Company registration number 09860012 (England and Wales)
OSRAM LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
OSRAM LIMITED
COMPANY INFORMATION
Director
Mr A Edger
Company number
09860012
Registered office
450 Brook Drive
Green Park
Reading
RG2 6UU
Auditor
Westcotts (SW) LLP
Plym House
3 Longbridge Road
Plymouth
PL6 8LT
OSRAM LIMITED
CONTENTS
Page
Strategic report
1 - 3
Director's report
4 - 6
Independent auditor's report
7 - 10
Statement of comprehensive income
11 - 12
Statement of financial position
13
Statement of changes in equity
14
Notes to the financial statements
15 - 31
OSRAM LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
- 1 -
The director presents the strategic report for the year ended 31 December 2023.
Review of the business
General Business Review – statement of income
Revenue for the period ended December 31, 2023, totalled £10,855k (year ended December 31, 2022: £16,768k), of which £5,773k related to continuing operations (2022: £6,579k) and £5,082k related to discontinued operations (2022: £10,190k).
The operating gain was £11,236k for the period (2022: loss of -£26,359k), of which £10,946k related to continuing operations (2022: -£27,570k), and +£290k related to discontinued operations (2022: +£1,211k). The Company made a profit for the period after taxation of £10,002k (2022: -£27,059k), of which £9,966k related to continuing operations (2022: -£28,037k), and +£36k related to discontinued operations (2022: +£978k).
The figures disclosed for discontinued operations are the direct revenues and costs associated with those operations, but none of the shared overhead.
The directors work with the business units to anticipate risks from economic or global factors and plan accordingly as required. An evaluation of the potential impact of market factors is undertaken regularly by the business units so that the Company can respond appropriately.
The Company’s strategy is both to maximize profits for the shareholders through increasing organic sales of innovative products, and to maintain a very lean cost structure.
General Business Review - statement of financial position
Net assets as of December 31, 2023, totalled £11,280k (2022: £1,278k).
Principal risks and uncertainties
The Company, as part of the ams-OSRAM group of companies, has implemented a coordinated set of risk management and control systems, including strategic planning and management reporting, to help anticipate and manage its exposure to risk.
One of the principal risks for the Company is that of the low cost of imports by competitors. Major opportunities include the growing emphasis on environmental protection and the consequent focus upon energy saving lighting systems and solutions, and other technologies such as Solid-State Lighting (LEDs) which are having a positive impact upon the lighting market and its digitalization.
The United Kingdom (UK) departed from the European Union (EU) (‘Brexit’), following the ending of the UK-EU Transition Agreement on December 31, 2020. The Company imports all its products for resale from the EU and has engaged a customs agent to perform the necessary activities. No significant disruptions to the Company’s business have been experienced, although for administrative reasons the decision was taken to cease doing business in Eire and Northern Ireland after December 31, 2020, with OSRAM GmbH trading with these regions either directly or through a distributor.
The Company has a broad base of customers and provides a range of products and solutions that support the requirements of the lighting market. The wide portfolio of customers and products helps reduce the overall trading risk to the Company from business risks faced in the UK market.
Key performance indicators
The Company measures its performance on several key performance indicators, including revenue, operating profit and working capital management.
OSRAM LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 2 -
Other information and explanations
Acquisition and Disposal
Disposal of the Company’s Digital Systems business in 2023
As of 1st July 2023, OSRAM Ltd sold its Digital System business to a UK subsidiary of a lighting components Company based in China. As a result, the Company’s Digital System business has been disclosed in the Financial Statements as a discontinued operation both in 2022 and 2023.
Fair value of non-current investment
As outlined in the Company’s accounting policy for the measurement of non-current investments in point 1.5 of the Notes to the Financial Statements, and with effect from 31 December.2023 OSRAM Ltd has reclassified its non-current investments out of the cost less impairment measurement category and into the fair value through the profit and loss measurement category to reflect its current business model for managing financial assets. This reclassified fair value is applied from the reclassification date, and previously recognized impairment losses are not restated.
OSRAM Ltd currently owns 100% of the share capital of RING Automotive Ltd, this represents its sole non-current investment as at 31.12.2023. OSRAM Ltd estimated its fair value using discounted cash value techniques, discounted at an appropriate discount rate, reflecting the UK market in which RING Automotive Ltd operates. Based on this method RING Automotive Ltd was valued at £25,455k as at 31.12.2023, with the gain of £10,450k recognized in the Income Statement.
Section 172(1) statement
Section 172(1) of the Companies Act 2006 requires the directors to act in such a way as to promote the success of the Company. Set out below are key aspects of how this is achieved.
The Company operates as part of the ams-OSRAM group, contributing to the group’s long-term strategy to continue to be a global leader in optical solutions. Business decisions are made with this end in mind.
Business relationships
The Company works closely with its customers, through its account managers and customer services employees, to endeavour to provide the products the customers need. Its main supplier is its parent OSRAM GmbH.
Employee participation
The Performance Management and Personal Development Program (GROW) underpins the various methods for encouraging an open and participative style of management and communication; these include team meetings with Group Management, suggestions and innovations for improving business performance through GROW and through direct contact with the senior management team of the parent.
Equal opportunities
The Company is committed to equal opportunities for all, free from discrimination and harassment. The Company values the contribution of all employees. Where relevant, job applicants and employees, customers, visitors, or contractors receive equal treatment regardless of sex, race, disability, sexual orientation, religion or belief, age, colour, marital status, trade union membership, nationality or ethnic or national origins.
Within the Company, applicants and employees are recruited, selected, trained, and promoted on objective grounds, i.e. based on their ability, skills and aptitudes and on the requirements of their job, where applicable. This will enable them to develop to the best of their abilities and contribute most effectively to the success of the Company. If possible, and as required, we will assist disabled employees to enable them to work for the Company and maximize their contribution and performance.
OSRAM LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 3 -
Environmental
The Company’s commitment to being a socially responsible organization requires that it meets the demands of commerce in an ecologically and socially sound manner. ams-OSRAM designs, develops, manufactures, and markets its products and services to protect the environment and human health in a manner that either fully meets or exceeds any applicable regulations, and in order to improve energy efficiency and to minimize the impact on natural resources.
ams-OSRAM strives through its innovative products, systems, and solutions to improve the quality of life. This includes promoting high energy efficiency in its products and solutions for climate protection.
Business conduct
The Company adheres to the group Business Conduct Guidelines which contain the principles and rules for the conduct of all employees. They set out how the group meets its ethical and legal responsibility, and contain measures on anti-corruption, fair competition, and anti-trust.
Financial instruments
The Company’s financial risk management objectives and policies, including the policy for hedging each major type of forecasted transaction, and the exposure to market risk, interest rate risk, credit risk and liquidity risk, are defined.
Signed by order of the board of directors
Mr A Edger
Director
24 July 2024
OSRAM LIMITED
DIRECTOR'S REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
- 4 -
The director presents his annual report and financial statements for the year ended 31 December 2023.
Principal activities
Osram Limited is engaged in the sale of lighting productions and solutions in Great Britain.
Results and dividends
The results for the year are set out on pages 11 to 12.
No ordinary dividends were paid. The director does not recommend payment of a final dividend.
Director
The director who held office during the year and up to the date of signature of the financial statements was as follows:
Mr A Edger
Mr R Bushnell
(Resigned 1 July 2023)
Supplier payment policy
The Company's current policy concerning the payment of trade creditors is to follow the CBI's Prompt Payers Code (copies are available from the CBI, Centre Point, 103 New Oxford Street, London WC1A 1DU).
The Company's current policy concerning the payment of trade creditors is to:
settle the terms of payment with suppliers when agreeing the terms of each transaction;
ensure that suppliers are made aware of the terms of payment by inclusion of the relevant terms in contracts; and
pay in accordance with the Company's contractual and other legal obligations.
Trade creditors of the Company at the year end were equivalent to 38 days purchases, based on the average daily amount invoiced by suppliers during the year.
Political donations
No political donations were paid during the year (2022: £Nil).
Discontinued operations
As of 1st July 2023, OSRAM Ltd sold its Digital System (DS) business to a UK subsidiary of a lighting components Company based in China, with this DS business represented just over 60% of the OSRAM Ltd net sales in 2022. As a result, the Company’s Digital System business has been disclosed in the Financial Statements as a discontinued operation in 2023.
The above event does not alter the assessment of OSRAM Limited as a going concern.
Future developments
OSRAM Ltd continues to trade in the diverse UK entertainment and industrial lighting markets and expects its business to continue to develop profitably in this segment.
Auditor
Westcotts (SW) LLP were appointed as auditor to the company and in accordance with section 485 of the Companies Act 2006, a resolution proposing that they be re-appointed was put at an Extraordinary General Meeting.
Energy and carbon report
As the Company has consumed more than 40,000 kWh of energy in this reporting period, it does not qualify as a low energy user under these regulations and is therefore required to report on its emissions, energy consumption and energy efficiency activities.
OSRAM LIMITED
DIRECTOR'S REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 5 -
2023
2022
Energy consumption
kWh
kWh
Aggregate of energy consumption in the year
- Fuel consumed for transport
71,737
104,675
71,737
104,675
2023
2022
Emissions of CO2 equivalent
metric tonnes
metric tonnes
Scope 1 - direct emissions
- Gas combustion
-
-
- Fuel consumed for owned transport
15.88
22.96
15.88
22.96
Scope 2 - indirect emissions
- Electricity purchased
-
-
Scope 3 - other indirect emissions
- Fuel consumed for transport not owned by the Company
1.47
2.66
Total gross emissions
17.35
25.62
Intensity ratio
Tonnes CO2e per employee
1.24
1.11
Quantification and reporting methodology
We have followed the 2019 HM Government Environmental Reporting Guidelines. We have also used the GHG Reporting Protocol – Corporate Standard and have used the 2020 UK Government’s Conversion Factors for Company Reporting.
Intensity measurement
The chosen intensity measurement ratio is total gross emissions in metric tonnes CO2e per employee, the recommended ratio for the sector.
Measures taken to improve energy efficiency
Energy efficiency measures adopted include:
Reduced commuting by previously office-based employees, who now work from home following the closure of the offices
Increased use of electronic communication methods rather than physical travel
OSRAM LIMITED
DIRECTOR'S REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 6 -
Statement of director's responsibilities
The director is responsible for preparing the annual report and the financial statements in accordance with applicable law and regulations.
Company law requires the director to prepare financial statements for each financial year. Under that law the director has 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 director must not approve the financial statements unless he is 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 director is required to:
select suitable accounting policies and then apply them consistently;
make judgements and accounting estimates that are reasonable and prudent;
state whether applicable UK Accounting Standards have been followed, subject to any material departures disclosed and explained in the financial statements; and
prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Company will continue in business.
The director is 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. He is 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.
Statement of disclosure to auditor
So far as each person who was a director at the date of approving this report is aware, there is no relevant audit information of which the Company’s auditor is unaware. Additionally, the directors individually have taken all the necessary steps that they ought to have taken as directors in order to make themselves aware of all relevant audit information and to establish that the Company’s auditor is aware of that information.
Going concern
Based on the assessment of the Company’s financial position, future performance, liquidity, risks, and availability of support from its parent, the directors have a reasonable expectation that the Company has adequate resources to continue in operational existence for the foreseeable future. Thus, the Company continues to adopt the going concern basis of accounting.
Other matters
The Company’s statements on employee participation, environmental matters and equal opportunities are included in the Section 172(1) statement in the Strategic Report.
On behalf of the board
Mr A Edger
Director
24 July 2024
OSRAM LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF OSRAM LIMITED
- 7 -
Opinion
We have audited the financial statements of Osram Limited (the ‘Company’) for the year ended 31 December 2023 which comprise Statement of comprehensive income, Statement of financial position, Statement of changes in equity and notes to the financial statements, including a summary of significant accounting policies.
The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including FRS 101 “Reduced Disclosure Framework (United Kingdom Generally Accepted Accounting Practice).
In our opinion, the financial statements:
give a true and fair view of the state of the ompany’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.
Without qualifying our opinion, we draw attention to the accounting policies on page 15 of the financial statements and the fact that the opening balances of the comparative year were not audited as the Company was entitled to exemption from audit.
Conclusions relating to going concern
In auditing the financial statements, we have concluded that the director's 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. 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 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.
OSRAM LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF OSRAM LIMITED
- 8 -
Opinions on other matters prescribed by the Companies Act 2006
In our opinion, based on the work undertaken in the course of the audit:
the information given in the strategic report and the 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.
Matters on which we are required to report by exception
In 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 directors’ remuneration specific by law are not made; or
we have not received all the information and explanations we require for our audit.
Responsibilities of director
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.
OSRAM LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF OSRAM LIMITED
- 9 -
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 the financial statements.
The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below.
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud.
Based on our understanding of the Company and its industry, we considered that non-compliance with the following laws and regulations might have a material effect on the financial statements: tax legislation.
To help us identify instances of non-compliance with these laws and regulations, and in identifying and assessing the risks of material misstatement in respect to non-compliance, our procedures included, but were not limited to:
Inquiring of management and, where appropriate, those charged with governance, as to whether the ompany is in compliance with laws and regulations, and discussing their policies and procedures regarding compliance with laws and regulations;
Inspecting correspondence, if any, with relevant licensing or regulatory authorities;
Communicating identified laws and regulations to the engagement team and remaining alert to any indications of non-compliance throughout our audit; and
Considering the risk of acts by the ompany which were contrary to applicable laws and regulations, including fraud.
We also considered those laws and regulations that have a direct effect on the preparation of the financial statements, such as tax legislation and the Companies Act 2006.
In addition, we evaluated the directors’ and management’s incentives and opportunities for fraudulent manipulation of the financial statements, including the risk of management override of controls, and determined that the principal risks related to posting manual journal entries to manipulate financial performance, management bias through judgements and assumptions in significant accounting estimates and revenue recognition (which we pinpointed to cut-off) and significant one-off or unusual transactions.
Our audit procedures in relation to fraud included but were not limited to:
Making enquiries of the directors and management on whether they had knowledge of any actual, suspected or alleged fraud;
Gaining an understanding of the internal controls established to mitigate risks related to fraud;
Discussing amongst the engagement team the risks of fraud; and
Addressing the risks of fraud through management override of controls by performing journal entry testing.
There are inherent limitations in the audit procedures described above and the primary responsibility for the prevention and detection of irregularities including fraud rests with management. As with any audit, there remained a risk of non-detection of irregularities, as these may involve collusion, forgery, intentional omissions, misrepresentations or the override of internal controls.
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 auditor’s report.
OSRAM LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF OSRAM LIMITED
- 10 -
This report is made solely to the Company’s members as a body in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the Company’s members those matters we are required to state to them in an auditor’s report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the Company and the Company’s members as a body for our audit work, for this report, or for the opinions we have formed.
...........................................
Valerie Doyle
(Senior Statutory Auditor)
For and on behalf of Westcotts (SW) LLP
24 July 2024
Chartered Accountants and Statutory Auditor
Plym House
3 Longbridge Road
Plymouth
PL6 8LT
OSRAM LIMITED
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2023
- 11 -
Continuing
Discontinued
31 December
operations
operations
2023
Notes
£
£
£
Revenue
3
5,772,948
5,081,767
10,854,715
Cost of sales
(4,593,442)
(4,113,494)
(8,706,936)
Gross profit
1,179,506
968,273
2,147,779
Administrative expenses
(694,455)
(678,561)
(1,373,016)
Other operating income
11,213
-
11,213
Exceptional item
4
10,450,000
-
10,450,000
Operating profit/(loss)
5
10,946,264
289,712
11,235,976
Interest receivable and similar income
8
38,121
38,121
Interest payable and similar charges
9
(1,105,708)
(1,105,708)
Other gains and losses
(11,213)
11,213
-
- Gain on disposal of discontinued operation
-
(270,722)
(270,722)
Profit before taxation
9,867,464
30,203
9,897,667
Tax on profit
11
98,321
5,739
104,060
Profit/(loss) and total comprehensive income for the financial year
9,965,785
35,942
10,001,727
OSRAM LIMITED
STATEMENT OF COMPREHENSIVE INCOME (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 12 -
Continuing
Discontinued
31 December
operations
operations
2022
Notes
£
£
£
Revenue
3
6,578,526
10,189,937
16,768,463
Cost of sales
(5,058,906)
(7,936,527)
(12,995,433)
Gross profit
1,519,620
2,253,410
3,773,030
Administrative expenses
(1,338,982)
(1,042,777)
(2,381,759)
Exceptional item
4
(27,750,445)
-
(27,750,445)
Operating profit/(loss)
5
(27,569,807)
1,210,633
(26,359,174)
Interest receivable and similar income
8
10,264
10,264
Interest payable and similar charges
9
(533,015)
-
(533,015)
Loss before taxation
(28,092,558)
1,210,633
(26,881,925)
Tax on loss
11
55,992
(233,051)
(177,059)
Profit/(loss) and total comprehensive income for the financial year
(28,036,566)
977,582
(27,058,984)
OSRAM LIMITED
STATEMENT OF FINANCIAL POSITION
AS AT
31 DECEMBER 2023
31 December 2023
- 13 -
2023
2022
Notes
£
£
£
£
Non-current assets
Property, plant and equipment
12
4,725
7,228
Investments
13
25,455,000
15,005,000
Deferred tax asset
21
109,234
2,994
25,568,959
15,015,222
Current assets
Inventories
15
763
577,179
Contract assets
16
5,100
Trade and other receivables
17
1,486,096
4,756,251
Cash and cash equivalents
768,808
302,582
2,255,667
5,641,112
Current liabilities
18
(16,421,966)
(18,879,796)
Net current liabilities
(14,166,299)
(13,238,684)
Total assets less current liabilities
11,402,660
1,776,538
Provisions for liabilities
Other provisions
22
(123,081)
(498,686)
Net assets
11,279,579
1,277,852
Equity
Called up share capital
24
1
1
Additional paid-in capital
25
24,593,300
24,593,300
Retained earnings
(13,313,722)
(23,315,449)
Total equity
11,279,579
1,277,852
The financial statements were approved by the board of directors and authorised for issue on 24 July 2024 and are signed on its behalf by:
Mr A Edger
Director
Company registration number 09860012 (England and Wales)
OSRAM LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2023
- 14 -
Share capital
Capital contribution reserve
Additional paid-in capital
Retained earnings
Total
£
£
£
£
£
Balance at 1 January 2022
1
24,593,300
3,743,535
28,336,836
Year ended 31 December 2022:
Loss and total comprehensive income for the year
-
-
-
(27,058,984)
(27,058,984)
Unaudited balance at 31 December 2022
1
24,593,300
(23,315,449)
1,277,852
Year ended 31 December 2023:
Profit and total comprehensive income for the year
-
-
-
10,001,727
10,001,727
Balance at 31 December 2023
1
24,593,300
(13,313,722)
11,279,579
OSRAM LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
- 15 -
1
Accounting policies
Company information
Osram Limited is a private Company limited by shares incorporated in England and Wales. The registered office is 450 Brook Drive, Green Park, Reading, RG2 6UU. The Company's principal activities and nature of its operations are disclosed in the director's report.
1.1
Accounting convention
The financial statements have been prepared in accordance with Financial Reporting Standard 101 Reduced Disclosure Framework (FRS 101) and in accordance with applicable accounting standards.
The opening balances of the comparative year were not subject to audit as the Company was entitled to exemption from audit under section 479A of the Companies Act 2006.
The financial statements are prepared in sterling, which is the functional currency of the Company. Monetary amounts in these financial statements are rounded to the nearest £.
The financial statements have been prepared under the historical cost convention. The principal accounting policies adopted are set out below.
As permitted by FRS 101, the Company has taken advantage of the following disclosure exemptions from the requirements of IFRS:
inclusion of an explicit and unreserved statement of compliance with IFRS;
presentation of a statement of cash flows and related notes;
disclosure of the objectives, policies and processes for managing capital;
disclosure of key management personnel compensation;
disclosure of the categories of financial instrument and the nature and extent of risks arising on these financial instruments;
the effect of financial instruments on the statement of comprehensive income;
comparative period reconciliations for the number of shares outstanding and the carrying amounts of property, plant and equipment, intangible assets, investment property and biological assets;
disclosure of the future impact of new International Financial Reporting Standards in issue but not yet effective at the reporting date;
comparative narrative information;
for financial instruments, investment property and biological assets measured at fair value and within the scope of IFRS 13, the valuation techniques and inputs used to measure fair value, the effect of fair value measurements with significant unobservable inputs on the result for the period and the impact of credit risk on the fair value; and
related party disclosures for transactions with the parent or wholly owned members of the group.
Where required, equivalent disclosures are given in the group accounts of ams-OSRAM AG. The group accounts of ams-OSRAM AG are available to the public and can be obtained as set out in note 28.
The Company has taken advantage of the exemption under section 401 of the Companies Act 2006 not to prepare consolidated accounts. The financial statements present information about the Company as an individual entity and not about its group.
1.2
Going concern
The director has at the time of approving the financial statements, a reasonable expectation that the trueCompany has adequate resources to continue in operational existence for the foreseeable future. Thus the director continues to adopt the going concern basis of accounting in preparing the financial statements.
OSRAM LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 16 -
1.3
Revenue
The recognition of revenue requires a binding contract to be in place and for performance obligations therein to be analysed with regard to the passing of control over goods and services.
The Company generates most of its revenue through the sale of products; and a relatively small amount by way of commission on product sale transactions for which the Company acts as an agent for affiliated companies, and for management and other services supplied to affiliated companies.
For standard product sales, the revenue is recognised at the point control passes to the customer. This is generally on delivery.
One exception to this is in the case of consignment stock arrangements which the Company has with certain customers whereupon inventory is stored at customer premises. Control will pass to the customer when the customer takes the stock from the consignment storage area at its premises.
The other exception is in the case of customer-specific products i.e. products that the Company can sell to only one customer because of their specifications and therefore have no other use to the Company. The revenue from these products is recognised when production has finished.
Rebates, bonuses and other variable price reductions that the Company grants to the customer are recognised as a reduction of revenue. If they do not reduce the invoice amount directly, they are recognised as refund liabilities until they are subsequently paid to the customer. Estimates of revenue reductions are primarily based on past experience, the contractual provisions and expectations regarding future revenue.
Revenue deriving from commission is recognised over the period in which the Company meets its obligation of generating revenues for the party for which it acts as agent. Revenue deriving from management and other services is recognised over the period in which the Company performs those services.
1.4
Property, plant and equipment
Property, plant and equipment are initially measured at cost and subsequently measured at cost or valuation, net of depreciation and any impairment losses.
Depreciation is recognised so as to write off the cost or valuation of assets less their residual values over their useful lives on the following bases:
Fixtures, fittings, tools and equipment
3 to 5 years on a straight line basis
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 recognised in the income statement.
1.5
Non-current investments
With effect from 31.12.2023, OSRAM Ltd has reclassified its non-current investments out of the cost less impairment measurement category and into the fair value through profit and loss measurement category to reflect its current business model for managing financial assets. This reclassified fair value is applied from the reclassification date, and previously recognized impairment losses are not restated.
With this change interests in subsidiaries, associates and jointly controlled entities are measured at fair value with the fair value movements recognized in profit or loss using the fair accounting rules. In order to establish fair value discounted cash flow analysis has been applied, incorporating all factors that market participants would consider in setting a price and consistent with accepted economic methodologies for pricing financial instruments.
OSRAM LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 17 -
A subsidiary is an entity controlled by the Company. Control is the power to govern the financial and operating policies of the entity so as to obtain benefits from its activities.
1.6
Impairment of tangible and intangible assets
At each reporting 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). Where it is not possible to estimate the recoverable amount of an individual asset, the Company estimates the recoverable amount of the cash-generating unit to which the asset belongs.
Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.
If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (or cash-generating unit) 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.
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
Inventories
Inventories 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 inventories to their present location and condition.
Inventories held for distribution at no or nominal consideration are measured at the lower of cost and replacement cost, adjusted where applicable for any loss of service potential.
Net realisable value is the estimated selling price less all estimated costs of completion and costs to be incurred in marketing, selling and distribution.
1.8
Cash and cash equivalents
Cash and cash equivalents include cash in hand, deposits held at call with banks, other short-term liquid investments with original maturities of three months or less, and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities.
1.9
Financial assets
Financial assets are recognised in the Company's statement of financial position when the Company becomes party to the contractual provisions of the instrument. Financial assets are classified into specified categories, depending on the nature and purpose of the financial assets.
At initial recognition, financial assets classified as fair value through profit and loss are measured at fair value and any transaction costs are recognised in profit or loss. Financial assets not classified as fair value through profit and loss are initially measured at fair value plus transaction costs.
OSRAM LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 18 -
Financial assets at fair value through profit or loss
When any of the above-mentioned conditions for classification of financial assets is not met, a financial asset is classified as measured at fair value through profit or loss. Financial assets measured at fair value through profit or loss are recognized initially at fair value and any transaction costs are recognised in profit or loss when incurred. A gain or loss on a financial asset measured at fair value through profit or loss is recognised in profit or loss, and is included within finance income or finance costs in the statement of income for the reporting period in which it arises.
Financial assets held at amortised cost
Financial instruments are classified as financial assets measured at amortised cost where the objective is to hold these assets in order to collect contractual cash flows, and the contractual cash flows are solely payments of principal and interest. They arise principally from the provision of goods and services to customers (eg trade receivables). They are initially recognised at fair value plus transaction costs directly attributable to their acquisition or issue, and are subsequently carried at amortised cost using the effective interest rate method, less provision for impairment where necessary.
Financial assets at fair value through other comprehensive income
Debt instruments are classified as financial assets measured at fair value through other comprehensive income where the financial assets are held within the Company’s business model whose objective is achieved by both collecting contractual cash flows and selling financial assets, and the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.
A debt instrument measured at fair value through other comprehensive income is recognised initially at fair value plus transaction costs directly attributable to the asset. After initial recognition, each asset is measured at fair value, with changes in fair value included in other comprehensive income. Accumulated gains or losses recognised through other comprehensive income are directly transferred to profit or loss when the debt instrument is derecognised.
Financial instruments are recognised in the statement of financial position when the Company becomes a party to the contractual obligations of the instrument. Based on their nature, financial instruments are initially recognised at their fair value, cost or transaction price. Transaction costs directly attributable to the acquisition or issue of financial instruments are only recognised in determining the carrying amount, if the financial instruments are not measured at fair value through profit or loss. Subsequently, financial assets and liabilities are measured according to the category to which they are assigned.
Equity instruments are recognised initially at fair value plus transaction cost directly attributable to the asset. The company recognises changes in fair value in equity instruments through profit and loss. Dividends are recognised as finance income in profit or loss.
Impairment of financial assets
Financial assets carried at amortised cost and FVOCI are assessed for indicators of impairment at each reporting end date.
The expected credit losses associated with these assets are estimated on a forward-looking basis. A broad range of information is considered when assessing credit risk and measuring expected credit losses, including past events, current conditions, and reasonable and supportable forecasts that affect the expected collectability of the future cash flows of the instrument.
Derecognition of financial assets
Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire, or when it transfers the financial asset and substantially all the risks and rewards of ownership to another entity.
OSRAM LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 19 -
1.10
Financial liabilities
The Company recognises financial debt when the Company becomes a party to the contractual provisions of the instruments. Financial liabilities are classified as either 'financial liabilities at fair value through profit or loss' or 'other financial liabilities'.
Other financial liabilities
Other financial liabilities, including borrowings, trade payables and other short-term monetary liabilities, are initially measured at fair value net of transaction costs directly attributable to the issuance of the financial liability. They are subsequently measured at amortised cost using the effective interest method. For the purposes of each financial liability, interest expense includes initial transaction costs and any premium payable on redemption, as well as any interest or coupon payable while the liability is outstanding.
Derecognition of financial liabilities
Financial liabilities are derecognised when, and only when, the Company’s obligations are discharged, cancelled, or they expire.
Foreign exchange forward contracts - The Company uses forward contracts to mitigate the effects of changes in foreign currency exchange rates relating to certain of the Company’s intercompany payables. These derivative instruments are not formally designated as hedges and the terms of these instruments generally do not exceed six months. The fair values of these instruments are included in the Statement of Financial Position in current financial assets or current financial liabilities, with changes in the fair value recognised in the Statement of Income in line item Cost of goods sold and services rendered. The Company has classified these derivative instruments as fair value through profit and loss.
1.11
Equity instruments
Equity instruments issued by the Company are recorded at the proceeds received, net of direct issue costs. Dividends payable on equity instruments are recognised as liabilities once they are no longer at the discretion of the Company.
1.12
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 income statement 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.
OSRAM LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 20 -
Deferred tax
Deferred tax is the tax expected to be payable or recoverable on differences between the carrying amounts of assets and liabilities in the financial statements and the corresponding tax bases used in the computation of taxable profit, and is accounted for using the balance sheet liability method. Deferred tax liabilities are generally recognised for all taxable temporary differences and deferred tax assets are recognised to the extent that it is probable that taxable profits will be available against which deductible temporary differences can be utilised. Such assets and liabilities are not recognised if the temporary 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 income statement, 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.
1.13
Provisions
Provisions are recognised when the Company has a legal or constructive present obligation as a result of a past event and it is probable that the Company will be required to settle that obligation, and a reliable estimate can be made of the amount of the obligation.
The amount recognised as a provision is the best estimate of the consideration required to settle the present obligation at the reporting end date, taking into account the risks and uncertainties surrounding the obligation. Where a provision is measured using the cash flows estimated to settle the present obligation, its carrying amount is the present value of those cash flows.
When some or all of the economic benefits required to settle a provision are expected to be recovered from a third party, a receivable is recognised as an asset if it is virtually certain that reimbursement will be received and the amount of the receivable can be measured reliably.
1.14
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 inventories or non-current 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.
1.15
Retirement benefits
Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.
1.16
Leases
At inception, the Company assesses whether a contract is, or contains, a lease within the scope of IFRS 16. A contract is, or contains, a lease if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration. Where a tangible asset is acquired through a lease, the Company recognises a right-of-use asset and a lease liability at the lease commencement date. Right-of-use assets are included within property, plant and equipment, apart from those that meet the definition of investment property.
OSRAM LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 21 -
The right-of-use asset is initially measured at cost, which comprises the initial amount of the lease liability adjusted for any lease payments made at or before the commencement date plus any initial direct costs and an estimate of the cost of obligations to dismantle, remove, refurbish or restore the underlying asset and the site on which it is located, less any lease incentives received.
The right-of-use asset is subsequently depreciated using the straight-line method from the commencement date to the earlier of the end of the useful life of the right-of-use asset or the end of the lease term. The estimated useful lives of right-of-use assets are determined on the same basis as those of other property, plant and equipment. The right-of-use asset is periodically reduced by impairment losses, if any, and adjusted for certain remeasurements of the lease liability.
The lease liability is initially measured at the present value of the lease payments that are unpaid at the commencement date, discounted using the interest rate implicit in the lease or, if that rate cannot be readily determined, the Company's incremental borrowing rate. Lease payments included in the measurement of the lease liability comprise fixed payments, variable lease payments that depend on an index or a rate, amounts expected to be payable under a residual value guarantee, and the cost of any options that the Company is reasonably certain to exercise, such as the exercise price under a purchase option, lease payments in an optional renewal period, or penalties for early termination of a lease.
The lease liability is measured at amortised cost using the effective interest method. It is remeasured when there is a change in: future lease payments arising from a change in an index or rate; the Company's estimate of the amount expected to be payable under a residual value guarantee; or the Company's assessment of whether it will exercise a purchase, extension or termination option. When the lease liability is remeasured in this way, a corresponding adjustment is made to the carrying amount of the right-of-use asset, or is recorded in profit or loss if the carrying amount of the right-of-use asset has been reduced to zero.
The Company has elected not to recognise right-of-use assets and lease liabilities for short-term leases of machinery that have a lease term of 12 months or less, or for leases of low-value assets including IT equipment. The payments associated with these leases are recognised in profit or loss on a straight-line basis over the lease term.
2
Critical accounting estimates and judgements
In the application of the Company’s accounting policies, the director is 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 judgements
Receivables
The allowance for receivables involves significant management judgment and review of individual receivables based on individual customer creditworthiness. The movement in this allowance is given in note 17.
Impairment of investments in subsidiary undertakings
Management judgement is required in considering whether there is indication of impairment since acquisition.
OSRAM LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
2
Critical accounting estimates and judgements
(Continued)
- 22 -
Key sources of estimation uncertainty
Provisions
Significant estimates are involved in the determination of provisions for costs associated with faulty or damaged products. Such estimates are subject to change based on new information as issues arise. The provision has been calculated as £19k (2022: £49k see note 22). If this has been underestimated by 50%, say, then the impact on future periods’ results would be a charge of £19k (2022: £49k). For further explanation of the movement in provisions in the year see note 22.
3
Revenue
2023
2022
£
£
Revenue analysed by class of business
Sale of lighting products and solutions
10,356,625
16,442,455
Commission
498,090
326,008
10,854,715
16,768,463
Segmental information for the ams-OSRAM Group is presented in the consolidated accounts of the parent Company of the ams-OSRAM Group, ams-OSRAM AG.
4
Exceptional items
2023
2022
£
£
Income
Impairment reversal relating to investment in subsidiary
10,450,000
-
Expenditure
Impairment loss relating to investment in subsidiary
-
27,750,445
Net exceptional income/(expenditure)
10,450,000
(27,750,445)
As outlined in the Company’s accounting policy for the measurement of non-current investments in point 1.5 of the Notes to the Financial Statements, and with effect from 31 December.2023 OSRAM Ltd has reclassified its non-current investments out of the cost less impairment measurement category and into the fair value through the profit and loss measurement category.
OSRAM Ltd currently owns 100% of the share capital of RING Automotive Ltd, this represents its sole noncurrent investment as at 31.12.2023. OSRAM Ltd estimated its fair value using discounted cash value techniques, discounted at an appropriate discount rate, reflecting the UK market in which RING Automotive Ltd operates. Based on this method RING Automotive Ltd was valued at £25,455k as at 31.12.2023, with the gain of £10,450k recognized in the Income Statement.
OSRAM LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 23 -
5
Operating profit/(loss)
2023
2022
Operating profit/(loss) for the year is stated after charging/(crediting):
£
£
Exchange losses
117,753
140,516
Fees payable to the Company's auditor for the audit of the Company's financial statements
39,510
23,400
Depreciation of property, plant and equipment
4,382
4,789
Depreciation of right-of-use-assets
-
6,647
Staff costs
1,621,727
2,230,322
6
Employees
The average monthly number of persons (including directors) employed by the Company during the year was:
2023
2022
Number
Number
Sales and marketing
12
19
Administration and general services
2
4
Total
14
23
Their aggregate remuneration comprised:
2023
2022
£
£
Wages and salaries
1,334,223
1,916,550
Social security costs
165,579
168,739
Pension costs
117,599
145,033
1,617,401
2,239,322
7
Director's remuneration
2023
2022
£
£
Remuneration for qualifying services
227,154
350,071
Company pension contributions to defined contribution schemes
21,367
37,801
248,521
387,872
The number of directors for whom retirement benefits are accruing under defined contribution schemes amounted to 1 (2022 - 2). One director paid by the Company was a member of a defined benefit scheme, not accruing further service benefits. This defined benefit scheme is associated with a group of companies to which OSRAM Limited formerly belonged, with OSRAM Limited having no further connection with this scheme, and no associated risks.
OSRAM LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
7
Director's remuneration
(Continued)
- 24 -
Remuneration disclosed above include the following amounts paid to the highest paid director:
2023
2022
£
£
Remuneration for qualifying services
182,000
218,928
8
Investment income
2023
2022
£
£
Interest income
Other interest income
38,121
10,264
9
Finance costs
2023
2022
£
£
Interest on financial liabilities measured at amortised cost:
Interest on loans payable to group
1,105,665
532,714
Interest on other loans
-
301
Total finance costs
1,105,665
533,015
10
Discontinued operations
The results of the discontinued business, which have been included in the income statement, were as follows:
2023
2022
Digital systems
Digital systems
£
£
Revenue
5,081,767
10,189,937
Operating expenses
(4,792,055)
(8,979,304)
Other gains and losses
11,213
-
(Loss)/profit before taxation
300,925
1,210,633
Income tax expense
5,739
(233,051)
Loss on sale of discontinued operations
(270,722)
Net (loss)/profit attributable to discontinuation
35,942
977,582
11
Taxation
2023
2022
£
£
Current tax
UK corporation tax on profits for the current period
(6,000)
171,559
OSRAM LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
11
Taxation
2023
2022
£
£
(Continued)
- 25 -
Deferred tax
Origination and reversal of temporary differences
(98,060)
5,500
Total tax charge/(credit)
(104,060)
177,059
Of the charge to current tax in relation to discontinued operations, £0 relates to tax on profits on ordinary activities and £0 arose on disposal.
The charge for the year can be reconciled to the profit/(loss) per the income statement as follows:
2023
2022
£
£
Profit/(loss) before taxation but after excluding loss on disposal of discontinued operation (2023: £270,722 and 2022: £Nil)
10,168,389
(26,881,925)
Expected tax charge/(credit) based on a corporation tax rate of 25.00% (2022: 19.00%)
2,542,097
(5,107,566)
Effect of expenses not deductible in determining taxable profit
6,451
14,637
Other adjusting items
(40,108)
(2,597)
Impairment loss relating to investment in subsidiary not allowable
-
5,272,585
Impairment reversal relating to investment in subsidiary not allowable
(2,612,500)
-
Taxation (credit)/charge for the year
(104,060)
177,059
12
Property, plant and equipment
Assets under construction
Car fleet
Fixtures, fittings, tools and equipment
Total
£
£
£
£
Cost
At 1 January 2023
66,205
66,205
Additions
556
11,285
11,841
Disposals
(33,012)
(33,012)
At 31 December 2023
556
44,478
45,034
Accumulated depreciation and impairment
At 1 January 2023
-
58,977
58,977
Charge for the year
4,382
4,382
Eliminated on disposal
(23,050)
(23,050)
At 31 December 2023
40,309
40,309
OSRAM LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
12
Property, plant and equipment
Assets under construction
Car fleet
Fixtures, fittings, tools and equipment
Total
£
£
£
£
(Continued)
- 26 -
Carrying amount analysed between owned assets and right-of-use assets
At 31 December 2023
Owned assets
556
-
4,169
4,725
Right-of-use assets
-
-
-
-
556
4,169
4,725
At 31 December 2022
Owned assets
-
-
7,228
7,228
Right-of-use assets
-
-
-
-
-
7,228
7,228
Property, plant and equipment includes right-of-use assets, as follows:
Right-of-use assets
2023
2022
£
£
Net values at the year end
Total additions in the year
-
4,334
13
Investments
Current
Non-current
2023
2022
2023
2022
£
£
£
£
Investments in subsidiaries
-
-
25,455,000
15,005,000
OSRAM LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
13
Investments
(Continued)
- 27 -
Movements in non-current investments
Shares in subsidiaries
£
Cost or valuation
At 1 January 2023
15,005,000
Adjustment at 31 December 2023
Fair value gain
10,450,000
At 31 December 2023
10,450,000
Carrying amount
At 31 December 2023
25,455,000
At 31 December 2022
15,005,000
With effect from 31.12.2023, OSRAM Ltd has reclassified its non-current investments out of the cost less impairment measurement category and into the fair value through profit and loss measurement category to reflect its current business model for managing financial assets. This reclassified fair value is applied from the reclassification date, and previously recognized impairment losses are not restated.
14
Subsidiaries
Details of the Company's subsidiaries at 31 December 2023 are as follows:
Name of undertaking
Registered office
Class of
% Held
shares held
Direct
Ring Automotive Limited
Volvox House, Gelderd Road, Leeds, LS12 6NA, United Kingdom
Ordinary shares
100.00
15
Inventories
2023
2022
£
£
Finished goods
763
577,179
16
Contracts with customers
2023
2022
Period end
Period end
£
£
Contracts in progress
Contract assets
-
5,100
Contract liabilities
(119,381)
(241,517)
OSRAM LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
16
Contracts with customers
(Continued)
- 28 -
Contract assets mainly arise as a result of the recognition of un-invoiced revenue whereby customers holding consignment stock have called off goods but have yet to be invoiced for them.
Contract liabilities mainly arise as a result of product deliveries where, because of the contractual arrangements (particularly delivery terms), control does not pass to the customer until the time of delivery. Revenue is recognised when control passes to the customer.
17
Trade and other receivables
Current
Non-current
2023
2022
2023
2022
£
£
£
£
Trade receivables
1,544,945
4,768,905
-
-
Provision for bad and doubtful debts
(137,915)
(212,154)
Corporation tax recoverable
34,627
20,593
-
-
Current derivatives - Foreign currency contracts
107,014
Prepayments and accrued income
44,439
71,893
-
-
1,486,096
4,756,251
-
-
Deferred tax asset
-
-
109,234
2,994
1,486,096
4,756,251
109,234
2,994
18
Liabilities
2023
2022
Notes
£
£
Trade and other payables
19
16,282,257
18,163,452
Contract liabilities
16
119,381
241,517
Taxation and social security
20,328
474,711
Lease liabilities
20
-
116
16,421,966
18,879,796
19
Trade and other payables
2023
2022
£
£
Trade payables
113,923
98,975
Amounts owed to fellow group undertakings
16,072,845
17,690,359
Accruals and deferred income
15,411
24,599
Refund liabilities
11,092
252,401
Other payables
68,986
97,118
16,282,257
18,163,452
OSRAM LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
19
Trade and other payables
(Continued)
- 29 -
The Group undertaking balance relates to unsecured loans from OSRAM GmbH, the direct parent company of OSRAM Limited. OSRAM Limited has received assurances from its direct parent company of continued financial support.
20
Lease liabilities
2023
2022
Maturity analysis
£
£
Within one year
-
116
Lease liabilities are classified based on the amounts that are expected to be settled within the next 12 months and after more than 12 months from the reporting date, as follows:
2023
2022
£
£
Current liabilities
-
116
Non-current liabilities
-
-
Other leasing information is included in note 26.
21
Deferred taxation
The following are the major deferred tax liabilities and assets recognised by the Company and movements thereon during the current and prior reporting period.
Deferred tax asset at 1 January 2022
15,914
2023
2022
2023
2022
Offsets applied
£
£
£
£
Deferred tax assets
Deferred tax liabilities
Balances before offset
109,234
10,994
-
(8,000)
Amounts offset
-
(8,000)
-
8,000
Balances after offset
109,234
2,994
OSRAM LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 30 -
22
Provisions for liabilities
2023
2022
£
£
Faulty and damaged products
19,069
48,833
Other
104,012
449,853
123,081
498,686
Provisions are classified based on the amounts that are expected to be settled within the next 12 months and after more than 12 months from the reporting date, as follows:
2023
2022
£
£
Current liabilities
117,360
484,036
Non-current liabilities
5,721
14,650
Movements on provisions:
Faulty and damaged products
Other
Total
£
£
£
At 1 January 2023
48,833
449,853
498,686
Additional provisions in the year
-
104,012
104,012
Utilisation of provision
(29,764)
(449,853)
(479,617)
Balance at the end of the period
19,069
104,012
123,081
At 31 December 2023
19,069
104,012
123,081
The provision relates to the rectification of faults or damages in the products the Company sells. See note 1.13 for further information concerning the Company’s policy for estimating the provision for these issues.
23
Retirement benefit schemes
2023
2022
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
117,599
145,033
The Company participates in a defined contribution pension plan. The pension cost charge for the year represents contributions payable by the Company to the scheme and amounted to £118k (2022: £145k). Liabilities and accruals for pension contributions in the statement of financial position are £10k (2022: £21k).
24
Share capital
2023
2022
2023
2022
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary share of £1 each
1
1
1
1
OSRAM LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 31 -
25
Additional paid-in capital
2023
2022
£
£
At the beginning and end of the year
24,593,300
24,593,300
The additional paid-in capital of £24,593k consists of £1,593k capital contribution from the Company’s parent OSRAM GmbH on commencement of trade, and a further contribution of £23,000k from OSRAM GmbH in 2019 as part of the funding of the acquisition of Ring Automotive Limited and associated non-trading entities.
26
Other leasing information
Lessee
Amounts recognised in profit or loss as an expense during the period in respect of lease arrangements are as follows:
2023
2022
£
£
Selling, marketing and general administrative expenses
3,920
7,000
Information relating to lease liabilities is included in note 20.
27
Directors' transactions
No such transactions with the directors (or other key management personnel) occurred in 2023 or 2022 which require disclosure under the requirements of s413 of the Companies Act 2006 and FRS101, other than emoluments as described in note 7.
28
Ultimate parent undertaking
The ultimate parent undertaking is ams-OSRAM AG. Copies of the ams-OSRAM group accounts are available on the internet at:
https://ams-osram.com/about-us/investor-relations/financial-results-and-reports
Or they can be obtained from:
ams-OSRAM AG
Tobelbader Strasse 30
8141 Premstaetten
Austria
The immediate parent undertaking is OSRAM GmbH, a Company incorporated in Germany.
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