Cabot G.B. Limited
Annual report and financial statements
for the year ended 30 September 2023
Registered Number 02169208
Cabot G.B. Limited
Contents
Page
Directors and advisors
1
Strategic report
2
Directors' report
4
Directors' responsibilities statement
6
Independent auditor's report
7
Profit and loss account
11
Statement of comprehensive income
12
Balance sheet
13
Statement of changes in equity
14
Notes to the financial statements
15
Cabot G.B. Limited
Directors and advisors
Directors
E Oezdemir
L Dumont
A Tucker
Secretary and registered office
A Tucker
Sully Moors Road
Sully
Penarth
CF64 5RP
United Kingdom
Auditor
Menzies LLP
5 The Crescent
Ashcombe House
Leatherhead
KT22 8DY
Solicitors
Eversheds LLP
Senator House
85 Queen Victoria Street
London
EC4V 4JL
United Kingdom
Bankers
JP Morgan Chase Bank, N.A.
Chaseside
Bournemouth
BH7 7DB
United Kingdom
1
Cabot G.B. Limited
Strategic report
for the year ended 30 September 2023
The directors present their strategic reports on the affairs of the company, together with the audited financial statements, for the year ended 30 September 2023.
Cabot G.B. Limited is a holding company of investments in other Cabot group companies and provides ongoing retirement benefit plans.
Review of the business
There have not been any significant changes in the principal activity of the company in the financial year ended 30 September 2023. During the year the Trustees have entered a Buy-in with PIC Insurance for an indicative price of £40,000,000 and the proposed Plan will include moving to Buy-out in FY25.
The company's loss for the year was £1,319,000 (2022: profit of £106,650,000). The prior year included Dividend Income of £112,714,000. The directors consider the year-end financial position to be satisfactory. The balance sheet position of the company is acceptable and in line with the directors' expectations. Net assets at 30 September 2023 were £103,997,000 (2022 £110,778,000 (restated)).
Key performance indicators
Given the straightforward nature of the business, the directors review at least once a year the ongoing relevance of the assumptions used to calculate the pension plan liabilities as the main key performance indicator which are discussed in detail within the pension note.
Principal risks and uncertainties
The directors have considered the principal risks and uncertainties of the company and they consider these to be those detailed in the financial risk management disclosures below.
Financial risk management
The company's operations expose it to a variety of financial risks that include the effects of changes on liquidity risk and interest rate risk. The company has in place a risk management programme that seeks to limit the adverse effects on the financial performance of the company by monitoring levels of debt finance and the related finance costs.
The policies set by the board of directors are implemented by the company's finance department. The department has a policy and procedures manual that sets out specific guidelines to manage interest rate risk and circumstances where it would be appropriate to use financial instruments to manage these.
Liquidity risk
The company actively maintains a mixture of long-term and short-term debt finance with other Cabot group companies that is designed to ensure the company has sufficient available funds for operations and planned expansions.
Interest rate cash flow risk
The company has both interest-bearing assets and interest-bearing liabilities. These relate entirely to inter-group borrowings which are largely dictated by the Group's interest rate management policies.
2
Cabot G.B. Limited
Strategic report (continued)
for the year ended 30 September 2023
Financial risk management (continued)
Retirement benefit obligation discount rates
The discount rate has been derived with reference to market yields at the end of the reporting period on high quality sterling-denominated corporate bonds with maturities consistent with the estimated period of future payments from the retirement benefit plans.
Economic Impacts
Increase in interest rates and inflation have factored into Cabot reference rates affecting internally charged interest on various intercompany loans.
Future developments
During the year the Trustees have entered a Buy-in with PIC Insurance for an indicative price of £40,000,000 and the proposed Plan will include moving to Buy-out in FY25.
Approved by the Board of Directors on ………28 Mar 2024…………. and signed on behalf of the Board by:
A Tucker
Director
3
Cabot G.B. Limited
Directors' report
for the year ended 30 September 2023
The directors present their annual report on the affairs of Cabot G.B. Limited (“the Company”), together with the financial statements and auditor's report for the year ended 30 September 2023.
Dividends and transfers to reserves
No dividends were paid in the financial year (2022: £6,580,000) to Cabot UK holdings Limited. The loss for the year of £1,319,000 (2022: profit of £106,650,000) has been taken to reserves.
Going concern
At 30 September 2023 the Company had net assets of £103,997,000 (2022: £110,778,000 (restated)). The directors have carried out a review of the company's financial position for a period of 12 months from the date of signing these financial statements and received a letter of support from its parent company, Cabot Corporation Inc.
Given the uncertainties surrounding the current economic environment, the company is reliant on Cabot Corporation Inc's ability to support them in the coming months. The letter of support has provided an acknowledgment whereby any amounts due to Cabot Corporation Inc. or its subsidiaries within the group will not be recalled for repayment until a time when sufficient funds are available.
Cabot Corporation Inc. monitors the company's financial situation on an ongoing basis and may take actions to refinance or other actions to financially support this wholly owned subsidiary if required in the future. Cabot Corporation Inc. also confirms that it will guarantee any debts owed from its subsidiaries to the company should repayment be sought.
Accordingly, the going concern basis adopted for the preparation of the financial statements is considered appropriate.
Directors
The directors who held office during the year and up to the date of signing are E Oezdemir, L Dumont, A Tucker and AW Rees (resigned November 2022). The Company has made qualifying third-party indemnity provisions for the benefit of its directors which were made during the year and remain in force at the date of this report.
Events after the balance sheet date
The company is expecting to reach buy out of the pension scheme in FY2025.
4
Cabot G.B. Limited
Directors' report (continued)
for the year ended 30 September 2023
Auditor
Each of the persons who is a director of the company at the date when this report is approved confirms that:
so far as the director is aware, there is no relevant audit information of which the company's auditor is unaware; and
the director has taken all the steps that he/she ought to have taken as a director in order to make himself/herself aware of any relevant audit information and to establish that the company's auditor is aware of that information.
This confirmation is given and should be interpreted in accordance with the provisions of s418 of the Companies Act 2006.
Under section 487(2) of the Companies Act 2006, Menzies LLP will be deemed to have been reappointed as auditors 28 days after these financial statements were sent to members or 28 days after the latest date prescribed for filing the accounts with the registrar, whichever is earlier.
Approved by the Board of Directors on …………
28 Mar 2024
28 March 2024
……………..and signed on behalf of the Board by:
A Tucker
Director
5
Cabot G.B. Limited
Directors' responsibilities statement
for the year ended 30 September 2023
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), including FRS 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 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; and
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.
6
Cabot G.B. Limited
Independent auditor's report to the members of Cabot G.B. Limited
Report on the audit of the financial statements
Opinion
We have audited the financial statements of Cabot G.B. Limited (the ‘company') for the year ended 30 September 2023 which comprise the Profit and Loss account, the Statement of Comprehensive Income, the Balance Sheet, the Statement of Changes in Equity and the related notes, including a summary of significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 ‘The Financial Reporting Standard applicable in the UK and Republic of Ireland' (United Kingdom Generally Accepted Accounting Practice).
In our opinion the financial statements:
*
give a true and fair view of the state of the Company's affairs as at
30 September 2023
30 September 2023
and of its loss for the year then ended;
*
have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and
*
have been prepared in accordance with the requirements of the Companies Act 2006.
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditors' responsibilities for the audit of the financial statements section of our report. We are independent of the Company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the 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 Company's ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.
Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.
Other information
The 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.
7
Cabot G.B. Limited
Independent auditor's report to the members of Cabot G.B. Limited (continued)
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 Directors' Report for the financial year for which the financial statements are prepared is consistent with the financial statements; and
*
the Directors' Report has been prepared in accordance with applicable legal requirements.
Matters on which we are required to report by exception
In the light of the knowledge and understanding of the Company and its environment obtained in the course of the audit, we have not identified material misstatements in the 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 directors' 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 set out on page 6, 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.
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 financial statements.
Irregularities, including fraud, are instances of noncompliance 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:
8
Cabot G.B. Limited
Independent auditor's report to the members of Cabot G.B. Limited (continued)
*
The Company is subject to laws and regulations that directly affect the financial statements including financial reporting legislation. We determined that the following laws and regulations were most significant included:
*
The Companies Act 2006;
*
Financial Reporting Standard 102;
*
UK tax legislation and
*
General Data Protection Regulations.
*
We assessed the extent of compliance with these laws and regulations as part of our procedures on the related financial statement items.
*
We understood how the company is complying with those legal and regulatory frameworks by, making
inquiries to management, those responsible for legal and compliance procedures and the company secretary. We corroborated our inquiries through our review of board minutes.
*
The engagement partner assessed whether the engagement team collectively had the appropriate competence and capabilities to identify or recognise noncompliance with laws and regulations. The assessment did not identify any issues in this area.
*
We assessed the susceptibility of the company's and financial statements to material misstatement, including how fraud might occur. Audit procedures performed by the engagement team included:
*
Identifying and assessing the design effectiveness of controls management has in place to prevent and detect fraud;
*
Understanding how those charged with governance considered and addressed the potential for override of controls or other inappropriate influence over the financial reporting process.
*
Challenging assumptions and judgements made by management in its significant accounting estimates; and Identifying and testing journal entries, in particular any journal entries posted with unusual account combinations.
As a result of the above procedures, we considered the opportunities and incentives that may exist within the
organisation for fraud and identified the greatest potential for fraud in the following areas;
*
The application of inappropriate judgements or estimation to manipulate the Company's financial position
*
Posting of unusual journals and complex transactions; and
*
The use of management override of controls to manipulate results, or to cause the Company to enter into transactions not in its best interests.
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 noncompliance 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 noncompliance. The risk is also greater regarding irregularities occurring due to fraud rather than error, as fraud involves intentional concealment, forgery, collusion, omission or misrepresentation.
9
Cabot G.B. Limited
Independent auditor's report to the members of Cabot G.B. Limited (continued)
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 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 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.
Caroline Milton FCA (Senior Statutory Auditor)
for and on behalf of
Menzies LLP
Chartered Accountants
Statutory Auditor
Ashcombe House
5 The Crescent
Leatherhead
Surrey
KT22 8DY
Date: 28 Mar 2024
10
Cabot G.B. Limited
Profit and loss account
for the year ended 30 September 2023
Note
2023
2022
£'000
£'000
Administrative expenses
(869)
(1,133)
Operating ( loss)
3
(869)
(1,133)
Loss on disposal
8
(134)
-
Other finance income
11
490
218
Finance costs (net)
4
(750)
49
Dividend income
5
-
112,714
Amounts written off investments
8
-
(6,855)
(Loss)/ Profit before taxation
(1,263)
104,993
Tax on (loss)/ profit
7
(56)
1,657
(Loss)/ Profit for the financial year
(1,319)
106,650
The notes on pages 15 to 34 form part of the financial statements.
All the items in the profit and loss account relate to continuing operations.
11
Cabot G.B. Limited
Statement of comprehensive income
for the year ended 30 September 2023
Note
2023
2022
£'000
£'000
(Loss)/ Profit for the financial year
(1,319)
106,650
Dividend Paid
-
(6,580)
(2,226)
Actuarial (loss) on retirement benefit schemes
11
(7,283)
Movement on deferred tax relating to retirement benefit schemes
12
1,821
556
Total comprehensive (charge)/ income attributable to the equity shareholder of the company for the year
(6,781)
98,400
The notes on pages 15 to 34 form part of the financial statements.
12
Cabot G.B. Limited
Balance sheet
as at 30 September 2023
Restated
Note
2023
2022
£'000
£'000
Fixed assets
Investments
8
115,022
115,156
Net pension asset
11
2,388
8,990
117,410
124,146
Current assets
Debtors: due within one year
9
38
82
38
82
Creditors: amounts falling due within one year
10
(12,969)
(11,203)
Net current (liabilities)/ assets
(12,931)
(11,121)
Total assets less current liabilities
104,479
113,025
Provisions for liabilities
12
(482)
(2,247)
)
Net assets
103,997
110,778
Capital and reserves
Called up share capital
13
-
-
Profit and loss account
13
103,997
110,778
Total Equity
103,997
110,778
The notes on pages 15 to 34 form part of the financial statements.
The financial statements of Cabot G.B. Limited, registered number 02169208, were approved by the Board of Directors and authorised for issue on ………
28 Mar 2024
28 March 2024
…………... They were signed on its behalf by:
A Tucker
Director
13
Cabot G.B. Limited
Statement of changes in equity
at 30 September 2023
Called up share capital
Profit and loss account
Total
£'000
£'000
£'000
At 01 October 2021 (as previously stated)
-
14,446
14,446
Prior Year adjustment
-
(2,068)
(2,068)
At 01 October 2021 (as restated)
-
12,378
12,378
Profit for the financial year
-
106,650
106,650
Dividend Paid
-
(6,580)
(6,580)
Actuarial loss on retirement benefit schemes
-
(2,226)
(2,226)
Movement on deferred tax relating to retirement benefit schemes
-
556
556
Total comprehensive income
-
98,400
98,400
At 30 September 2022 (as restated)
-
110,778
110,778
Loss for the financial year
-
(1,319)
(1,319)
Actuarial loss on retirement benefit schemes
-
(7,283)
(7,283)
Movement on deferred tax relating to retirement benefit schemes
-
1,821
1,821
Total comprehensive income
-
(6,781)
(6,781)
As at 30th September 2023
-
103,997
103,997
The notes on pages 15 to 34 form part of the financial statements.
14
Cabot G.B. Limited
Notes to the financial statements
for the year ended 30 September 2023
1
Accounting policies
The principal accounting policies are summarised below. They have all been applied consistently throughout the current and preceding year.
General information and basis of accounting
Cabot G.B. Limited (“the Company”) is a private company limited by shares incorporated in the United Kingdom under the companies Act 2006 and is registered in England and Wales. The address of the registered office is given on page 1. The nature of the company's operations and its principal activities are set out in the strategic report on pages 2 and 3.
The financial statements have been prepared under the historical cost convention with the pensions being measured at present value and the related assets are measured at fair value and in accordance with Financial Reporting Standard 102 (FRS 102) issued by the Financial Reporting Council.
The functional currency of the company is considered to be pounds sterling because that is the currency of the primary economic environment in which the company operates. Monetary amounts in these financial statements are rounded to the nearest £.
The entity satisfies the criteria of being a qualifying entity as defined in FRS 102. Its financial statements are consolidated into the financial statements of its ultimate parent company, Cabot Corporation Inc., which may be obtained at Two Seaport Lane, Suite 1400, Boston MA 02210-2019, USA.
As such, advantage of the following disclosure exemptions available under paragraph 1.18 of FRS 102 were taken:
a) the requirements of section 7 Statement of cash flows;
b) the requirement of section 3 Financial Statement of Presentation paragraph 3.17 (d);
c) the requirements of section 33 Related party disclosures paragraph 33.7.
Investments
Investments in subsidiaries are stated at cost less any provisions for impairment in value. Other investments are held at cost but reviewed for significant changes in market value. An impairment is recognised where conditions exist that suggest the carrying value of an investment exceeds its recoverable amount, which is considered to be the higher of the future anticipated cash flows from the investment, discounted to current value, and the value of the investment which could be realised if it were to be sold, less any incidental costs of disposal.
Taxation
Current tax, including UK corporation tax and foreign tax, is provided at amounts expected to be paid (or recovered) using the tax rates and laws that have been enacted or substantively enacted by the balance sheet date.
Deferred tax is recognised in respect of all timing differences that have originated but not reversed at the balance sheet date where transactions or events that result in an obligation to pay more tax in the future or a right to pay less tax in the future have occurred at the balance sheet date. Timing differences are differences between the company's taxable profits and its results as stated in the financial statements that arise from the inclusion of gains and losses in tax assessments in periods different from those in which they are recognised in the financial statements.
15
Cabot G.B. Limited
Notes to the financial statements
for the year ended 30 September 2023 (continued)
1
Accounting policies (continued)
Taxation (continued)
Unrelieved tax losses and other deferred tax assets are recognised only to the extent that, on the basis of all available evidence, it can be regarded as more likely than not that there will be suitable taxable profits from which the future reversal of the underlying timing differences can be deducted.
When the amount that can be deducted for tax for an asset that is recognised in a business combination is less (more) than the value at which it is recognised, a deferred tax liability (asset) is recognised for the additional tax that will be paid (avoided) in respect of that difference. Similarly, a deferred tax asset (liability) is recognised for the additional tax that will be avoided (paid) because of a difference between the value at which a liability is recognised and the amount that will be assessed for tax.
Deferred tax liabilities are recognised for timing differences arising from investments in subsidiaries and associates, except where the company is able to control the reversal of the timing difference and it is probable that it will not reverse in the foreseeable future.
Deferred tax is measured using the tax rates and laws that have been enacted or substantively enacted by the balance sheet date that are expected to apply to the reversal of the timing difference.
Where items recognised in other comprehensive income or equity are chargeable to or deductible for tax purposes, the resulting current or deferred tax expense or income is presented in the same component of comprehensive income or equity as the transaction or other event that resulted in the tax expense or income.
Current tax assets and liabilities are offset only when there is a legally enforceable right to set off the amounts and the company intends either to settle on a net basis or to realise the asset and settle the liability simultaneously. Deferred tax assets and liabilities are offset only if: a) the company has a legally enforceable right to set off current tax assets against current tax liabilities; and b) the deferred tax assets and deferred tax liabilities relate to income taxes levied by the same taxation authority on either the same taxable entity or different taxable entities which intend either to settle current tax liabilities and assets on a net basis, or to realise the assets and settle the liabilities Notes to the financial statements simultaneously, in each future period in which significant amounts of deferred tax liabilities or assets are expected to be settled or recovered.
Interest income
Interest income is recognised when it is probable that the economic benefits will flow to the company and the amount of revenue can be measured reliably. Interest income is accrued on a time basis, by reference to the principal outstanding and at the effective interest rate applicable, which is the rate that exactly discounts estimated future cash receipts through the expected life of the financial asset to that asset's net carrying amount on initial recognition.
16
Cabot G.B. Limited
Notes to the financial statements
for the year ended 30 September 2023 (continued)
1
Accounting policies (continued)
Dividend Income
Dividend income from investments is recognised when the shareholders' rights to receive payment have been established (provided that it is probable that the economic benefits will flow to the company and the amount of revenue can be measured reliably).
Interest payable
Interest payable comprises of interest payable on intercompany lending and is calculated using the applicable interest rates. Interest payable costs are expensed in the period in which they are incurred.
Retirement benefits
The company has fully implemented the requirements of section 28 of FRS 102 ‘Employee Benefits' in the preparation of these financial statements.
From 1 October 2011, the company operated two defined benefit pension schemes and one healthcare into retirement plan:
i)
Cabot Carbon Limited and Cabot Plastics Limited defined benefit schemes: The assets of the schemes are measured at their fair value at the balance sheet date and the liabilities are measured on an actuarial basis using the projected unit method. A professionally qualified actuary performs full actuarial valuations every three years. The actuary also reviews the most recent actuarial valuations and updates them to reflect current conditions. The pension schemes have been closed to future contributions since 31 January 2012.
The amounts charged to the operating result are the current service costs and gains and losses on settlements and curtailments. They are included as part of administrative costs. Past service costs are recognised immediately in the profit and loss account if the benefits have vested. If the benefits have not vested immediately, the costs are recognised over the period until vesting occurs. The interest cost and the expected return on assets are shown as a
net amount of other finance costs or credits adjacent to interest. Actuarial gains and losses are recognised immediately in the statement of comprehensive income.
ii)
Cabot Carbon Limited defined contribution scheme: The scheme closed to members on 31 January 2012. There were no contributions included in the results for the financial year.
iii) The company also provides the post-retirement benefit of healthcare into retirement for former Cabot Carbon Limited employees prior to 1991. The company accounts for this benefit in accordance with section 28 of FRS 102.
17
Cabot G.B. Limited
Notes to the financial statements
for the year ended 30 September 2023 (continued)
1
Accounting policies (continued)
Foreign currencies
Monetary assets and liabilities denominated in foreign currencies are translated into sterling at the rates of exchange ruling at the year-end. Transactions in foreign currencies are translated at the rate of exchange ruling at the date Monetary assets and liabilities denominated in foreign currencies are translated into sterling at the rates of exchange ruling at the year-end. Transactions in foreign currencies are translated at the rate of exchange ruling at the date of the transaction. All exchange differences, both realised and unrealised, are taken to the profit and loss account in the year in which they arise and are included in the finance costs.
Financial Instruments
The Cabot Group's Corporate Treasury function provides services to the business, co-ordinates access to domestic and international financial markets, monitors and manages financial risk, including market risk covering currency risk, fair value interest rate risk and price risk together with credit risk, liquidity risk and cash flow interest rate risk. The Group Treasury are tasked with mitigating risk and governed by financial risk management policies that are set by the group board.
i) Financial assets and liabilities
All financial assets and liabilities are initially measured at transaction price (including transaction costs), except for those financial assets classified as at fair value through profit or loss.
Debt instruments which comply with all of the condition of FRS102 are classified as 'basic'. Instruments classified as 'basic' financial instruments are subsequently measured at amortised cost using the effective interest method.
Financial assets are derecognised when and only when the contractual rights to the cash flows from the financial asset expire or are settled, the Company transfers to another party substantially all of the risks and rewards of ownership of the financial asset, or the Company, despite having retained some, but not all, significant risks and rewards of ownership, has transferred control of the asset to another party. Financial liabilities are derecognised only when the obligation specified in the contract is discharged, cancelled or expires.
18
Cabot G.B. Limited
Notes to the financial statements
for the year ended 30 September 2023
1
Accounting policies (continued)
(ii) Equity Instruments
Equity instruments issued by the Company are recorded at the fair value of cash or other resources received or receivable, net of transaction costs.
Group financial statements
Group financial statements have not been prepared as permitted by section 401 of the Companies Act 2006 as the company is a wholly-owned subsidiary of Cabot Corporation Inc., a company incorporated in the United States of America, which prepares consolidated financial statements which are publicly available.
Interest Rates
The company is exposed to SONIA interest rates in its group undertakings relating to intercompany debtors and creditors.
2
Critical accounting judgements and key sources of estimation uncertainty
In the application of the company's accounting policies, which are described in note 1, the directors are required to make judgements, estimates and assumptions about the carrying amounts 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.
Critical judgements in applying the company's accounting policies
A number of judgements relating to pensions assumptions have been made by the directors, taking advice where appropriate from the professional advisers, trustees and investment manager. Further details on the key assumptions used are detailed in note 11. The directors have reviewed and agreed on the most appropriate factors to apply in calculating the company's retirement benefit obligations. There are no other critical judgements that the directors have made in the process of applying the company's accounting policies and that have the most significant effect on the amounts recognised in the financial statements.
19
Cabot G.B. Limited
Notes to the financial statements
for the year ended 30 September 2023
2
Critical accounting judgements and key sources of estimation uncertainty (continued)
Key Sources of uncertainty in applying the company's accounting policies;
The directors consider there to be an acceptable level of uncertainty relating to pension and retirement in health benefit mortality assumptions used in determining the retirement benefit obligations of the company (see note 11). Based on March 2022 when the funding was assessed at 117% for the Pensions driven from the positive investment returns through de-risking from a significantly equity weighted portfolio to a blend of gilts, index-linked gilts and corporate bonds.
3
Operating loss
The operating loss is stated after charging:
2023
2022
£'000
£'000
Fees payable to the company's auditor for the audit of the company's annual financial statements
10
9
There were no fees payable to Menzies LLP and their associated for non-audit services (2022:£nil).
4
Finance Costs (net)
2023
2022
£'000
£'000
Interest receivable on inter-company loans
-
158
Interest payable on inter-company loans
(750)
(109)
Total
(750)
49
20
Cabot G.B. Limited
Notes to the financial statements
for the year ended 30 September 2023
5
Dividend Income
2023
2022
£'000
£'000
Inter Company dividends receivable
112,714
6 Staff numbers and costs
There were no employees other than the directors, in the company in either year. The directors receive no remuneration for their services to the company (2022: £nil)
7 Tax on profit/loss
2023
2022
£'000
£'000
Current tax on profit
UK corporation tax
-
(1,748)
Total tax charge/(credit)
(1,748)
-
Deferred Tax
Pension cost relief less than pension charge
56
203
Effect of tax rate change on opening balance
-
(112)
Total deferred tax (see note 12)
56
91
Tax charge/ (credit) on profit
56
(1,657)
The charge for the year is higher than the standard rate of corporation tax. (2022:lower than).
21
Cabot G.B. Limited
Notes to the financial statements
for the year ended 30 September 2023
7 Tax on Profit (continued)
The tax assessed for the year is different from the rate of corporation tax in the year of 22.01%( the corporation tax rate of 25% came into force on the 1st April 23, the rate currently being used is time apportioned) (2022: 19%). The differences are explained below:
2023
2022
£'000
£'000
Profit/(Loss) before tax
(1,263)
104,993
Tax on profit at the rate of UK corporation tax of 22.01% (2022: 19%)
19,948
(278)
Effect of:
Group Relief surrendered
327
234
Adjustment to Tax charge in respect of previous period
-
(1,749)
Income not taxable for tax purposes
-
(21,415)
Expenses not deductible for tax purposes
-
1,302
Changes in tax rate
7
23
Tax charge/(credit) for the year
56
(1,657)
22
Cabot G.B. Limited
Notes to the financial statements
for the year ended 30 September 2023
8
Fixed asset investments
Investments in subsidiary undertakings
Cost and net book value
£'000
Cost
At 1 October 2022
134,996
Disposal
(134)
At 30 September 2023
134,862
Impairment
At 1 October 2022
19,840
Impairment Charge
-
At 30 September 2023
19,840
Net book value
At 30 September 2023
115,022
At 30 September 2022
115,156
23
Cabot G.B. Limited
Notes to the financial statements
for the year ended 30 September 2023
8 Fixed asset investments (continued)
Investments in subsidiary undertakings
At 30 September 2023 and 2022 the company directly held the whole of the issued ordinary share capital of the following trading subsidiaries which are registered in England:
Subsidiary undertaking
Country of incorporation of principal business and registered office
Principal activity
Holding
%
Cabot Carbon Limited
Sully Moors Road, Sully, Vale of Glamorgan, CF64 5RP, United Kingdom
Manufacture of performance chemicals
Ordinary
100%
Cabot Plastics Limited
Sully Moors Road, Sully, Vale of Glamorgan, CF64 5RP, United Kingdom
Investment Holding
Ordinary
100%
Cabot U.K. Limited
Sully Moors Road, Sully, Vale of Glamorgan, CF64 5RP, United Kingdom
Investment holding
Ordinary
100%
In 2022 an investment in Cabot Plastics was impaired by the value of £6,855,000.
The subsidiary undertakings have not been consolidated by Cabot GB Limited as permitted by s.401 of the Companies Act 2006 as it is consolidated in the financial statements of Cabot Corporation Inc.
Liquidation of Cabot Speciality Fluids North Sea during the year resulted in a £134,000 loss on disposal.
24
Cabot G.B. Limited
Notes to the financial statements
for the year ended 30 September 2023
9
Debtors
2023
2022
£'000
£'000
Amounts falling due within one year
Amounts owed by Cabot group undertakings for group tax relief
18
20
Other debtors
20
62
38
82
Amounts owed by group undertakings are not interest-bearing.
10
Creditors: amounts falling due within one year
Restated
2023
2022
£'000
£'000
Amounts due to group undertakings
12,718
10,769
Trade creditors
32
108
Accruals
219
326
12,969
11,203
Amounts owed to group undertakings are interest-bearing and based on 3 month SONIA rates plus a spread of 1.25% for short term debts or SWAP rates using a mid market quote for long term debts. The effective interest rate used for the current year is 6.35%. Amounts are repayable on demand.
11
Pension asset / (liability)
As described in the Strategic Report and the accounting policies, the company operates two pension plans and one retirement health plan.
i)
Cabot Carbon Limited Pension Plan - A scheme with defined benefit and defined contribution elements. A complete independent actuarial valuation of the fund is undertaken every three years, the most recent being at 31 March 2020, when the value of the assets of the scheme was £36,300,000 and assumed a shortfall of assets over liabilities in respect of past service of £300,000. The triennial review for period ending 31 March 2023 will be completed mid-year 2024. This will be compliant with the filing deadline for the Pensions Regulator. As funding has been assessed since March 2021 to be greater than 100% no further contributions have been required.
25
Cabot G.B. Limited
Notes to the financial statements
for the year ended 30 September 2023
11
Pension asset / (liability) continued
ii)
Cabot Plastics Limited Pension Plan - A scheme with defined benefit and defined contribution elements. A complete independent actuarial valuation of the fund is undertaken every three years, the most recent being at 31 March 2020, when the value of the assets of the scheme was £20,200,000 and assumed a shortfall of assets over liabilities in respect of past service of £800,000. The triennial review for period ending 31 March 2023 will be completed mid-year 2024. As funding has been assessed since March 2021 to be greater than 100% no further contributions have been required.
iii)
Cabot Carbon Limited Healthcare Plan - The company provides the post-retirement benefit of healthcare into retirement for employees with service prior to 1991. The company accounts for this benefit in accordance with section 28 of FRS 102. During the year, the company contributions to the healthcare into retirement scheme were £204,000 (2022: £175,000). The profit and loss account was charged with £230,000 (2022: £141,000) in respect of the healthcare expense £217,000 of which (2022: £115,000) is included within other finance income, within the balance in administrative charges.
On the 4th August 2023 Cabot Plastics Limited Pension Plan and Cabot Carbon Limited Pension Plan have both entered into a full scheme buy-in policy which covers 100% of liabilities and that loss arising from the buy-in process has been recognised through other comprehensive income. The buy-in amount was £24.5m for Cabot Carbon Limited pension plan and £14.9m for the Cabot Plastics Limited pension plan.
In accordance with the requirements of section 28 of FRS 102, an update of the last formal valuation was made at 30 September 2023. The major assumptions, in respect of the Pension Schemes, used by the actuary in performing this update were:
2023
2022
2023
2022
Cabot Carbon Limited Pension Plan
Cabot Carbon Limited Pension Plan
Cabot Plastics Limited Pension Plan
Cabot Plastics Limited Pension Plan
%
%
%
%
Rate of increase in salaries
N/A
N/A
N/A
N/A
Rate of increase in pensions in payment
2.50-3.75
2.50-3.50
2.50-3.25
2.50-3.00
Rate of increase in pensions in deferment
3.75-5.00
3.50-5.00
3.75-5.00
3.50-5.00
Discount rate
5.39
1.96
5.35
2.01
Inflation assumption (RPI)
3.75
3.50
3.75
3.50
26
Cabot G.B. Limited
Notes to the financial statements for the year ended 30 September 2023
11
Pension asset / (liability) (continued)
Cost method used
The Projected Unit Credit Cost Method is used to determine the present value of the defined benefit obligation and the related effect of employee services in the current period. Under this method, a “projected accrued benefit” is calculated based upon service as of the date of valuation, but the benefit formula is based on future salary and social security levels, using assumptions about the growth of those amounts projected to the age at which the employee is assumed to leave active service.
In accordance with the requirements of section 28 of FRS 102, an update of the last formal valuation was made at 30 September 2023. The major assumptions, in respect of the Healthcare plan, used by the actuary in performing this update were:
2023
2022
%
%
Discount rate
5.38
1.98
Inflation assumption (RPI)
3.75
3.50
Medical trend rate pre-retirement
8.25
8.00
Medical trend rate post-retirement
8.25
8.00
Summary of mortality assumptions
Mortality for all members is assumed to follow “SAPS S3 All” tables with a multiplier of 104%, applicable to each member's year of birth, projected in line with core CMI 2022 projections from 2013, with a 1.25% long-term trend rate.
The assumed life expectations on retirement at age 65 years:
As at
As at
30 September 2023
30 September 2022
Retiring today
Years
Years
Males
21.1
21.6
Females
23.6
24.0
Retire in 15 years
Males
21.9
22.5
Females
24.6
25.1
27
Cabot G.B. Limited
Notes to the financial statements
for the year ended 30 September 2023
11 Pension asset / (liability) (continued)
Amounts recognised in the profit and loss account are as follows:
2023
2023
2023
2023
Cabot Carbon Limited Pension Plan
Cabot Plastics Limited Pension Plan
Cabot Carbon Limited Healthcare Plan
Total
£'000
£'000
£'000
£'000
Current service cost included in administrative expenses
-
-
(13)
(13)
Other financial (expenses) / income:
Net interest on defined benefit assets / (liabilities)
448
259
(217)
490
Plan introductions, changes, curtailments and settlements
-
-
-
-
Total credit / (charge) to other finance expenses
448
259
(217)
490
Total credit / (charge) to the profit and loss account
448
259
(230)
477
2022 Cabot Carbon Limited Healthcare Plan
2022
2022 Cabot Carbon Limited Pension Plan
2022 Cabot Plastics Limited Pension Plan
Total
£'000
£'000
£'000
£'000
Current service cost included in administrative expenses
-
-
(26)
(26)
Other financial (expenses) / income:
Net interest on defined benefit assets / (liabilities)
206
127
(115)
218
Plan introductions, changes, curtailments and settlements
-
-
-
-
Total credit/(charge) to other finance expenses
206
127
(141)
192
Total credit/(charge) to the profit and loss account
206
127
(141)
192
28
Cabot G.B. Limited
Notes to the financial statements
for the year ended 30 September 2023
11
Pension asset / (liability) continued
The amounts included within the statement of other comprehensive income are as follows:
2023 Cabot Carbon Limited Pension Plan
2023 Cabot Plastics Limited Pension Plan
2023 Cabot Carbon Limited Healthcare Plan
2023
Total
£'000
£'000
£'000
£'000
Actuarial gains and losses arising during the period
756
591
831
2,178
Return on plan assets greater than the discount rate
(5,487)
(3,974)
-
(9,461)
Actuarial loss recognised in the statement of comprehensive income
(4,731)
(3,383)
831
(7,283)
2022
2022
2022
2022
Cabot Carbon Limited Pension Plan
Cabot Plastics Limited Pension Plan
Cabot Carbon Limited Healthcare Plan
Total
£'000
£'000
£'000
£'000
Actuarial gains and losses arising during the period
6,356
1,717
17,925
9,852
Return on plan assets greater than the discount rate
(12,232)
(7,919)
-
(20,151)
Actuarial loss recognised in the statement of comprehensive income
(2,380)
(1,563)
1,717
(2,226)
29
Cabot G.B. Limited
Notes to the financial statements
for the year ended 30 September 2023
11 Pension asset / (liability) (continued)
The actual return on net assets was £(3,886,000) (2022: £(11,393,000)) for the Cabot Carbon Limited pension plan and (£3,053,000) 2022: £(7,406,000)) for the Cabot Plastics Limited Pension Plan.
Reconciliation of present value of liabilities and fair value of assets recognised in the balance sheet:
2023
2022
£'000
£'000
Present value of defined benefit obligations
(36,347)
(39,171)
Fair value of scheme assets
38,735
48,161
Net pension asset recognised in the balance sheet
2,388
8,990
Movements in the present value of defined benefit obligations were as follows:
2023 Cabot Carbon Limited Pension Plan
2023 Cabot Plastics Limited Pension Plan
2023 Cabot Carbon Limited Healthcare Plan
2023 Total
£'000
£'000
£'000
£'000
At 1 October
22,296
12,713
4,162
39,171
Effect of employer service in the current period
-
-
13
13
Interest cost on the defined benefit obligation
1,153
662
217
2,032
Re-measurement of the defined benefit obligation
(756)
(591)
(831)
(2,178)
Benefits paid from plan assets
(1,793)
(694)
(204)
(2,691)
30 September 2023
20,900
12,090
3,357
36,347
30
Cabot G.B. Limited
Notes to the financial statements
for the year ended 30 September 2023
11 Pension asset / (liability) (continued)
Movements in the present value of defined benefit obligations were as follows (continued):
2022
2022 Cabot Carbon Limited Healthcare Plan
2022 Total
2022 Cabot Plastics Limited Pension Plan
Cabot Carbon Limited Pension Plan
£'000
£'000
£'000
£'000
At 1 October
33,107
19,764
5,913
58,784
Effect of employer service in the current period
-
-
26
26
Interest cost on the defined benefit obligation
633
386
115
1,134
Re-measurement of the defined benefit obligation
(9,852)
(6,356)
(1,717)
(17,925)
Benefits paid from plan assets
(1,592)
(1,081)
(175)
(2,848)
At 30 September 2022
22,296
12,713
4,162
39,171
Movements in the fair value of plan assets were as follows:
2023 Cabot Carbon Limited Healthcare Plan
2023
2023 Cabot Carbon Limited Pension Plan
2023 Cabot Plastics Limited Pension Plan
Total
£'000
£'000
£'000
£'000
At 1 October
30,605
17,556
-
48,161
Interest income on plan assets
1,601
921
-
2,522
Return on plan assets greater than discount rate
(5,487)
(3,974)
-
(9,461)
Employer contributions
-
-
204
204
Benefits paid
(1,793)
(694)
(204)
(2,691)
At 30 September
24,926
13,809
-
38,735
31
Cabot G.B. Limited
Notes to the financial statements
for the year ended 30 September 2023
11 Pension asset / (liability) (continued)
Movements in the fair value of plan assets were as follows (continued):
2022 Cabot Carbon Limited Pension Plan
2022 Cabot Plastics Limited Pension Plan
2022 Cabot Carbon Limited Healthcare Plan
2022 Total
£'000
£'000
£'000
£'000
At 1 October
43,590
26,043
-
69,633
Interest income on plan assets
839
513
-
1,352
Return on plan assets greater than discount rate
(12,232)
(7,919)
-
(20,151)
Employer contributions
-
-
175
175
Benefits paid
(1,592)
(1,081)
(175)
(2,848)
At 30 September
30,605
17,556
-
48,161
The analysis of the scheme assets was as follows:
Value at
Value at
2023
30 September 2023
2023
30 September 2023
Asset % Allocation Cabot Carbon Limited Pension Plan
Asset % Allocation Cabot Plastics Limited Pension Plan
Cabot Carbon Limited Pension Plan
Cabot Plastics Limited Pension Plan
%
£'000
%
£'000
Equity Securities
-
0.0
0.0
-
Debt Securities
10.5
2,617
4.8
663
Other
5.6
1,396
7.6
1,049
Insurance Contracts
83.9
20,913
87.6
12,097
Fair value of plan assets
100%
24,926
100%
13,809
32
Cabot G.B. Limited
Notes to the financial statements
for the year ended 30 September 2023
11 Pension asset / (liability) (continued)
The analysis of the scheme assets was as follows (continued):
2022
Value at
Value at
Asset % Allocation Cabot Carbon Limited Pension Plan
30 September 2022
2022
30 September 2022
Asset % Allocation Cabot Plastics Limited Pension Plan
Cabot Carbon Limited Pension Plan
Cabot Plastics Limited Pension Plan
%
£'000
%
£'000
Equity Securities
-
0.0
0.0
-
Debt Securities
99.8
30,544
98.1
17,222
Other
0.2
61
1.9
334
Real Estate and Property
0.0
-
0.0
-
Fair value of plan assets
100%
30,605
100%
17,556
12
Provisions for liabilities (deferred tax)
Deferred tax is provided as follows:
2023
2022
£'000
£'000
Deferred tax liability at 1 October
(2,247)
(2,712)
Charge to profit and loss account – current period
(56)
(203)
(Charge)/credit to statement of changes in equity – current period
1,821
556
Charge to statement of changes in equity – change in tax rate
-
112
Deferred tax liability at 30 September
(482)
(2,247)
Deferred tax assets and liabilities are offset only where the company has a legally enforceable right to do so and where the assets and liabilities relate to income taxes levied by the same taxation authority on the same taxable entity.
The deferred tax liability is made up as follows:
2023
2022
£'000
£'000
Deferred taxation relating to retirement benefit obligations
(597)
(2,247)
115
Losses and other deduction
-
(482)
Total
(2,247)
33
Cabot G.B. Limited
Notes to the financial statements
for the year ended 30 September 2023
13
Called up share capital and reserves
2023
2022
£
£
4 Ordinary shares of £1 each - allotted, called up and fully paid
4
4
The company has one class of ordinary share which carries no right to fixed income.
Reserves
The profit and loss account balance at 30 September 2023 of £103,997,000 loss (2022: £110,777,000) represents cumulative profits and reserve movements from dividends and common stock.
14
Ultimate holding company and controlling party
The ultimate parent undertaking and controlling party is Cabot Corporation Inc., a company incorporated in the United States of America, which is the parent undertaking of the smallest and largest group to consolidate the company's results. Copies of the group financial statements can be obtained from Cabot Corporation Inc., Two Seaport Lane, Suite 1400, Boston MA 02210-2019, USA which is also the entity's registered address.
The directors regard Cabot UK Holdings Limited, a company registered in England and Wales, as the company's immediate holding company and controlling party. Copies of the financial statements of Cabot UK Holdings Limited may be obtained from Cabot UK Holdings Limited, Sully Moors Road, Sully, Penarth, CF64 5RP.
15
Prior period adjustment
There has been a prior period adjustment of £2,068,000 in 2022 to remove deferred tax on unutilised tax losses. This has reduced creditors and the profit and loss reserve brought forward by £2,068,000. This adjustment has no impact on tax.
34
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