each person who was a director at the date of approving this report is aware, there is no relevant audit information of which the company’s auditor is unaware. Additionally, the directors individually have taken 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.
On behalf of the board
Mr M J Cramer
Director
8 April 2024
PRIMEX PLASTICS LIMITED
DIRECTORS' RESPONSIBILITIES STATEMENT
FOR THE YEAR ENDED 31 DECEMBER 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.
PRIMEX PLASTICS LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBER OF PRIMEX PLASTICS LIMITED
- 5 -
Opinion
We have audited the financial statements of Primex Plastics Limited (the 'company') for the year ended 31 December 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 December 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.
PRIMEX PLASTICS LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBER OF PRIMEX PLASTICS LIMITED
- 6 -
Matters on which we are required to report by exception
In the light of the knowledge and understanding of the company and its environment obtained in the course of the audit, we have not identified material misstatements in the strategic report or the directors' report.
We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to report to you if, in our opinion:
adequate accounting records have not been kept, or returns adequate for our audit have not been received from branches not visited by us; or
the financial statements are not in agreement with the accounting records and returns; or
certain disclosures of remuneration specified by law are not made; or
we have not received all the information and explanations we require for our audit.
Responsibilities of directors
As explained more fully in the directors' responsibilities statement, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. In preparing the financial statements, the directors are responsible for assessing the company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the company or to cease operations, or have no realistic alternative but to do so.
Auditor's responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.
A further description of our responsibilities is available on the Financial Reporting Council’s website at: https://www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor's report.
PRIMEX PLASTICS LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBER OF PRIMEX PLASTICS LIMITED
- 7 -
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 and on the Financial Reporting Council’s website, to detect material misstatements in respect of irregularities, including fraud.
We obtain and update our understanding of the entity, its activities, its control environment, and likely future developments, including in relation to the legal and regulatory framework applicable and how the entity is complying with that framework. Based on this understanding, we identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. This includes consideration of the risk of acts by the entity that were contrary to applicable laws and regulations, including fraud.
In response to the risk of irregularities and non-compliance with laws and regulations, including fraud, we designed procedures which included:
Enquiry of management and those charged with governance around actual and potential litigation and claims as well as actual, suspected and alleged fraud;
Reviewing minutes of meetings of those charged with governance;
Assessing the extent of compliance with the laws and regulations considered to have a direct material effect on the financial statements or the operations of the company through enquiry and inspection;
Reviewing financial statement disclosures and testing to supporting documentation to assess compliance with applicable laws and regulations;
Performing audit work over the risk of management bias and override of controls, including testing of journal entries and other adjustments for appropriateness, evaluating the business rationale of significant transactions outside the normal course of business and reviewing accounting estimates for indicators of potential bias; and
Performing audit work over the timing and recognition of revenue and in particular whether it has been recorded in the correct accounting period.
Because of the inherent limitations of an audit, there is a risk that we will not detect all irregularities, including those leading to a material misstatement in the financial statements or non-compliance with regulation. This risk increases the more that compliance with a law or regulation is removed from the events and transactions reflected in the financial statements, as we will be less likely to become aware of instances of non-compliance. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
Use of our report
This report is made solely to the company's member in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the company's member those matters we are required to state to the member in an auditor's report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company's member, for our audit work, for this report, or for the opinions we have formed.
Martin Davey (Senior Statutory Auditor)
For and on behalf of Azets Audit Services Limited
10 April 2024
Chartered Accountants
Statutory Auditor
Triune Court
Monks Cross Drive
York
YO32 9GZ
PRIMEX PLASTICS LIMITED
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2023
- 8 -
2023
2022
Notes
£
£
Turnover
3
17,462,600
16,772,753
Cost of sales
(13,415,167)
(13,753,114)
Gross profit
4,047,433
3,019,639
Distribution costs
(800,367)
(772,349)
Administrative expenses
(1,082,319)
(837,775)
Other operating income
26,915
32,324
Operating profit
4
2,191,662
1,441,839
Interest receivable and similar income
94,626
5,899
Interest payable and similar expenses
(1,493)
Profit before taxation
2,286,288
1,446,245
Taxation
6
(220,000)
340,000
Profit and total comprehensive income for the financial year
2,066,288
1,786,245
The statement of comprehensive income has been prepared on the basis that all operations are continuing operations.
PRIMEX PLASTICS LIMITED
BALANCE SHEET
AS AT 31 DECEMBER 2023
31 December 2023
- 9 -
2023
2022
Notes
£
£
£
£
Fixed assets
Tangible assets
7
2,035,674
1,729,458
Current assets
Stocks
8
2,419,318
2,545,169
Debtors
9
2,968,004
3,738,857
Cash at bank and in hand
4,441,771
1,967,681
9,829,093
8,251,707
Creditors: amounts falling due within one year
10
(2,394,574)
(2,577,260)
Net current assets
7,434,519
5,674,447
Net assets
9,470,193
7,403,905
Capital and reserves
Called up share capital
13
12,950,000
12,950,000
Profit and loss reserves
(3,479,807)
(5,546,095)
Total equity
9,470,193
7,403,905
The financial statements were approved by the board of directors and authorised for issue on 8 April 2024 and are signed on its behalf by:
Mr M J Cramer
Director
Company Registration No. 03387047
PRIMEX PLASTICS LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2023
- 10 -
Share capital
Profit and loss reserves
Total
£
£
£
Balance at 1 January 2022
12,950,000
(7,332,340)
5,617,660
Year ended 31 December 2022:
Profit and total comprehensive income for the year
-
1,786,245
1,786,245
Balance at 31 December 2022
12,950,000
(5,546,095)
7,403,905
Year ended 31 December 2023:
Profit and total comprehensive income for the year
-
2,066,288
2,066,288
Balance at 31 December 2023
12,950,000
(3,479,807)
9,470,193
PRIMEX PLASTICS LIMITED
STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 DECEMBER 2023
- 11 -
2023
2022
Notes
£
£
£
£
Cash flows from operating activities
Cash generated from operations
17
3,027,136
748,666
Interest paid
(1,493)
Net cash inflow from operating activities
3,027,136
747,173
Investing activities
Purchase of tangible fixed assets
(650,672)
(450,346)
Proceeds from disposal of tangible fixed assets
3,000
Interest received
94,626
5,899
Net cash used in investing activities
(553,046)
(444,447)
Net increase in cash and cash equivalents
2,474,090
302,726
Cash and cash equivalents at beginning of year
1,967,681
1,664,955
Cash and cash equivalents at end of year
4,441,771
1,967,681
PRIMEX PLASTICS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
- 12 -
1
Accounting policies
Company information
Primex Plastics Limited is a company limited by shares incorporated in England and Wales. The registered office is Unit G700, Beaumont Way, Aycliffe Industrial Park, Newton Aycliffe, DL5 6SN.
1.1
Accounting convention
These financial statements have been prepared in accordance with 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 £1.
The financial statements have been prepared on the historical cost convention, modified to include certain financial instruments at fair value. The principal accounting policies adopted are set out below.
The company has taken advantage of the disclosure exemptions of Section 33.1A of FRS102 which permit it to not present details of its transactions with members of the group headed by ICC Industries Inc. where relevant group companies are all wholly owned.
The immediate parent company is Primex Plastics Corporation, a company registered in the United States of America. The ultimate parent company with voting rights is ICC Industries Inc. the registered office of which is 725 Fifth Avenue, 14th Floor, New York, NY 10022, USA.
1.2
Going concern
On the basis of the profitability in 2023, the cash position as at 31 December 2023 andtrue budgets for the forthcoming twelve months, the directors have determined that the company is a going concern and has the ability to meet its liabilities as they fall due. They therefore believe it is appropriate to prepare the financial statements on a going concern basis.
1.3
Turnover
Turnover is recognised at the fair value of the consideration received or receivable for goods provided in the normal course of business, and is shown net of VAT and other sales related taxes. The fair value of consideration takes into account trade discounts, settlement discounts and volume rebates.
Revenue from the sale of goods is recognised when the significant risks and rewards of ownership of the goods have passed to the buyer (usually on dispatch of the goods), the amount of revenue can be measured reliably, it is probable that the economic benefits associated with the transaction will flow to the entity and the costs incurred or to be incurred in respect of the transaction can be measured reliably.
1.4
Research and development expenditure
Research expenditure is written off against profits in the year in which it is incurred. Identifiable development expenditure is capitalised to the extent that the technical, commercial and financial feasibility can be demonstrated.
1.5
Tangible fixed assets
Tangible fixed assets are initially measured at cost and subsequently measured at cost or valuation, net of depreciation and any impairment losses.
PRIMEX PLASTICS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 13 -
Tangible fixed assets are stated at cost less depreciation, where cost includes attributable interest and labour costs incurred during the commissioning period of production lines. Depreciation is provided at rates calculated to write off the cost less estimated residual value of each asset over its expected useful life, as follows:
Short term leasehold improvements
Over the remaining term of the lease
Plant and machinery
Between 1 and 22 years straight line
Fixtures, fittings and equipment
Between 1 and 8 years straight line
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.
1.6
Impairment of fixed assets
At each reporting period end date, the company reviews the carrying amounts of its tangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any).
If the recoverable amount of an asset is estimated to be less than its carrying amount, the carrying amount of the asset is reduced to its recoverable amount. An impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the impairment loss is treated as a revaluation decrease.
Recognised impairment losses are reversed if, and only if, the reasons for the impairment loss have ceased to apply. Where an impairment loss subsequently reverses, the carrying amount of the asset (or cash-generating unit) is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset (or cash-generating unit) in prior years. A reversal of an impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the reversal of the impairment loss is treated as a revaluation increase.
1.7
Stocks
Stocks are stated at the lower of cost and estimated selling price less costs to complete and sell. Cost comprises direct materials and, where applicable, direct labour costs and those overheads that have been incurred in bringing the stocks to their present location and condition.
At each reporting date, an assessment is made for impairment. Any excess of the carrying amount of stocks over its estimated selling price less costs to complete and sell is recognised as an impairment loss in profit or loss. Reversals of impairment losses are also recognised in profit or loss.
1.8
Cash and cash equivalents
Cash and cash equivalents include cash in hand, deposits held at call with banks and other short-term liquid investments with original maturities of three months or less. Bank overdrafts are shown within borrowings in creditors.
PRIMEX PLASTICS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 14 -
1.9
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.
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.
PRIMEX PLASTICS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 15 -
Basic financial liabilities
Basic financial liabilities, including creditors, bank loans and loans from fellow group companies, 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 all short term and are recognised initially at transaction price.
Derecognition of financial liabilities
Financial liabilities are derecognised when the company’s contractual obligations expire or are discharged or cancelled.
1.10
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.
1.11
Taxation
The tax expense represents the sum of the tax currently payable and deferred tax.
Current tax
The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the profit and loss account because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The company’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.
Deferred tax
Deferred tax liabilities are generally recognised for all timing differences and deferred tax assets are recognised to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits. Such assets and liabilities are not recognised if the timing difference arises from goodwill or from the initial recognition of other assets and liabilities in a transaction that affects neither the tax profit nor the accounting profit.
The carrying amount of deferred tax assets is reviewed at each reporting end date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realised. Deferred tax is charged or credited in the profit and loss account, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity. Deferred tax assets and liabilities are offset when the company has a legally enforceable right to offset current tax assets and liabilities and the deferred tax assets and liabilities relate to taxes levied by the same tax authority.
PRIMEX PLASTICS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 16 -
1.12
Employee benefits
The costs of short-term employee benefits are recognised as a liability and an expense, unless those costs are required to be recognised as part of the cost of stock or fixed assets.
The cost of any unused holiday entitlement is recognised in the period in which the employee’s services are received.
Termination benefits are recognised immediately as an expense when the company is demonstrably committed to terminate the employment of an employee or to provide termination benefits.
1.13
Retirement benefits
Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.
1.14
Leases
Rentals payable under operating leases, including any lease incentives received, are charged to profit or loss on a straight line basis over the term of the relevant lease except where another more systematic basis is more representative of the time pattern in which economic benefits from the leases asset are consumed.
1.15
Government grants
Grants are credited to deferred revenue. Grants towards revenue expenditure are released to the profit and loss account as the related expenditure is incurred. Grants towards capital expenditure are released to the profit and loss account over the expected useful life of the assets to which they relate.
Where the company receives research and development expenditure credits (“RDEC”) it accounts for these as government grant income within operating income as it more closely aligns with grant income as opposed to a taxation credit.
1.16
Foreign exchange
Transactions in currencies other than pounds sterling are recorded at the rates of exchange prevailing at the dates of the transactions. At each reporting end date, monetary assets and liabilities that are denominated in foreign currencies are retranslated at the rates prevailing on the reporting end date. Gains and losses arising on translation in the period are included in profit or loss.
PRIMEX PLASTICS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 17 -
2
Critical accounting estimates and judgements
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, if the revision affects only that period, or in the period of the revision and future periods if the revision affects both current and future periods.
The estimates and assumptions which have a significant risk of causing a material adjustment to the carrying amount of assets and liabilities are outlined below.
Critical estimates
The following judgements (apart from those involving estimates) have had the most significant effect on amounts recognised in the financial statements.
Stock
Stocks are valued at the lower of cost and estimated selling price less costs to complete and sell, as noted in accounting policy 1.7.
The company converts raw materials to finished goods. Stock values include any costs such as labour and overheads attributable to generating finished goods, as management believe this is the most suitable costing method to take into account the matching concept of accounting.
Depreciation
The depreciation policy has been set according to management's experience of the useful lives of a typical asset in each category, something which is reviewed annually. It is not considered practical to use a per unit basis to allocate depreciation without undue cost and therefore amounts are charged annually. The depreciation charged during the year was £344,456 (2022 - £311,367) which the directors feel is a fair reflection of the benefits derived from the consumption of the tangible fixed assets in use during the period.
Bad debt provision
Outstanding trade debtor balances are reviewed on a line by line basis by management to identify possible amounts where a provision is required. Management closely manage the collection of trade debtors and are therefore able to identify balances where there is uncertainty about its recoverability, and determine what provision is required (if any).
3
Turnover and other revenue
An analysis of the company's turnover is as follows:
2023
2022
£
£
Turnover analysed by class of business
Thermoplastic sheet products
17,462,600
16,772,753
PRIMEX PLASTICS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
3
Turnover and other revenue
(Continued)
- 18 -
2023
2022
£
£
Turnover analysed by geographical market
United Kingdom
5,250,819
6,746,091
Rest of Europe
12,022,604
9,917,934
Rest of the World
189,177
108,728
17,462,600
16,772,753
4
Operating profit
2023
2022
Operating profit for the year is stated after charging/(crediting):
£
£
Exchange losses/(gains)
32,588
(61,247)
Government grants
(26,915)
(32,324)
Fees payable to the company's auditor for the audit of the company's financial statements
11,700
10,950
Depreciation of owned tangible fixed assets
344,456
311,367
Profit on disposal of tangible fixed assets
(3,000)
-
Operating lease charges
195,254
177,241
5
Employees
The average monthly number of persons employed by the company during the year was:
2023
2022
Number
Number
Production
52
49
Selling and distribution
3
3
Administration
5
5
Directors
3
3
Total
63
60
Their aggregate remuneration comprised:
2023
2022
£
£
Wages and salaries
2,547,260
2,354,107
Social security costs
257,937
238,985
Pension costs
88,574
79,729
2,893,771
2,672,821
PRIMEX PLASTICS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 19 -
6
Taxation
2023
2022
£
£
Deferred tax
Origination and reversal of timing differences
220,000
(340,000)
The actual charge/(credit) for the year can be reconciled to the expected charge for the year based on the profit or loss and the standard rate of tax as follows:
2023
2022
£
£
Profit before taxation
2,286,288
1,446,245
Expected tax charge based on the standard rate of corporation tax in the UK of 23.50% (2022: 19.00%)
537,278
274,787
Tax effect of utilisation of tax losses not previously recognised
(317,278)
(614,787)
Taxation charge/(credit) for the year
220,000
(340,000)
The company has estimated losses of £2,800,000 (2022 - £5,000,000) available for carry forward against future trading profits.
7
Tangible fixed assets
Short term leasehold improvements
Plant and machinery
Fixtures, fittings and equipment
Total
£
£
£
£
Cost
At 1 January 2023
244,418
7,607,935
219,212
8,071,565
Additions
4,567
550,341
95,764
650,672
Disposals
(8,590)
(8,590)
At 31 December 2023
248,985
8,158,276
306,386
8,713,647
Depreciation and impairment
At 1 January 2023
237,679
5,960,983
143,445
6,342,107
Depreciation charged in the year
6,534
312,428
25,494
344,456
Eliminated in respect of disposals
(8,590)
(8,590)
At 31 December 2023
244,213
6,273,411
160,349
6,677,973
Carrying amount
At 31 December 2023
4,772
1,884,865
146,037
2,035,674
At 31 December 2022
6,739
1,646,952
75,767
1,729,458
PRIMEX PLASTICS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 20 -
8
Stocks
2023
2022
£
£
Raw materials and consumables
1,084,784
1,216,930
Work in progress
25,367
18,190
Finished goods and goods for resale
1,309,167
1,310,049
2,419,318
2,545,169
9
Debtors
2023
2022
Amounts falling due within one year:
£
£
Trade debtors
2,395,745
3,102,147
Other debtors
97,517
59,531
Prepayments and accrued income
184,742
67,179
2,678,004
3,228,857
Deferred tax asset (note 11)
290,000
510,000
2,968,004
3,738,857
10
Creditors: amounts falling due within one year
2023
2022
£
£
Trade creditors
1,530,614
1,830,106
Taxation and social security
49,506
45,309
Other creditors
6,724
6,143
Accruals and deferred income
807,730
695,702
2,394,574
2,577,260
11
Deferred taxation
Deferred tax assets and liabilities are offset where the company has a legally enforceable right to do so. The following is the analysis of the deferred tax balances (after offset) for financial reporting purposes:
Assets
Assets
2023
2022
Balances:
£
£
Tax losses
290,000
510,000
PRIMEX PLASTICS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
11
Deferred taxation
(Continued)
- 21 -
2023
Movements in the year:
£
Asset at 1 January 2023
(510,000)
Charge to profit or loss
220,000
Asset at 31 December 2023
(290,000)
12
Retirement benefit schemes
2023
2022
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
88,574
79,729
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.
13
Share capital
2023
2022
2023
2022
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary shares of £1 each
12,950,000
12,950,000
12,950,000
12,950,000
14
Operating lease commitments
Lessee
At the reporting end date the company had outstanding commitments for future minimum lease payments under non-cancellable operating leases, which fall due as follows:
2023
2022
£
£
Within one year
234,580
112,247
Between two and five years
854,155
58,957
1,088,735
171,204
15
Related party transactions
Remuneration of key management personnel
The remuneration of key management personnel, is as follows.
2023
2022
£
£
Aggregate compensation
451,740
413,893
PRIMEX PLASTICS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 22 -
16
Ultimate controlling party
The immediate parent company is Primex Plastics Corporation, a company registered in the United States of America. The ultimate parent company with voting rights is ICC Industries Inc. the registered office of which is 725 Fifth Avenue, 14th Floor, New York, NY 10022, USA.
The smallest group into which Primex Plastics Limited is consolidated is Primex Plastics Corporation. The largest group into which they are consolidated is ICC Industries Inc. the financial statements of which are not publicly available.
17
Cash generated from operations
2023
2022
£
£
Profit for the year after tax
2,066,288
1,786,245
Adjustments for:
Taxation charged/(credited)
220,000
(340,000)
Finance costs
1,493
Investment income
(94,626)
(5,899)
Gain on disposal of tangible fixed assets
(3,000)
-
Depreciation and impairment of tangible fixed assets
344,456
311,367
Movements in working capital:
Decrease/(increase) in stocks
125,851
(501,592)
Decrease/(increase) in debtors
550,853
(873,929)
(Decrease)/increase in creditors
(182,686)
370,981
Cash generated from operations
3,027,136
748,666
18
Analysis of changes in net funds
1 January 2023
Cash flows
31 December 2023
£
£
£
Cash at bank and in hand
1,967,681
2,474,090
4,441,771
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